Balance billing a no-no in most cases

Contract Language. By Steven M. Harris, AMNews contributor. Sept. 3, 2007.

CONTRACT LANGUAGE

A column examining the ins and outs of contract issues

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Physicians often inquire if they can bill patients the difference between their billed amount for a service and the payer's covered amount. (AMA policy supports physicians' right to balance billing wherever legal or allowed by contract.) The answer, most often, is no.

Payer contracts often include a provision prohibiting doctors from billing a plan's members for covered services in excess of applicable co-payments. The contract of a prominent payer, for example, generally states that "the provider agrees to accept the payer's network rate as payment in full for covered services and shall not balance-bill the payer's subscribers."

If an in-network physician bills a covered patient in violation of such a provision, the physician could risk termination of the contract and financial penalties.

While some payer contracts may not prohibit the balance billing of patients, doctors under such contracts, and even out-of-network providers, should not assume that the balance billing of patients covered by insurance is permitted in their states.

This is because the laws of many states effectively impute a contract between physicians and payers that prohibits providers from balance billing for services that are covered services. In many cases, that also applies to physicians who are out of a plan's network.

In addition, most government-administered health care programs prohibit physicians from balance billing such programs' subscribers. These restrictions, however, vary across the U.S., as do whether they apply to all payers or all physicians.