What Is Balance Billing?

Balance billing occurs when an out-of-network healthcare provider bills a patient for the difference between what the provider charges and what the patient's insurance paid — the "balance." A patient in a network hospital might receive care from an out-of-network anesthesiologist, radiologist, or emergency physician and subsequently receive a bill for thousands of dollars that their insurance didn't pay. Balance billing has been one of the most significant sources of unexpected medical costs, but major federal legislation — the No Surprises Act — has substantially curtailed the practice for many situations effective January 2022.

How Balance Billing Works

When you receive care from an in-network provider, your insurer has a negotiated contract that establishes the allowed amount — the maximum your insurer will pay for a given service. You pay your share (deductible, copay, coinsurance) and the insurer pays its share. The in-network provider cannot bill you above the allowed amount — they have contractually agreed not to.

When you receive care from an out-of-network provider, no such contract exists. The out-of-network provider bills their full charge (which may be far above what insurers consider reasonable). Your insurer pays a portion (often based on "usual, customary, and reasonable" — UCR — rates), and you are potentially responsible for the remainder — the "balance."