Have you ever made a trip to the emergency room, thought you were covered by insurance, and later received a bill that seemed way too high? Chances are you just got hit with “surprise billing,” otherwise known as balance billing. You’re not alone. Approximately one in five people who visit an ER within their healthcare network are treated by an out-of-network doctor, and end up being billed for out-of-network services. And, while the average out-of-network bill runs over $600, some patients have been billed as much as $19,000 for their care.
These surprise bills can, well, take you by surprise. Here’s a primer on what balance billing is, exactly, and why healthcare providers do it. We’ll also explain how it works, and your options in the event you’re hit with a huge balance bill.
Why does balance billing happen?
Balance billing happens when you’ve paid your deductible or copay, and your insurance company has also paid their obligation toward your medical bill. If, after that, there’s still a balance owed on the bill and the doctor or hospital expects you to pay that balance, you’re being balance billed. This most often occurs when you receive out-of-network services.
Let’s use the emergency room example again. Even if your local hospital is in your insurance network, it’s entirely possible that some of the doctors or specialists who work in the hospital are not in your network. And when you signed all that paperwork when you checked in to the hospital, that paperwork said that you accept treatment from anyone, in-network and out-of-network. If one of the doctors or specialists who treats you is out-of-network, you’re likely to receive a surprise bill.
For the record, the opposite can prove true, too – if your doctor has privileges at the hospital, but the hospital is considered an out-of-network facility, you can end up in the same boat.
An example of balance billing
Here’s a simplified example of balance billing. Your health insurance covers 100% of allowed charges for in-network care, and 50% of allowed charges for out-of-network care. You have an MRI performed at an out-of-network facility, and are billed $2,000. Your health insurance allows only $400 for this procedure.
Because you went out of network for the MRI, your insurance will only pay 50% of the $400 allowed charge—leaving you responsible for $200. However, the MRI provider still expects to be paid that full $2,000. The insurance company pays $400, but since you’re out-of-network, you’re responsible for $200. $2,000 minus $200 = $1,800, which is the balance you owe for your MRI.
How the insurance company makes more money from out-of-network care
Here’s the issue with in-network and out-of-network care. Healthcare providers contract directly with insurance companies to provide discounted prices in exchange for patient volume and faster payments. These contracts mean that the healthcare providers can’t bill patients beyond what’s in the contract for that given health insurance plan—within network. However, if a patient goes out of network, all bets are off. Those healthcare providers don’t have to abide by the contract because they’ve chosen not to be in-network providers. They’re free to collect the full amount billed. Your health insurance may only allow a certain amount of charges for an ER visit or procedure, and only pay a certain amount. Any remaining balance beyond that is the patient’s responsibility—balance billing.
Even if you try to stay in-network, out-of-network charges can happen unexpectedly. You might be subject to balance billing because of services rendered by specialists, including:
- ICU doctors
- ER doctors
- Ambulance services
- Medical equipment suppliers
- Lab services ordered by your doctor
What to do if you receive a surprise bill in Arizona
If you weren’t expecting a balance bill, it can be financially stressful. You might be wondering what to do next, if the bill was a mistake, or if it was even legal.
It’s important to note that here in Arizona, the Senate enacted SB 1441 in 2017, to take effect in 2019. This bill will allow patients who receive a surprise balance bill of $1,000 or more to seek arbitration. This process will resolve the issue between the provider and the insurance company.
If you receive a surprise bill and believe it was a mistake, you can call your medical provider’s billing office and ask questions. Remember to record everything they tell you, so you have all the information if you need to appeal to Arizona’s insurance department. If you received a legitimate balance bill, you can try negotiating with the billing department to set up a payment plan, or other options. Some providers will reduce a bill if you’re willing to pay a certain amount of money up front.
You can try to avoid being balance billed by staying in-network and ensuring your insurance company covers all the services you’re receiving. This may not always be possible, but it’s always prudent to ask your provider what services your insurance covers and what services it doesn’t. Additionally, you may be able to negotiate with your insurance company, although this can be difficult.
The Phoenix personal injury attorneys at Plattner Verderame, P.C. are here to help you when you’re hurt due to someone else’s negligence or recklessness. We work to hold the other parties responsible and seek compensation for your losses and medical bills. Contact our reliable legal team today by calling 602-266-2002 or filling out our contact form.
I have been active in leadership in the Arizona Association for Justice (lawyers who represent injured folks, and formerly known as the Arizona Trial Lawyers Association) since 1985. I served as President in 1991. I was an active participant in battles to protect the Arizona Constitution from the insurance industry and big business interests in 1986, 1990 and 1994.
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