What Is Balance Billing?

Balance billing occurs when a healthcare provider charges you the difference between their full billed amount and the payment they received from your insurance company. If a doctor bills $5,000, your insurer pays $2,000, and the doctor sends you a bill for the remaining $3,000 — that $3,000 is a balance bill. Balance billing is one of the most common sources of surprise medical bills, and federal law now prohibits it in many common situations.

How Balance Billing Happens

Balance billing most frequently occurs with out-of-network providers. When you see a provider who is not in your insurance network, they have no contract with your insurer and are not bound by the insurer's negotiated rates. Your insurer pays what it considers reasonable (the "allowed amount"), and the provider can theoretically bill you for anything above that.

Common scenarios where balance billing occurs:

Emergency care: You have a true emergency and go to the nearest ER — which may be out of network. The ER facility may be in network but the treating emergency physician, radiologist, or anesthesiologist may be employed by a separate out-of-network group. Before the No Surprises Act, this was an extremely common source of surprise bills.

Out-of-network providers at in-network facilities: You specifically chose an in-network hospital for your surgery, but the anesthesiologist or assistant surgeon is an out-of-network provider you had no say in choosing. This is called "inadvertent" or "surprise" out-of-network billing.

Air ambulance services: Air ambulances are among the most notorious balance billers. A single air ambulance transport can result in a balance bill of tens of thousands of dollars after insurance pays its share.

Lab and radiology services: Your in-network doctor orders lab work or imaging, but the lab or radiology group that processes the test is out of network.

The No Surprises Act: Federal Protection Since 2022

The No Surprises Act (NSA), effective January 1, 2022, fundamentally changed the balance billing landscape for many of these situations. Here is what it prohibits:

Emergency services: Out-of-network providers who furnish emergency services cannot balance bill you above in-network cost-sharing levels. This applies to emergency rooms, freestanding emergency departments, and providers of emergency care — regardless of network status.

Non-emergency care at in-network facilities: If you receive non-emergency care from an out-of-network provider at an in-network facility (hospital, ambulatory surgical center), that provider cannot balance bill you — unless you gave voluntary informed consent. The consent must be in writing, given at least 72 hours before the service (or 3 hours before if scheduled same-day), and must explain that in-network options are available and what the estimated out-of-network costs are. Consent is NOT valid for anesthesiology, pathology, radiology, neonatology, or diagnostic services — you cannot be asked to waive your No Surprises Act rights for these services.

Air ambulance services from participating providers: Air ambulance services furnished by providers participating in federal programs are covered under the NSA.

Cost-sharing limits: Under the NSA, your cost-sharing for these protected services cannot exceed what it would have been if the provider were in-network.

State Balance Billing Protections

Many states had balance billing protections before the federal No Surprises Act, and some states have laws that go further than federal law. States with strong balance billing protections include California, New York, Texas, Illinois, Florida, Colorado, and others.

State laws may cover services not covered by the federal NSA — such as non-emergency care from out-of-network providers at in-network facilities in situations where you gave consent, or ground ambulance services (which are NOT covered by the federal NSA).

How to Dispute a Balance Bill

If you receive a balance bill that you believe is prohibited under the No Surprises Act or state law, here is how to dispute it:

1. Do not pay the bill immediately. Paying a balance bill may be interpreted as accepting responsibility for it.

2. Identify whether the NSA or state law applies. Was this an emergency? Was it at an in-network facility? Was the service one of the protected categories?

3. Contact your insurer. Report the balance bill to your insurer. Under the NSA, the insurer is required to hold you harmless and may need to take action against the out-of-network provider on your behalf.

4. Contact the provider's billing department. Inform them in writing that you believe the balance bill violates the No Surprises Act (cite 42 USC 300gg-111 et seq.) and you are disputing it.

5. File a complaint. For NSA violations, complaints can be filed with the Centers for Medicare and Medicaid Services (CMS) at cms.gov/nosurprises. For state law violations, file with your state insurance commissioner.

6. Request a good faith estimate. For scheduled services, providers are required under the NSA to provide a Good Faith Estimate of expected costs before your service. If your bill exceeds the GFE by more than $400, you can use the Patient-Provider Dispute Resolution process.

What to Do If This Applies to You

Review every balance bill against the No Surprises Act before paying. If the service was an emergency, was at an in-network facility, or involved a provider you had no ability to choose, there is a strong chance the balance bill is illegal under federal or state law.

Fight Back With ClaimBack

Balance bills are often illegal — but providers and insurers count on patients not knowing their rights. ClaimBack helps you identify whether the No Surprises Act applies to your situation, build a formal dispute, and engage your insurer to take the action it is required to take on your behalf.

Don't pay a bill that the law says you don't owe. Start your dispute with ClaimBack.

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