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Balance billing is the practice of requesting payment from a patient for the remainder of the charge for an item or service that exceeds the amount allowed by the insurance plan.

Q: Is balanced billing permitted?

A: Many states have prohibitions against balanced billing that will be reflected in participation agreements with insurers or managed care networks. These agreements may contain such balanced billing prohibitions.

Q: I have a patient that would like to purchase a hearing aid that exceeds their covered insurance benefit. Am I only allowed to provide technology that meets the allowed amount? Am I required to provide premium products as a loss?

A: You will need to review the details of the plan. Keep in mind that most insurance companies only cover what is reasonable and necessary. Coverage may not intend to fund premium product choices. In cases where the patient wishes to choose technology that exceeds their benefit, it would be advisable to inquire with the insurance company on their policy for deluxe upgrades. In certain cases, many insurance companies allow patients to sign a waiver to agree to pay the difference for upgrades to deluxe or premium products that exceed the intended benefit. This statement should also indicate that the patient has been offered medically reasonable and necessary technology that falls within their stated benefit.

Q: What is the difference between a participating provider and non-participating provider?

A: In general, a participating provider has contractually agreed to participate in an insurance network. Agreement to participate includes accepting the contracted insurance rates for items or services.

Q: What is the difference between a participating provider and non-participating provider in the Medicare program?

A: The answer to this question involves whether the provider accepts the provider has signed a contract and agrees (or is required by law) to accept the Medicare-approved amount as full payment for covered services. Generally, a provider who accepts an assignment agrees to submit all claims to Medicare and to charge beneficiaries only the Medicare deductible and coinsurance amount and wait for Medicare to pay its share before asking the beneficiary to pay his/her share. Non-participating providers haven’t signed an agreement to accept assignment for all Medicare-covered services, but they can still choose to accept assignment for individual services. 

Q: What is a “limiting charge”?

A: Medicare defines a limiting charge as the highest amount of money you can be charged for a covered service by doctors and other health care suppliers who don’t accept assignments. The limiting charge is 15 percent over Medicare’s approved amount. The limiting charge only applies to certain services and doesn’t apply to supplies or equipment. Again, these charges only apply to non-participating providers. Balanced billing is prohibited for participating providers.

Additional Resources on this Topic:

Medicare and Medicaid General Information

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