Balance Billing
A non-network provider billing the patient for charges above the plan's allowed amount; prohibited for Medicare assignment and by ACA limits, a key risk of out-of-network PPO use.
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Practice This Concept
A Medicare provider who accepts assignment agrees to:
Accept the Medicare-approved amount as payment in full, billing the beneficiary only for the deductible and coinsurance — A participating provider who accepts assignment takes the Medicare-approved amount as full payment for the service: Medicare pays its 80% share and the beneficiary pays only the Part B deductible and 20% coinsurance. A non-assigning provider may bill the beneficiary the full charge and collect from Medicare separately, and in some cases may impose a limited 'excess charge' above the approved amount. Assignment therefore protects the beneficiary from balance billing beyond their normal cost-sharing, which is why beneficiaries are encouraged to use participating providers who accept assignment.
National insurance concept
A major medical policy pays covered charges based on the usual, customary, and reasonable (UCR) amount. A provider charges $500 for a service for which the UCR amount is $350. How is the $150 difference handled?
The insured is responsible for the $150 excess above the UCR amount, in addition to any deductible and coinsurance — A policy that reimburses on a UCR basis limits the amount payable to the usual, customary, and reasonable charge for the service in the geographic area. The insurer pays its share, such as 80%, of the UCR amount after the deductible, and the insured is responsible for the remainder of the actual charge. If the provider bills more than the UCR amount, the insured owes the difference above UCR, which is called an excess charge or balance billing by a non-participating provider. This is why using in-network or participating providers matters: they agree to accept the approved amount as payment in full, eliminating the excess charge.
National insurance concept
- Medical ExpenseA Medicare provider who accepts assignment agrees to:
- Medical ExpenseA major medical policy pays covered charges based on the usual, customary, and reasonab…
- Medical ExpenseCompared with an HMO, a PPO generally offers its members:
- Medical ExpenseA physician who accepts Medicare assignment agrees to:
- Medical ExpenseWhen a Medicare provider "accepts assignment," the provider agrees to:
- Medical ExpenseWhich of the following generally counts toward a health plan's annual out-of-pocket max…
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