What is Balance Billing?
Codes of ethics and even regulations and laws govern medical billing. This is to ensure uniformity across the healthcare industry and to keep everyone, providers and patients alike, operating under the same moral guidelines. However, there are some exceptions to this uniformity.
Balance Billing occurs when a doctor or healthcare provider bills their client more than the amount that would be reimbursed by Medicare for the services that they provided to the client. Normally, Medicare beneficiaries would pay their deductible and coinsurance, and Medicare would pay the healthcare provider the agreed upon assigned cost of the procedure, test, exam, or service. With balance billing, the doctors or other providers try to recoup the portion of the bill that was written off by Medicare coverage. They charge the beneficiary a bill for more than the normal deductible and coinsurance out-of-pocket costs.
Luckily, balance billing is often prohibited. If the healthcare provider is a participating member with Original Medicare, they cannot balance bill any of their patients for any reason. At last count, over 93% of non-pediatric primary care providers are participating providers with Medicare, so balance billing is likely very rare. If a doctor or provider is in-network with a Medicare Advantage insurance plan, balance billing is also not allowed. Balance billing is excluded under their contract with the insurance carrier.
Non-participating Providers
Balance billing can occur when a physician or facility is not a participating provider but also hasn’t opted out of Medicare. These are called non-participating providers, and they can balance bill their clients. However, they cannot charge more than the original Medicare amount for the service plus 15%. Medicare will pay these non-participating doctors 95% of the Original Medicare assigned amount. The doctor can then charge up to 15% more to their patient. For doctors who have opted out of Medicare altogether, there is no such limitation. This is rather rare among primary care physicians, but can be common among specialties. Only 1% of doctors have opted out of Medicare, but over 37% of psychiatrists have opted out of Medicare.
For members, it is vital to be aware of their doctor’s opt-in or opt-out status. Knowing avoids surprise balance billing and limit their unexpected costs.
Licensed Medicare agents – What is Balance Billing?
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