Beware of Balance Billing
Ed Smith is a Sacramento Personal Injury Lawyer. Health insurance is a complex topic, but most adults understand the basics of how the average policy is supposed to work. Suppose that Jorge goes to an “in-network” medical provider (meaning a medical provider with whom Jorge’s health insurer has agreed to certain contractual rates for services). Jorge receives services that total $700. He pays his $25 copay and goes on his way (assume Jorge has no deductible). The medical provider discounts Jorge’s medical bill to the rate it had agreed to with Jorge’s insurer, and then the insurer pays the provider the agreed upon rate.
Suppose further that Jorge goes to a medical provider that is not within his health insurance’s network of providers. The medical provider in this case can charge Jorge the full $700. Depending on the terms of the health insurance contract between Jorge and his insurer, the insurer may pay a portion of this bill. The medical provider would then bill Jorge for the balance that remains afterward. This practice is known as “balance billing.”
When Balance Billing Crosses the Line
Nothing is improper or unethical about either of the two situations described above. However, some California residents have been subjected to an unethical and unlawful version of balance billing. In this scheme, the resident seeks treatment from an in-network provider with whom the resident’s insurer has a contractual relationship. Pursuant to this relationship, the provider has previously agreed in general to accept a certain amount from the insurer as payment in full for certain services. The medical provider receives the agreed-upon sum from the insurer but then proceeds to balance bill the resident for the difference as if no contract existed between the provider and the insurer. This type of balance billing is not permitted under California law. Nor is this practice legal for individuals who are insured through Medicare or Medicaid.
Improper balance billing seeks to extort money from insured patients. If patients do not take action or cannot pay the bill, they are penalized with negative credit ratings, collection activities, and/or collection lawsuits.
What If I Need Emergency Treatment?
Suppose now that Jorge is in medical distress and needs emergency treatment. He goes to the nearest hospital (which does not have a contractual relationship with Jorge’s insurance company). Jorge receives emergency treatment and goes on his way. The hospital bills Jorge’s insurance company $700 – its usual rate for the services received – but Jorge’s insurer will only pay $400 – the amount it pays for similar services with its in-network providers. Even in this situation, the hospital cannot balance bill Jorge. Thanks to the 2009 California Supreme Court decision of Prospect Medical Group, Inc. v. Northridge Emergency Medical Group, the court held that these situations must be resolved between the insurer and the medical provider and cannot include or involve the insured individual.
What Can I Do if I Am Being Balance Billed?
If you received a bill from a medical provider requesting you to pay for services rendered, prompt action is necessary to protect your rights and interests. Ask yourself:
- Did you receive services from an in-network provider? If so, the provider may not bill you for the balance after having received the contracted-for amount from the insurer.
- Did you receive emergency medical care from an out-of-network provider? If so, here too the provider may not bill you for the balance of the bill once the insurance company has paid.
- Did you receive non-emergency care from an out-of-network provider? If so, you can be billed for the balance.
Protect your credit rating, your finances, and your peace of mind by retaining the services of me, Ed Smith, a Sacramento Personal Injury Lawyer since 1982. Call me anytime at 916-921-6400 in Sacramento or 800-404-5400 Elsewhere.
Photo Attribution: Wikimedia Commons [Images in the public domain]