Can I charge my clients the difference between my hourly rate and what insurance paid?

We've seen quite a few scenarios when it comes to charging clients out of pocket. One of the more confusing instances is when it comes to Balance Billing.

Balance Billing Basics

Balance Billing is the process of charging your clients the difference between your hourly rate and what insurance pays. This is tricky to get right and we do not recommend the practice of balance billing as it depends on the state you're in and the contract you signed with each insurance company.

On some insurance company EOBs, you'll see a statement similar to "the patient does not owe more than the insurance company pays". This means that once a payment has been paid to the provider, the patient owes no more than that amount and must not be charged any extra. Sometimes this will mean you'll have to reimburse the patient. Other companies do not take a stance on balance billing. Either way, the details will be in your contract.

Medicare

With Medicare, it is illegal to charge the patient any extra cost. The payment the insurance company pays you is the maximum rate you are allowed. 

In-network

The most important advice we can offer is to check your contracts! The best way to stay within the legal boundaries is to call the insurance company and check what their policy is or what your contract specifically states. If you are over-charging your patients, you could run into issues such as having your contract revoked or even having your claims audited and payments repossessed.

Some insurance companies do allow balance billing in certain scenarios. For example, as per Anthem BCBS CA guidelines, you can balance bill if:

  • The member misses an appointment
  • The member owes a copayment amount
  • The member owes a co-insurance amount
  • The member owes a deductible amount
  • The service is not covered by the member’s plan
  • The provider does not participate in the Anthem provider network
  • Services are denied because they are seen as not medically necessary, or not referred and the member signed a waiver form BEFORE receiving the services.

Some examples of when balance billing is not allowed, as per Anthem BCBS CA guidelines:

  • The provider failed to comply with established policies/procedures such as completing an authorization or submitting claims within timely filing limits.
  • For any unpaid balance remaining when benefits coordinated between applicable health plans do not fully cover the charges.
  • If the copayment, coinsurance and/or deductible amount collected from the member at the time of service exceeds the actual member liability as shown on the remittance advice (RA), then the provider will be required to promptly refund to the member the amount overpaid.

Out-of-network

As an out-of-network provider, you're not restricted by a contractual obligation to not charge a patient more. The provider must have a written agreement before the services are performed saying the patient understands they are liable for any extra payments.

An insurance scenario

Your standard practice rate is $200, so you charge your patients upfront. You then file the claim to the insurance company. The claim pays at $150, in most cases, you must reimburse the patient the $50 that was overcharged. The $150 represents the agreed amount in your contract with the insurance company. 

Here is a good example we like to reference from Anthem BCBS, which explains their policy on billing patients. Every insurance company is different, so we recommend going onto their respective websites or calling them directly to learn more about their policies under your contract.