What is balanced billing and how does it affect my coverage?

Balanced billing happens when a healthcare provider charges you for the difference between the amount they charge and the amount your insurance will cover.

Many insurance plans set an allowed amount for different healthcare services, sometimes called a usual and customary rate (UCR). The UCR is the maximum amount an insurance plan will cover for a service, based on what healthcare providers in a geographic area usually charge.
 

When does balanced billing happen?

You may be balance-billed when you visit an out-of-network provider. Out-of-network providers don’t have a contract with your insurance carrier, so they decide on any rate they want.

You don’t need to worry about balanced billing when you visit an in-network provider. Because in-network providers have a contract with your insurance carrier, they’ve agreed to charge equal to or below the UCR.

How does balanced billing work?

If you go to an out-of-network provider who charges more than the UCR, your insurance plan will only offer coverage up to the UCR. If you pay out-of-pocket (with your own money) for charges above the UCR, this money won’t count towards any deductible or out-of-pocket (OOP) maximum you have.

Example: You go to an out-of-network doctor for a procedure. Your insurance plan offers 80% coverage for the procedure, and sets a UCR of $100. The doctor charges you $140. 

Your insurance plan will only cover 80% of the $100 UCR, for a total of $80. You’ll have to pay the remaining cost of the UCR ($20), plus the extra $40 in charges, for a total of $60. Only $20 will count towards any deductible or out-of-pocket maximums, because it falls within the UCR.