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Patient Balance Billing

Over the years, I have had a lot of questions surrounding how to ensure you are “legally” balance billing a patient. I’m sure everyone is familiar with this necessary evil but, by definition, balance billing is charging the patient for any balance on their account after insurance has paid its portion.



It is important to adhere to the following

rules and guidelines:


1. Do verify the terms of your insurance contracts:


Even if your state allows balance billing, it doesn’t necessarily mean your payers do. According to the AAPC, “if a practitioner has a contract with an insurance plan and the contract states (hopefully, correctly) that the patient is not responsible for the deductible, co-pay, or co-insurance for a specific service, then billing the patient is illegal. Likewise, if a physician has a contract with an insurance plan and has permissibly collected the deductible, co-pay, or co-insurance, billing the patient for anything above the allowable rate is illegal.”


The Medicaid Loophole


Balance billing to Medicaid patients is legal under certain circumstances:

  • If the provider does not have a contract with the insurance plan and the patient still chooses to receive services with your agency; or

  • If the client has Medicaid and the plan has lapsed due to failure by the patient or care-giver to provide the necessary information to ensure and maintain eligibility


Don’t assume the insurance did everything correctly:


Shockingly enough, insurance companies make mistakes (Okay, that’s probably not a shock.) There are times when an insurance company may fail to reimburse for services that it should have covered – and then informing the patient that he or she has a zero balance due. There are also times when the patient or provider calls to confirm benefits with the payer and the representative provides outdated or erroneous information.


Some common reasons payers incorrectly process services are:

  • System glitches;

  • Patient failure to provide vital information for coordinating benefits;

  • Out-of-date patient enrollment or COBRA information;

  • Incorrect information about the provider’s network participation; or

  • Failure, by office staff, to request specific benefits (i.e., outpatient mental health services)


Don’t attempt to balance bill a qualified Medicare beneficiary


According to CMS.gov, the QMB Program is for people with Medicare who are also enrolled in Medicaid and get help with their Medicare premiums and cost-sharing.

In order to ensure you’re not attempting to balance bill a QMB patient, you should follow these guidelines:

  • Learn how to identify your state’s QMB card, as well as the QMB cards for any commercial Medicare payers you’re credentialed with

  • Check your state’s online resource to see if there is a way to identify qualified beneficiaries

  • Educate your billing staff on the rules for QMB exceptions

If you would like information regarding the latest Medicare updates on this (as of October, 2019), please reference https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM11230.pdf).



Payment Agreements


The Payment Method Selection Form/Payment Agreement allows you to process payment either by credit card, debit card or electronic bank payment on a designated date each month in order to collect any outstanding patient responsibility.


The form should outline the following:

  • Choice of payment (cc, debit card or electronic check)

  • If this is to be a one-time or re-occurring payment, and

  • Advise there would be a pre-determined charge for any payments returned for non-sufficient funds or insufficient available credit


It is less stressful to the patient/guarantor to allow Administrative Staff to verify benefits prior to the patient’s initial visit then speak with the family when they present to explain benefits and advise of any out-of-pocket expenses. This is also a great opportunity to present them with the “Payment Method Selection Form” or Payment Agreement and advise, should they have any remaining responsibility, a statement would be sent either by email or snail mail (based on patient preferences outlined at the time of intake) to advise of any remaining balance. Then, on the date they designate on the payment method selection form/payment agreement, payment would be processed according to their preferences.


By implementing this policy, you are able to ensure patient responsibility is not causing an increase to your accounts receivable and patients are able to manage their financial obligations to your agency for the valuable services they are receiving.


If you have additional questions regarding this topic or have other questions regarding Practice Management, please feel free to schedule a consultation call at your convenience.


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