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Don Jacobs
Don Jacobs
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The Imbalance of Balance Billing

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A hallmark of fiscal responsibility is paying your bills in full and on time. The last thing you want, especially after an accident, is the added stress of a poor credit score or an outstanding bill. However, post-accident bills don’t always work like your regular monthly bills, mostly due to the involvement of insurance companies. In the case of medical bills, in many cases, the industry dictates the amount your treatment is worth and pays that amount. Contracts often exist between hospitals, doctors and insurance companies. These contracts usually limit what a provider can charge for a particular service. They also generally prohibit the provider from trying the collect the balance or “balance bill” the patient. The contracts work a benefit to both the provider and the insurance company. The provider gets access to patients who have the coverage. They also get assurance their bills will be paid promptly and without having to resort to collection efforts. The insurance company benefits by being able to hold down costs and make more of a profit off the money coming in from the people covered by the insurance. Providers who are on contract with a particular insurance company are often referred to as “in network providers”. Typically an insurance company will provide a list of providers in your area who have contracted with the insurance company. If you go to an “out of network” provider you may end up having to pay the portion of the bill not covered by the insurance. Sometimes providers, even if they are “in network”, try to bill a patient for the balance of the bill not paid by the insurance coverage. This happens more often in auto accidents. Providers know a settlement is coming at some point and refuse to bill the medical insurance covering the patient. They do this because they know they may be able to collect the full amount of the bill when the case settles, avoiding any insurance company write of. This is becoming more and more of a problem on auto accident cases and other cases involving an insurance settlement. An attorney experienced in this area of law will usually inquire as to whether the provider has a contract with the insurance company. Attorneys know checking to see if the health care provider is prohibited from balance billing can save the consumer money. If you are not represented by an attorney, call your insurance company if you receive a balance bill. Ask if the provider is obligated to accept the insurance as payment in full. Some states have enacted legislation to deal with this problem. Washington has law that forbids a provider from billing a patient if they’ve signed a contract agreeing to accept what the insurance pays. California also passed recent legislation forbidding balance billing.

2 Comments

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  1. Mark Bello says:
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    Don: Thanks for posting this. This is another “dirty little secret” where the insurance companies take advantage of the public for expenses that they would not otherwise seek from health care providers. Members of the public shoud read and re-read this valuable information and make sure that they seek professional legal advice before paying any balance bill.

  2. Mike Bryant says:
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    I agree this is very important information. In Minnesota we occasionally find providers that will still seek payment, even though their contract and even the law tells them they can’t collect the difference. It clearly is a case of taking advantage of people that want to do the right thing and pay all their bills.