Balance billing is when your hospital or provider bills you for the difference between their original charge and the amount your insurance paid plus your copay, coinsurance and deductible payments. Using in-network hospitals and physicians typically protects you from balance billing because their contractual agreements with insurance plans limit total payments for covered services to a negotiated or “allowable” rate.
For example, if the provider’s charge is $200 but the total allowable insurance amount is $100, the provider agrees to perform the service for $100 for patients with that insurance coverage. The insurance company may pay part or all of the $100 depending on the patient’s copays, coinsurance, and deductibles.
The practice of balance billing is somewhat controversial, because the patient has already paid their share of a medical bill through copays and coinsurance. In some states it’s illegal.
The best way to avoid balance billing is to make sure your providers are in-network (keep documentation such as a screenshot), and carefully read through your plan’s explanation of benefits so you don’t get hit with any surprises. If you’re ever in doubt about whether or not you owe a particular bill, contact your health insurance carrier’s customer service department to review your claims.