Insurer Balance Billing: A Practice That Leaves Policyholders in the Dark

Article: Insurer Balance Billing: A Practice That Leaves Policyholders in the Dark

It’s no secret that the amount that doctors and hospitals charge is often very different than what insurance companies want to pay. Although policyholders shouldn’t get caught in the middle of these situations, they often due and many feel completely in the dark about what to do.

What is balance billing?

Insurance balance billing is a concept that has been around for many years and, strangely, hasn’t been resolved by many state insurance departments. Basically, doctors, hospitals and other medical providers charge different fees for their services. However, insurance companies tend to have limits on what they will pay for those services – and those amounts can be very different.

A classic example

The Los Angeles Times recently reported on an ongoing “feud” between Kaiser Permanente and Prime Healthcare. Prime often treats patients in the Kaiser Permanente network. It bills Kaiser for patient care and Kaiser is supposed to pay Prime. However, Kaiser typically says that Prime charges too much for their services and the two companies have been at odds over the issue for nearly two years.

Prime apparently had enough and decided to bill patients for the difference in what Kaiser was willing to pay versus Prime’s actual bill. Although Kaiser sent out 7,000 letters telling patients that they didn’t have to pay Prime’s bill, many patients did because they simply didn’t know what else to do. In fact, it has been reported that millions of policyholders pay unnecessary balance bills every year. Some patients, however, simply cannot pay and end up being hounded by collection agencies.

Imagine receiving a $50,000 balance bill

That’s what happened to one California family. According to the LA Times article, 18 year old Ryan Gledhill was seriously injured in a motorcycle accident in 2006. He was airlifted to the closest hospital to save his life. However, his insurance company, Blue Cross of California, initially would only pay $27,000 of the $78,000 hospital bill because the hospital where Gledhill received treatment was outside of Blue Cross’s network. The Gledhill’s say that they had no choice in the matter as emergency workers decided what was best to save the boy’s life.

Insurance companies generally pay bills for amounts that are reasonable and customary. While some medical providers charge more, it should up to the two companies to sort out the difference. Policyholders should think twice before paying these bills and may want to contact an attorney to discuss their situation. To contact a qualified attorney, please click here.