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Just because the doctor sends you a bill does not mean you owe him money.

If you’ve found yourself opening a medical bill that you thought your insurance would cover, it pays to ask questions. You may be dealing with what’s known as “balance billing,” a sometimes illegal practice used by some medical providers.

Under “balance billing,” a health care provider bills the patient for services that are covered by the patient’s insurance, but for which the insurer doesn’t pay the entire amount the health care provider wants to collect.

In-Network Visits Should Negate Balance Billing
Here’s how things might work: Say your insurance requires a copay of 20%. You go to an in-network doctor who charges $100 for his or her services. However, the insurance company only allows $70 for the service. If the doctor is in your network, your insurer will pay $56, or 80% of the $70 charge. Your copay will be $14, which is the remaining 20% of the $70. What about the $30 your insurer isn’t covering? That matter is between your insurer and health care provider, but both will have contractually agreed not to bill you for it.

In addition to the contractual agreement, the insurance codes in most states require insurers and health care providers that are part of an HMO network to “hold harmless” the patient, says Kevin Lucia, assistant research professor with the Georgetown Health Policy Institute. That means providers can’t legally go after patients if the insurer fails to reimburse the entire amount charged by an in-network provider.

Most balance billing comes into play when you see out-of-network health care professionals.

Out-of Network Visits Can Mean More Bills
A second scenario, in which the doctor charging $100 is out of network, changes the numbers. Your insurance company still pays the $56. You, however, may get charged $44, or the balance between the $100 bill and the $56 payment. This practice is typically legal because no agreement is in place between your insurance company and doctor, which would prevent the doctor from billing you for this remaining amount.

What’s most confusing is that you can end up using an out-of-network provider despite your best intentions, or without even realizing it. In an emergency, of course, you may not have a choice of waiting for an in-network provider. In other cases, it’s not clear upfront that a healthcare provider is out of network. For instance, a surgeon at a hospital may be in your network, while the anesthesiologist and radiologist are not. Even the savvy healthcare consumers are unlikely to inquire about this. Finally, your doctor may refer you to a specialist who is outside your network. The treatment may be important to your health, but you can still end up with a balance bill.

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States Taking Action
A handful of states, including Colorado, Florida, Maryland and Wisconsin have enacted laws aimed at balance billing, according to a report for the California Healthcare Foundation, of which Lucia is a co-author. However, the protections vary from state to state. Colorado, for instance, requires insurers to protect consumers from balance bills if they received care in a network facility, but from a non-network provider, says Peg Brown, deputy commissioner for consumer affairs in Colorado. In California, ER doctors cannot balance bill HMO members.

How to Protect Yourself
“Ask a lot of questions before you get health care services,” says Jane Cooper, president and chief executive officer of Patient Care, a Milwaukee, Wisc., advocacy firm. Check whether all the health care providers you expect to see are part of your network. Request the information in writing. Although an insurer may balk at taking the time to do this, the request sends the message that you’re trying to be a prudent consumer of health care.

Also, be sure to double check all bills. Many consumers pay up when they do not have to. According to the California Association of Health Plans, a health plan advocacy group, more than 1.76 insured California residents who visited an emergency room in 2006 and 2007 were billed an average of $300 on top of copays and deductibles, or $528 million total.

What if, despite your best efforts, you end up owing money on a balance bill? If your insurance is through your employer, ask for assistance from your human resources department, advises Brown. If paying the bill presents a hardship, talk with your health care providers and try to negotiate a reduction.

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