By: Karina Gonzalez
Balance billing happens when a provider collects from a patient the difference between the provider’s total billed charge for the service and the allowed amount paid by an HMO or insurer for the service. A provider’s collection of a deductible, co-payment or co-insurance from a patient is not considered balance billing.
When an HMO pays a provider’s service it is generally paying the amount it is required to pay pursuant to its contract with a member. Reimbursement is not generally based on the provider’s billed charge. HMO and insurers calculate the allowed amount based on what they consider to be a usual, customary and reasonable charge for the particular service.
A patient’s co-insurance obligation is a requirement found in a contract with health plan. It requires a patient to pay a prescribed portion of the cost of the covered healthcare service. Co-insurance is established as a predetermine percent of the allowed amount for covered services rather than a percent of a provider’s billed charge. The remainder after payment by the HMO or insurer and after the collection of the co-insurance amounts is the balance of the bill. A provider can generally conclude that the balance of the bill exists because the total billed charges exceeded the allowed amount.
Under Florida law you cannot balance bill a patient for any service covered and authorized by an HMO, if the HMO is liable and responsible for payment. This is true whether you are in-network or out-of-network. Even hospital based physicians who are out-of-network cannot balance bill HMO members once the HMO accepts liability for payment.
Florida has enacted direct prohibitions relating to providers waiver of co-payments and deductibles where it is the patient’s obligation to pay pursuant to their health benefits coverage. However, there is no enactment relating to a mandatory duty by a provider to balance bill. A provider’s duty to collect co-payments and deductibles is well established and there are criminal and civil penalties under Florida law for the failure to do so. There is no similar law mandating balance billing by the provider once the provider receives the patient’s payment of co-insurance and the payor’s payment..
Please note this article does not address Medicare or Medicaid. An out-of-network physician can balance bill when the patient is not covered by an HMO or Medicare or Medicaid.