Balance Billing Revisited

bonus calculationBy: Karina Gonzalez

Balance billing happens when a provider collects from a patient the difference between the provider’s total billed charge for the service and  the allowed amount  paid by an HMO or insurer for the service.  A provider’s collection of  a deductible, co-payment or co-insurance from a patient is not considered balance billing.

When an HMO pays a provider’s service it is generally  paying the amount it is required to pay pursuant to its contract with a member. Reimbursement  is not generally based on the provider’s billed charge.  HMO and insurers calculate the allowed amount based on what they consider to be a usual, customary and reasonable charge for the particular service. 

A patient’s  co-insurance obligation is a requirement found in a contract with  health plan.  It  requires a patient  to pay a prescribed portion of the cost of the covered healthcare service.  Co-insurance is established as a predetermine percent of the allowed amount for covered services rather than a percent of a provider’s billed charge. The  remainder  after payment by the HMO or insurer and after the collection of the co-insurance amounts is  the balance of the bill.  A provider can generally conclude that  the balance of the bill exists because  the total billed charges exceeded the allowed amount.

Under Florida law you cannot balance bill a patient  for any service covered and authorized by an  HMO,  if  the HMO is liable and responsible for payment.  This is true whether you are in-network or out-of-network.  Even hospital  based physicians who are out-of-network cannot  balance bill HMO members once the HMO accepts liability for payment.

Florida has enacted direct prohibitions relating to providers waiver of co-payments and deductibles where it is the patient’s obligation to pay pursuant to their health benefits coverage. However, there  is no  enactment relating to a mandatory duty by a provider to balance bill.  A provider’s duty to collect co-payments and deductibles is well established and there are  criminal and civil penalties under Florida law for the failure to do so. There is no similar law mandating balance billing  by the provider once  the provider receives the patient’s payment of co-insurance  and the payor’s payment..

Please note this article does not address Medicare or Medicaid.  An out-of-network physician can balance bill when the patient is not covered by an HMO or Medicare or Medicaid.

2 thoughts on “Balance Billing Revisited

  1. Pingback: Drug & Alcohol Treatment Facilities Face Unique Challenges in 2015 | Florida Healthcare Law Firm Blog

  2. Pingback: Governing Boards in Healthcare Organizations – Making Compliance Your Priority | Florida Healthcare Law Firm Blog

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