Medical “Balance Billing” Collections

“Many providers across the country are now billing the patients for the difference between what the insurance companies pay and the usual fee.  It is illegal for the provider to do this.  When challenged, the providers will blame it on ‘computer error’ and correct the bill.  But there are many patients who will pay the wrong bill and are not aware of the mistake”, an insurance underwriter’s opinion piece as quoted in the Kansas City Star on June 20, 2005.

Federal Register Vol 63, No 243 of December 18, 1998 defines “inappropriate balance billing” as “the practice of billing Medicare beneficiaries for the difference between the total provider charges and the Medicare Part B allowable payment”.  In short, the Federal Government prohibits physicians from charging Medicare patients more than the amount Medicare is willing to pay.  This is great news for those covered under Medicare, as any medical collections on their credit report can be challenged and deleted based on the prohibition against ‘balance billing’, but what about the rest of the insured?

Well, it all depends on the state in which you reside?  Many states have statutes and /or regulations in place that address the issue of balance billing.  California, for example, had Executive Order S-13-06 signed by Governor Shwarzenegger on August 4, 2006 to protect patient’s rights.  Governor Schwarzenegger stated: “I am protecting Californians who have done the right thing, bought insurance, and now are being charged for something they do not owe because of a dispute between the provider and the health plan.  The state will try to provide extra tools to help ensure fair and fast payment – but leave the unwitting consumer out of it”.  

Those pesky medical collections.  Balance-bill-’em off your credit report!