Balance billing, sometimes called surprised billing, is a medical bill from a healthcare provider billing a patient for the difference between the total cost of services being charged and the amount the insurance pays. It is an especially common problem in the United States with , and therefore not subject to the rates or terms of providers who are in-network. Balance billing has a variable prevalence by market and specialty. Advocates of balance billing argue that it increases the incomes of high-quality healthcare providers, and serves as a measure of their dissatisfaction with insurance company fees. Critics say that balance billing lets providers raise charges through stealth rather than transparent pricing, creates unnecessary administrative costs and patient confusion, and allows providers to simply pass along costs to patients, rather than helping them to secure good value. It is thought to erode political consensus in favor of a one-tier system of healthcare, and to inhibit some people from getting the care they need, by making that care more expensive.
Throughout the 1970s in Canada, the country saw an increase in balance billing, which in Canada is normally called extra-billing. It was not permitted in Quebec or British Columbia, but had been encouraged in Ontario and Alberta, and tolerated in other provinces. The federal government estimated that by 1983, extra-billing across Canada totaled $100 million. The government believed that extra-billing was enabling the creation of a two-tiered Canadian healthcare system, in which people who couldn't afford extra charges would receive lesser care. In 1984, the government passed the Canada Health Act promising universal and comprehensive health coverage for all Canadians, which contained provisions to discourage user fees and extra-billing by imposing financial penalties on and reducing transfer payments to, provinces that permitted them. Today, five provinces prohibit all extra-billing, while Alberta, British Columbia, and Newfoundland allow it in a small number of circumstances, and Prince Edward Island and New Brunswick do not restrict it at all.
United States
Balance billing has received growing attention in the 21st century, particularly “surprise” balance billing. In 1986, Congress enacted the Emergency Medical Treatment and Labor Act to ensure that individuals seeking emergency services had access to care. Because of this Act, health services are required to provide care regardless of an individual's ability to pay for the service. Insurance companies may only cover specific costs which would then require individuals to pay the remaining balance out-of-pocket after the service is performed. In 2019, JAMA published an assessment of out of network billing for privately insured patients, with an out-of-network emergency department medical bill increased from 32.3% to 42.8%. It was discovered that out of the network, medical billing has largely become common for privately insured even when seeking care in an in-network hospital, creating a substantial financial burden. Surprise balance billing is when an out-of-network provider bills an individual for services that were not covered by the insurance plan. This is often a surprise because an individual may be unaware that the services were out-of-network or did not actively choose to see in an inpatient setting. In America, out-of-network care is very common and unavoidable in emergencies. Studies have concluded that in 2014, one in five inpatient emergency department causes will lead to surprise bills. The services that will likely lead to a surprise medical bill are:
20% of emergency department admission
14% of outpatient visits to the emergency department
9% of elective inpatient admissions
Additionally, according to a study published by KFF in 2017, they found that 1 in 6 emergency room and hospital stay resulted in the out-of-pocket bill. In 2017 and 2018, six states passed a variety of laws to limit surprise balance billing bringing the total to 25 states with at least some protections. The six states with a comprehensive approach were California, Connecticut, Florida, Illinois, Maryland, and New York. A comprehensive approach had laws that applied to both HMOs and PPOs, provided protection to emergency department and in-network hospital settings, and prohibited providers from balance billing by creating payment standards or outlining a process for disputing medical bills between providers and insurers. Congress gave the issue serious attention in 2018-2019 with both the House and Senate passing substantive bills out of committee in the summer of 2019. Health insurance in the United States is typically provided by a managed care plan with preferred or exclusive "network" of providers; balance billing does not occur with providers in-network, as the insurer negotiates an agreed rate ahead of the service. Standard medical billing companies offer only the billing element of a physician's needs including supporting innovative approaches to improving quality, accessibility, and affordability, while finding the best ways to use innovative technology to support patient-centered care according to the Centers for Medicare & Medicaid Services. For Americans who receive a surprise balance bill, as of 2019, a total of 28 states increased protection activities for Americans against balance billing such as different emergency settings, types of a managed care plan, type of protection, and method for payments. With the Protection Act, all American citizens can be assisted through the state Department of Insurance for financial aid. For Americans who are not protected by the state law, they can contact primary insurance companies to appeal the payment or make a payment plan with the providers.
In France, physicians who want to charge more than the government-negotiated set fees are considered to be in a separate "payment sector," which essentially means they are treated as self-employed. They can charge higher fees, and receive reduced benefits. In 1987, about 27% of French physicians chose to balance the bill. The percentage is higher for specialists rather than generalists, and for doctors in urban rather than rural areas.
Balance billing is prohibited in Germany. Fee schedules are negotiated between sickness funds and physicians, and physicians are not permitted to charge more than the set amount.
Balance billing is prohibited in Japan, and extra fees are only allowed in a small number of circumstances, such as having a hospital bed with extra amenities.
Balance billing is prohibited in Taiwan, and extra fees have only been allowed recently, and in rare defined circumstances. Today, patients in Taiwan are allowed to choose more expensive versions of some devices such as stents, implants or prosthetics, and to pay the difference in cost themselves.
