What is balance billing and how can I avoid it?

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Do you know what balance billing is?

Balance billing. This unpopular term can be a surprise to some, and cause confusion for many people who choose to see Out of Network medical or dental providers. It can also take a chunk of money out of your wallet. Let’s properly define what balance billing is, and then discuss ways to potentially avoid it.

Balance billing defined

In it’s basic form, balance billing is simply being billed for the balance of charges that are due. However it’s most common with medical and dental services where doctors or dentists are considered Out of Network providers with a plan’s network.

In Network versus Out of Network providers

It can help to understand the main differences between In Network and Out of Network providers. In Network doctors and dentists contract directly with specific carrier networks and agree to certain guidelines. One key provision is that In Network providers must agree to accept the network’s lower negotiated amounts for procedures that are performed. These lower negotiated rates can typically be 30-50% less than average retail rates for services. In Network providers are also required to file claims to the insurance company on behalf of the member.

Out of Network or non-participating providers on the other hand, have not made any agreements with a particular provider network, and are not bound to the same requirements. Out of Network providers can generally charge market rates for services they perform.

While they are not required to file claims for members, many non-participating offices will file claims as a courtesy to their patients because plans will typically send payments back to the provider for services they have performed. However, Out of Network providers can choose to bill patients the difference between the insurance plan’s payment and the provider’s higher retail charges, which is considered balance billing.

An example of balance billing

Here’s a brief example. Let’s say a patient has a dental procedure that’s in the 100% coverage category for preventive services, and an Out of Network dentist charges $100 to perform it. But let’s suppose the dental insurance plan only makes a benefit payment of $80 for the procedure based upon it’s plan provisions.

Some Out of Network dentists may be satisfied with the $80 payment, but other providers may choose to “balance bill” the extra $20 to the member. This is an example of balance billing. It may not seem like a big deal in this example, but with larger claim amounts, balance billing can add up to big bucks.

How to avoid being balance billed

Well the easiest way to avoid being balance billed is to only see In Network providers. If you’re being careful to see participating doctors and dentists, then these providers will be required to accept an insurance plan’s negotiated payments for services.

However, it’s not always possible to stay In Network for all your medical or dental care needs. If you choose to see an Out of Network provider, it’s best to ask beforehand if their office balance bills for charges. You can always ask a providers office if they will accept the insurance payment and “write off” any additional charges.

It never hurts to ask, because some offices are willing to negotiate with patients to keep them from leaving and going to see another provider. It’s also better to ask about their billing guidelines before any services are performed, so that you’re not stuck with a big bill after the fact.

It pays to understand how balance billing works

By being better informed about balance billing, and knowing how to talk with providers about their billing guidelines, you can better navigate the process of seeing Out of network doctors and dentists. Hopefully with this knowledge, you’ll be able to keep more money in your pocket too.


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