Balance Billing Explained

Balance billing is also called surprise billing because it often takes people by surprise. And unlike unexpected parties and gifts, it’s not the type of surprise one wants. Because it’s such a source of frustration for patients, some states have taken steps to protect them from this practice.

But what is balance billing, and what can you do about it? You don’t have to fear surprises at the doctor’s office if you know what to expect. So read on, because we examined the facts around this issue and explain how you should handle it if it ever happens to you. 

What Is Balance Billing?

Balance billing is when a healthcare provider bills you for the remaining costs of your treatment after your insurance company has paid its limit. If you aren’t expecting it, this can come as a huge surprise, which is why balance billing is often referred to as surprise billing.

This difference between the total cost of services being charged, and the amount the insurance company is paying, is more common with out-of-network providers.

Common Reasons For Balance Billing

Going to off-network providers often means that the insurer will not cover the costs. But sometimes, depending on the type of health plan you have, they will cover some costs. Unlike the approved network providers, out-of-network providers have not negotiated favorable rates with the insurer.

They are not subject to any terms and conditions of your policy, or those lower rates. That’s why there’s often a significant difference between what they will charge and what the insurer will pay. 

How Balance-Billing Happens

Most policies have a deductible amount you must meet before the insurer covers your medical bills. Until it is met, you will pay your bills out-of-pocket. Even after you reach the deductible, your insurance will cover a specified amount (co-payment), or a percentage (co-insurance) of your bill. 

Fortunately, although they may differ from one plan to the next, those out-of-pocket expenses have limits, which the law expects the insurer to abide by.

Balance billing is an out-of-pocket expense because you are responsible for paying the specified amount on that surprise bill. But it is not one of the out-of-pocket expenses governed by your health insurance. You can also not count your balance billing amounts towards your health plan’s deductible.

When It Happens

Balance billing happens after you’ve paid your deductible, copayment, or coinsurance, and the insurer has paid what it’s obligated to pay. 

If you’ve received a legitimate balance bill, you must pay it directly to the provider. However, they may be willing to agree to a payment plan if you cannot settle the full amount in one payment.

Is Balance Billing Legal? 

Whether balance billing is legal is difficult to answer. That’s because it is legal in some states, while it is not in others. 

21 states have direct protections laid out in statutes or regulations regarding balance billing for care by out-of-network providers in emergency departments or in-network hospitals. So your location will play a role in what the answer is for you.

California, Connecticut, Florida, Illinois, Maryland, and New York have comprehensive laws regarding balance billing. Balance billing is illegal in Florida, in many situations. In other states, balance billing protections will vary. But there are a few other factors to consider, too. 

The legality of balance billing is in a state of flux. If in doubt about what balance billing protections your state affords you, consult the health insurance exchange for your area.

When Is Balance Billing Legal?

Sometimes, balance billing is legal and you will not have much legal recourse to challenge it. This is usually a result of choices that you willingly make about your healthcare, despite the terms and conditions of your health insurance policy.

  • When you choose to use a healthcare provider that doesn’t have a contract with your insurer. This means that you willingly went out-of-network for medical or health services. 
  • When you receive services that aren’t covered by your health insurance policy, regardless of whether the provider has a contract with your insurer. Once again, this must be a decision on your part, to receive services you knew would not be covered.

Depending on how your plan is structured, some out-of-network costs may be covered. However, in such a case, the provider is not obligated to accept your insurer’s payment as the full payment. They may still send you a bill for the rest, even if it’s higher than your plan’s copay or deductible amounts. 

HMO and EPO health plans don’t cover out-of-network services at all. There is one exception – an emergency that causes you to go off-network. In an emergency, a delay while traveling to an in-network provider would be potentially life-threatening. 

When Is Balance Billing Illegal? 

There are a few instances when balance billing is undeniably illegal. This is usually not because of choices you have made, but irregularities by the provider.

  • When the healthcare provider has a contract with your health plan but bills you for more than that contract allows.
  • When you are on Medicare, and you go to a healthcare provider who accepts Medicare.
  • When you are on Medicaid, and you go to a healthcare provider that accepts Medicaid. (Be aware: if you have moved to another state, you’ll have to terminate your Medicaid coverage and reapply for coverage in the new one).
  • In medical emergencies, or when you go to an in-network hospital but unknowingly receive health or medical services from an out-of-network provider.

Please take note that, even in emergencies, you may still be billed for any ground ambulance charges you incur. This is not considered an instance of illegal balance billing. 

How To Handle An Unexpected Balance Bill

Check If The Balance Billing Is Bogus

Look at the examples given above for when balance billing may be legal. If none of those situations apply, the bill is not legal and you can challenge it. If the provider is on your insurer’s network but is billing you for an amount you are not liable for, contact your insurer immediately.

Negotiate With The Medical Office

Negotiate with the medical office if you have to. They would rather have you pay the bill off in installments than not at all. Don’t ignore your responsibility to pay the bill. This can result in debt collectors calling you – yet another surprise you don’t want!

Negotiate With Your Insurance Company

You can also try to negotiate with your insurer, although this may not be as successful as negotiating with the healthcare provider. 

If your plan allows out-of-network providers, it only covers a small portion of the costs. And once the insurer has paid the out-of-network rate, you’ll have difficulty arguing why they should have paid more. 

However, you may request a reconsideration. Ask the insurance company to reconsider their decision to cover this as out-of-network care, and cover it as in-network care, instead. 

Similarly, if you went to an out-of-network provider on a plan that makes no allowance for this, you’ll have a very hard time convincing the insurer to pay. However, if you had a compelling reason (either medical or logistical) for choosing that provider, they may be open to negotiation.

What Protects You From Balance Billing? 

The No Surprises Act, which took effect in 2022, protects you from the surprise of balance billing. It protects patients receiving both emergency and non-emergency care. 

How The No Surprises Act Protects You

The No Surprises Act requires hospitals and doctors’ offices to notify patients when they receive out-of-network care and to charge them for in-network costs only. The Act also allows patients to report any out-of-network charges they have not agreed to.

How Can I Avoid Being Surprised By Balance Billing?

You can avoid balance billing by making informed decisions before going to the healthcare provider.

First, consider the type of health plan you have. Does it allow you to go to off-network providers? If it does, can you afford the balance left after the insurer pays the portion they’ve agreed to? If not, are you willing to accept that you’ll be paying out-of-pocket?

Next, inform the provider that you would like a favorable rate, or ask about payment plans. It’s always easier to negotiate boiling before it happens. This puts you in a position of power, and you can make an informed decision. 

The Best Way To Avoid Balance Billing

If you can’t come to an agreement with your insurer to cover the costs off-network and your provider is not open to negotiation, what’s next? You should consider one of two things:

  1. Use only in-network providers (unless it’s an emergency)
  2. Choose a plan that gives you more freedom in your choice of providers

The best way to avoid balance billing is to avoid getting into that situation. This is much easier when you have the right health insurance plan. 

There are various health insurance plans, and the one you choose should provide you with enough options for healthcare providers. It can be daunting choosing a plan out of all the plans available. But it’ll be much simpler if you go through an insurance broker or adviser, like Enhance Health.


Surprise bills at the doctor are never welcome, but there are ways to avoid it happening to you. One of them is to avoid going to off-network providers. But the best way to avoid it, of course, is to choose a plan that gives you the best healthcare provider options. 

Enhance Health can help you find the health plan that gives you those choices at a price you can afford. No matter your budget or your requirements, we will find the right plan for you. Just good advice, reliable service, and no surprises. Give us a call today. 

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