The Dos and Don'ts of Balance Billing

If you’ve been in the rehab therapy game long enough, chances are, you’ve heard a thing or two about balance billing. But, if you’re out of the loop—or if you’re wondering what balance billing is, anyway—here’s the gist, according to this article from Becker’s Hospital Review: “The practice of balance billing refers to a physician's ability to bill the patient for an outstanding balance after the insurance company submits its portion of the bill. Out-of-network physicians, not bound by contractual, in-network rate agreements, have the ability to bill patients for the entire remaining balance.” More often than not, this practice results in a patient being “surprised” with an unnecessary medical bill for services he or she believed to be in-network and thus, covered by his or her insurance.

Depending on what you’ve heard about this practice, though, you likely view it as either a necessary evil or a big, fat no-no. But here’s the tea: depending on the location in which you practice, balance billing may be perfectly legal. If that’s the case, it’s important to adhere to the following rules and guidelines:

Do understand the consequences of illegal balance billing.

Understanding what happens if you break the rules is probably just as important as understanding what the rules are in first place. According to this article from Becker’s Hospital Review, “As an increasing number of patients face balance bills, many are questioning the legality and fairness of hospital balance billing practices.” During a recent lawsuit brought by Martinsville (Va.) Memorial Hospital against a patient, the judge ruled in favor of the patient, ordering the hospital to accept 25% of its usual rate as full payment for emergency out-of-network emergency services. The patient's lawyer attested this payment was fair because “the hospital accepts 25 percent of prices specified in its chargemaster as payment-in-full for services to uninsured patients.”

Do check your state laws.

While most states do not have laws against balance billing, the following states do (according to this article from The Commonwealth Fund):

• California
• Colorado
• Connecticut
• Delaware
• Florida
• Illinois
• Indiana
• Iowa
• Maryland
• Massachusetts
• Mississippi
• New Hampshire
• New Jersey
• New Mexico
• New York
• North Carolina
• Pennsylvania
• Rhode Island
• Texas
• Vermont
• West Virginia

Additionally, New Hampshire and Washington kicked off efforts in 2018 to enact or increase consumer protections against balance billing.

Do verify the terms of your insurance contracts.

Of course, just because your state allows balance billing, it doesn’t necessarily mean your payers do. According to this article from AAPC, “If a physician has a contract with an insurance plan and the contract states (hopefully, correctly) that the patient is not responsible for the deductible, copay, or coinsurance for a specific service, then billing the patient is illegal.

Likewise, if a physician has a contract with an insurance plan and has permissibly collected the deductible, copay, or coinsurance, billing the patient for anything above the allowable rate is illegal.”

The Medicaid Loophole

According to the AAPC, for Medicaid providers specifically, balance billing is legal under certain circumstances:

• “If the physician does not have a contract with the insurance plan.
• If the services are non-covered services (think cosmetic surgery) by the insurance plan.
• If the patient chooses to opt-out of using their insurance and be a self-pay patient for any particular service.”

Don’t assume the insurance did everything correctly.

This may come as a shock, but sometimes insurance companies make mistakes. (Okay, that’s probably not a shock.) Things slip through the cracks, which could result in the payer failing to reimburse for services that it should’ve covered—and then informing the patient that he or she has a zero balance due. Other times, when the patient or provider calls to confirm benefits with the payer, the rep conveys outdated information. Some common reasons payers incorrectly process services are:

• system glitches;
• patient failure to provide vital information for coordinating benefits;
• out-of-date patient enrollment or COBRA information; or
• incorrect information about the provider’s network participation.

Don’t attempt to balance bill a qualified Medicare beneficiary.

The Qualified Medicare Beneficiary (QMB) program is one of the ways Medicare helps lessen the burden that premiums, deductibles, and copays can place on lower-income beneficiaries. Recently, Medicare updated its guidelines for balance billing patients who are qualified beneficiaries.

In a nutshell, if you accept Medicare or Medicaid patients, you must accept reimbursement from Medicare or Medicaid as payment in full. If you attempt to bill any Medicare or Medicaid patient for the remaining balance, it could land you in some major hot water, as you’d be violating the terms of your Medicare Provider Agreement—and you could even be subject to sanctions.

Tips for Compliance

So, how can you make sure you’re not attempting to balance bill a QMB patient? Follow these guidelines:

• Learn how to identify your state’s QMB card, as well as the QMB cards for any commercial Medicare payers you’re credentialed with.
• Check your state’s online resource to see if there is a way to identify qualified beneficiaries.
• Educate your billing staff on the rules for QMB exemptions.

Here are some additional considerations for qualified Medicare beneficiaries, as adapted from the previously-mentioned AAPC resource:

• If a qualified beneficiary seeks care in another state, he or she will still retain balance billing protection.
• QMBs cannot waive their qualified status to pay a balance bill.
• Medicaid will cover payments for QMBs, so check in with your local contractor to find out how to request reimbursement for cost-sharing amounts. (Your state may require you to register with a state payment system.)

There you have it: a few simple ways to make sure you are staying in your lane when it comes to balance billing. Got any balance billing tips of your own? Tell us about your experience in the comment section below.