Balance Billing: Is It Legal?

Balance Billing: Is It Legal?

Stay in line with private carrier rules and follow updated Medicare and Medicaid guidance.

Balance billing is charging the patient for any balance on their account after insurance has paid its portion. The question on everyone’s mind is: Does the patient truly owe the balance after insurance pays?
The simple answer is, if there is a contract between the insurance plan and the physician practice, the practice may collect up front from the patient:

  • Co-pays
  • Co-insurance
  • Deductibles
  • Any amount due for services the plan does not cover

If there is no contract between the insurance plan and the physician practice, the practice is not limited in what they may bill the patient.
Of course, it isn’t really that simple. Knowing when you can or can’t balance bill takes a bit more explanation.
When to Balance Bill, and When Not To
If a physician has a contract with an insurance plan and the contract states (hopefully, correctly) that the patient is not responsible for the deductible, co-pay, or co-insurance for a specific service, then billing the patient is illegal.
Likewise, if a physician has a contract with an insurance plan and has permissibly collected the deductible, co-pay, or co-insurance, billing the patient for anything above the allowable rate is illegal.
For Medicaid providers, balance billing is legal:

  • If the physician does not have a contract with the insurance plan.
  • If the services are non-covered services (think cosmetic surgery) by the insurance plan.
  • If the patient chooses to opt-out of using their insurance and be a self-pay patient for any particular service.

Here’s the rub: Sometimes (actually, many times) the insurance company is not right. It fails to pay for things that should be paid, and informs the patient that they have no balance. That information may be confirmed by the insurance plan when the patient calls, simply because the company is referencing its own information. Some reasons why an insurer might process the services incorrectly are:

  • There is a glitch in their system.
  • They will not pay until the patient provides information to determine coordination of benefits.
  • The patient’s enrollment or COBRA information has not caught up in the system.
  • They have incorrect information about the physician’s participation in the network.

Special Case: The Qualified Medicare Beneficiary
Medicare recently updated information related to balance billing patients who are qualified Medicare beneficiaries (QMBs).The QMB Program helps Medicare beneficiaries of modest means pay all or some of Medicare’s cost sharing amounts (i.e., premiums, deductibles, and co-payments). To qualify, patients must be eligible for Medicare and must meet certain income guidelines. The income guidelines change April 1 each year.
The QMB program provides:

  • Payment of Medicare Part A monthly premiums (when applicable);
  • Payment of Medicare Part B monthly premiums and annual deductible; and
  • Payment of co-insurance and deductible amounts for services covered under both Medicare Parts A and B.

Note: Medigap premiums are not covered by the QMB.
Eligibility criteria for this program require:

  • The individual to be eligible for Medicare Part A insurance (even if not currently enrolled); and
  • The monthly income to be at or below 100 percent of the annual federal poverty level, which is issued annually by the U.S. Department of Health and Human Services.

Note: Individuals who are eligible for Medicare Part A, but not enrolled, may conditionally enroll in Medicare Part A at any time during the year, after which they may apply for QMB to cover the cost of the Medicare Part A premium.
If a patient is eligible for the QMB program, purchasing additional Medigap coverage for Medicare premiums, deductibles, and/or co-payments may be unnecessary. Review the benefits covered by the Medigap policy to see if the plan covers services other than the Medicare cost-sharing that may be useful to the patient.
QMB Provider Certification for Title 19
The QMB program pays the 20 percent Medicare Part B co-insurance if the service provider is certified as a Medicaid provider. Note, however, a provider may choose to treat only QMB patients and not all Medicaid recipients. The provider may also limit the QMB patients he or she sees. Providers have no obligation to treat Medicaid patients, or anyone in particular (I’m asked this question a lot!).
Medicare Update on Balance Billing
According to MLN Matters® SE1128 Revised, February 1, 2016:

Federal law bars Medicare providers from balance billing a QMB beneficiary under any circumstances … QMB is a Medicaid program for Medicare beneficiaries that exempts them from liability for Medicare cost sharing. State Medicaid programs may pay providers for Medicare deductibles, coinsurance and copayments. However, as permitted by federal law, states can limit provider reimbursement for Medicare cost sharing under certain circumstances …

Medicare providers must accept the Medicare payment and Medicaid payment (if any) as payment in full for services rendered to a QMB beneficiary. Medicare providers who violate these billing prohibitions are violating their Medicare Provider Agreement and may be subject to sanctions. … Despite federal law, erroneous balance billing of QMB individuals persists. Many QMBs are unaware of the balance billing guidelines (or concerned about undermining provider relationships) and want to pay the cost-sharing amounts.
How to Ensure Compliance with QMB
Providers who participate in original Medicare and Medicare Advantage Replacement Plans — not just Medicaid participants — must follow balance-billing prohibitions.
QMBs retain balance billing protection when they receive care in other states. QMBs cannot waive their QMB status and pay Medicare cost-sharing.
Find out how to file for monies that Medicaid pays for QMBs. Understand the processes you need to follow to request reimbursement for Medicare cost-sharing amounts if they are owed by your state. To bill your state, you may need to complete a state provider registration process and be entered into the state payment system.
Here’s how to identify QMB patients in your patient population:

  • Learn what your state’s QMB card looks like.
  • Find out if your state system can be queried to identify QMBs.
  • Contact the commercial Medicare plans you accept to learn what their QMB card looks like.
  • Make sure your billing staff exempt QMB individuals from Medicare cost-sharing billing and related collection efforts.

Balance Billing Terminology

Contracted plan: An agreement between an insurer and a physician stating the physician agrees to accept a specific dollar amount for each service, regardless of what the physician actually charges for the service.
Allowable: The contracted amount the physician has agreed to accept as complete payment for a service. The allowable is made up of the portion the insurance will pay and the portion the patient must pay.
Write-off: The difference between the physician’s charge and the allowable, which may not be collected from either the insurance plan or the patient.
Accepting assignment: A physician who accepts assignment agrees to the insurance plan’s allowable and write-off amounts. Some people equate accepting assignment with being a participating physician, but a physician can participate in Medicare and not accept assignment.
In-network: This originally meant the physician was contracted with a preferred provider organization (PPO), but now often means a physician is contracted with any plan. This most often comes up when a patient is referred to an out-of-network provider for services, or when a patient undergoes a surgery or procedure in a hospital that is in-network, but the anesthesiologist, radiologist, pathologist, intensivist (critical care), hospitalist, emergency room doctor, or neonatologist is not.
Shots Health News, NPR, “States Make Laws to Protect Patients from Hidden Medical Bills,” Michelle Andrews, July 15, 2015
MLN Matters® SE1128 Revised, February 1, 2016

Mary Pat Whaley, FACMPE, CPC, has more than 30 years’ experience managing physician practices of all sizes and specialties in the private and public sectors. She is board certified in Medical Practice Management. Whaley draws 30K+ visitors to her website ( monthly, and is a Healthcare LinkedIn Thought Leader with 275,000+ followers. She is the originator of Credit Card on File for medical practices. Whaley’s mission is to create sustainable financial viability for small independent physician practices. She is a member of the Durham, N.C., local chapter.

Anesthesia and Pain Management CANPC

24 Responses to “Balance Billing: Is It Legal?”

  1. Daryl Marie Hawley says:

    Please Help! I can not find the rules for: A “out-of-network” doctor talks to the patient over the phone, not face-to-face. Can the doctor charge the patient? I know in-network providers, to be paid, must use an interactive audio and video telecommunications system that permits real-time communication between you, at the distant site, and the patient at the originating site. – telemedicine.
    Thank-You, I hope you can help.

  2. THERESA says:

    Question….if a physician chose not to be participating with TMHP and a patient has Medicare as primary and Medicaid as a secondary can the physician bill the patient for the secondary balance?

  3. Joe Weidner says:

    Through enhanced payment as part of a quality program, our biggest commercial insurer has now increased our fee schedule to 190% of Medicare. Our other insurers hover around 80-120% of Medicare. However, as this sits on the shoulders of their insureds with increasingly higher deductibles, we feel that it is unjust to simply bill the patients this amount. Of course, their deductibles may be eventually met, and the insurer will then be paying the full amount.
    That said, we would like to in some way not stick it to our patients, but find it’s probably illegal or fraudulent, perhaps contractually, in some way to collect less from that insured’s patients. We do have a self-pay policy for those without insurance and a sliding scale for those in need, including free visits for those at or below 250% of the poverty level. I suspect that most of those insureds would not qualify for the sliding scale.
    I was thinking about an insert into the bill of those who have not met their deductible “ Your insurance company has identified us as a high quality practice and has generously allowed us collect the current fee noted in this statement. As the deductible for your insurance policy has not yet been met, it is your responsibility to pay this. However, we do not wish this to be a financial barrier to your future care. IF you feel that paying this amount would be a financial barrier to your future medical care, check this box and enclose whatever amount you can afford.”
    So I am looking for an opinion that this wording would not be illegal or fraudulent. Would this method be enough to document a financial burden? Would this need to be spelled out in our financial policy?

  4. Robert sam says:

    Patient has medicaid SLMB plan is it legal to Bill patient for medicare left over balance ,

  5. Janet says:

    If a patient is QMB and we have a NC Medicaid denial stating only the Part B PREMIUM is covered, is it acceptable to apply the amount to the patient responsibility. Keep in mind this is the amount that has been applied to patient deductible, coinsurance, or copay AFTER Medicare or the Medicare Advantage policy has paid. I am getting conflicting information from Medicare and Medicaid. Also, all information online is conflicting. Any help would be greatly appreciated. Thanks!!

  6. Amanda says:

    We are not contracted with Evercare Medicare Advantage, can we balance bill the patient?

  7. Gloria says:

    I have the same question on medicare advantage plan balance billing. If you are a participating medicare provider but do not have contracts with the medicare advantage plans, are you allowed to balance bill the patient for non payment due to being out of network?

  8. Tina says:

    Our office is contracted with Anthem and we have a patient who has been involved in auto accident and we understand legally we have to bill the Health Insurance along with the auto insurance as they coordinate the benefits. My question is, any of the non-covered charges by the health insurance can we legally bill that part to the auto insurance?

  9. Arlene says:

    We have a patient with Aetna as primary and Medicaid as a secondary. We are non-par with Medicaid. If Aetna applies a portion towards the deductible, can we bill the patient?

  10. danielle says:

    We have a patient with medicare as primary and Medicaid as a secondary. We are non-par with Medicaid. If Aetna applies a portion towards the deductible, can we bill the patient? also where do providers stand when a pt has a large deductible can he reduce the cost to charge the patient if they do a prompt pay this being with a insurance we have a contract with and are in network with?

  11. Chrsitne` says:

    We have a patient that has 2 commercial insurance plans. The primary applied the full contracted rate to deductible. The secondary insurance only paid what their allowable is and applied an additional adjustment over what the primary adjustment was. This leaves a balance due because their allowable is less than the primary. Can the patient be billed for this? Our contract does not specifically cover when they are a secondary payer.

  12. Tammy Hall says:

    IF a provider is not in net work with an insurance company, but they are trying to get in network with them, can the provider bill the patient as if they were in network, even though the insurance paid out of network?

  13. Brian K says:

    Can you site any source for your statement that a provider “has no obligation to see QMB patients”? I interpreted your comment might even apply when a provider participated in both original Medicare and Medicaid. I understand the balance billing aspects once a patient is accepted, but was looking for additional authority that a provider has no obligation to accept these patients. Specifically I would like you opinion and any authority that would allow a participating provider to not accept QMB patients. Also, would it mater if some of these QMB patients have state Medicaid or a Medicaid managed plan that the group does not accept? Some Medicaid plans are very problematic in terms of the amount and ability to collect cost shares.

  14. Melinda says:

    It is actually quite shocking to see all of these Medicaid and Medicare providers on here, taking the time out of their busy schedules, to find advice on how to nickel and dime away the poorest members of society.
    “We already were paid by Medicare, then we were paid by Medicaid, but that left us with a $20 balance. Can we also bill the Patient?”
    Oh, by the way, the amounts you all bill are totally Arbitrary. I worked for a well-known Plastic Surgeon, the billing is just made up guidelines. But yeah, let’s squeeze them dry.
    You’re all supposedly educated in Medical Billing, yet you’re on here asking about how to take more and more money from the Patients. For the doctors who you work for that live in million+ dollar homes, you all earn $12-$17/hour. I know. I was a Medical Photographer and we had 3 Billers, not a single one could be bothered to do their job of actual Medical Billing, so I ended up learning how to bill, diagnosis codes and procedure codes. No wonder that something like 85% of Medical Bills have errors on them.
    And no, if you accept Assignment for Medicare, you don’t Balance Bill. These are the people who are either Elderly, or Disabled. Doctors, pharmacies, clinics, hospitals, etc. already OVER charge for the services that patients receive, this is without the illegal Balance Billing.

  15. kathy says:

    Medicare is primary Medicaid 2ndary not contracted with Medicaid do i need a waiver on file or can i just balance bill the patient

  16. Holly says:

    I haven’t seen any answers on here about Medicare primary and Medicaid secondary. We par with Care but not with Aid, can we bill patient their co-pay and deductible? Want to make sure we are doing it accurately. I see this question a number of times but no answers posted.

  17. Tammy Webb says:

    When billing to a commercial carrier can we charge a copy if it is a Masters level clinician?
    If the claim denies for a non-contracted provider (masters level) can we keep the copay?
    If the claim denies for anything other than non-contracted do we have refund the copay?
    Is there a policy or guidelines for commercial billing or is it up to the discretion of the facility to determine whether the copay is refunded to client?
    Thank you!!!

  18. Michelle says:

    We have a patient that failed to give us his new Mcr Adv plan and the claim was filed to Mcr. Mcr denied stating he has an Adv plan but when we filed the ct to them they denied for no authorization. Can we bill the patient since he failed to notify us of this change even though he has Medicaid as secondary?

  19. Lori Hadley says:

    To whom it may concern,
    I just found out ( due to a denial letter from my secondary health insurance plan) that a provider that I have been seeing for many years (who didn’t accept my secondary health insurance plan and wouldn’t even copy my insurance card and put it in their system (my Medicaid HMO) ) had been billing my Medicaid HMO in addition to billing me. This sequence of events followed their billing my primary health insurance which is Medicare. Is this acceptable billing practices? I am on Medicaid because I am medically indigent and I told this providers office when I first started going there this. Not too sure where to turn to if it turns out the provider was taking *advantage of me (* for a loss of a better word right now) Any help in this matter would be greatly appreciated.
    Lori Hadley

  20. I BLEED BLUE says:

    Lori Hadley
    It depends on your state, Medicaid always pays secondary to Medicare, with usually an 80%/20% split, meaning Medicare pays 80% of the cost and Medicaid pays 20%. Any remaining balance with the doctor’s office IS A WRITE OFF and a write off only, and NOT billable to a member. I worked for TDHHS, DSNP, Medicaid and Medicare plans for over 2 years for a certain VERY LARGE insurance company I cannot mention online due to having to use my email address, but they are blue, so there is your hint. I was a call center customer service advocate supervisor (CSA super-agent AE08548) with specialty in the legal aspects of claims billing, payment, processing, etc, authorizations, Rx coverage, networks, G&A, the works.
    Just look up above, the balance billers are EVERYWHERE, even the big companies, looking at you LabCorp, and they have zero concern for you, your finances, your situation, nothing. All they care about is money and it is SICK. Disgusting individuals that are no better than those scammers that call old ladies and try to get them to give out money/credit card numbers.
    Balance billing is illegal. There are contracted rates that are agreed on at a federal level that govern the cost of a service. PERIOD. The left over amount after the contracted rate is paid is NOT PATIENT RESPONSIBILITY for dual members like you. For example, the doctor can bill $20k for a toilet seat, but they will only be PAID PER CONTRACT RATES, and the rate for the toilet seat may be around $6.15. The large gap left over DOES NOT SPECIFICALLY CONSTITUTE member responsibility, unless you have been notified BY YOUR INSURANCE company to pay that amount.
    Also, if you feel it is unfair or not what you agreed to, you can personally call the insurance company and REQUEST THAT A CLAIM BE REPROCESSED and reviewed by actual humans, not just an automated claims processing system, who know what they are talking about, LIKE ME. Keep fighting!

  21. MM says:

    I work for personal injury attorney’s office. Our client has Aetna. They hired a company to collect reimbursement on their behalf for what they paid for our client’s injury treatment. There is another company, USCB, also asserting a lien, and a 3rd company, Health Advocates, stating they have a lien for the amounts “written off/adjusted” by the facility. The totals of all of these bills exceed the client’s settlement and appear to be balance billing, however Health Advocates states that the facility has a contract with the insurance that does not prevent it, and then a separate contract with them. If this cannot be done, under which California code section or which federal law is it not legal? I am looking to help the client. Sadly the attorney is thinking he should withdraw from this matter. I think he thinks it’s too much trouble to research. I’d like to help the client.

  22. MM says:

    I work for a PI law firm. I am not an attorney. I wish to help our client. She has Aetna health insurance which has hired a company to assert a lien against any settlement. There is a second company also asserting a lien, and yet a third company, Health Advocates, stating that they also have a lien. They claim they have a lien for the amounts “written off/adjusted” by the facility. They claim this is not balance billing as the facility has a contract with both the insurance company and them. The attorney assigned to the file is leaning towards withdrawing from the case and leaving the client to deal with all of this. I’d like to help the client. Any advise would be appreciated.

  23. DTN says:

    If the patient’s primary payer is a commercial plan and they need to update the information with them, but has Medicaid secondary, can we bill the patient to update the commercial information?

  24. Oasis Guevarra says:

    What if provider is contracted with Medicaids and the codes that we are billing gets a denial due to the code is not on their Medicaid fee schedule – should we balance bill the patient?
    as per Medicaid we can balance bill the patient as long as the patient is aware before providing the service but what if we only have to verify the primary insurance since patient has a Medicare as primary it is an Auto passed to provide the service to the patient.
    thank you in advance, any advise would be appreciated.