Balance Billing
When a healthcare provider bills a patient for the difference between their charge and the insurer's allowed amount.
What is Balance Billing?
Balance billing occurs when an out-of-network healthcare provider charges a patient the difference between the provider's full billed rate and the amount the patient's insurer is willing to pay (the allowed amount). For example, if a physician charges $2,000 for a service but the insurer's allowed amount is $1,200, the provider may bill the patient the $800 balance — in addition to any cost-sharing obligations (deductible or coinsurance) based on the allowed amount. Balance billing has been a major source of surprise medical bills, particularly when patients received out-of-network care unknowingly — such as from an anesthesiologist at an in-network hospital. The federal No Surprises Act (effective January 1, 2022) bans balance billing in most emergency situations and for certain non-emergency care at in-network facilities, limiting out-of-pocket costs to in-network cost-sharing levels.
Example
A patient has emergency surgery at an in-network hospital. Their surgeon is in-network, but the anesthesiologist is not. Before the No Surprises Act, the anesthesiologist could send a balance bill for the difference between their charge and the insurer's payment. Since January 2022, the patient's out-of-pocket cost for this provider is capped at the in-network cost-sharing amount.
Source: CMS — No Surprises Act