In some situations, the charge for medical services is not paid by insurance providers alone. The patient and the insurance company share the cost of healthcare services. As patients are willing to bear the financial responsibility, balance billing comes into action. The billing for remaining balance after insurance provider pays their share is known as balance billing.
There are various reasons for this, but an important one is the insurance provider being out-of-network. This increases medical charges higher than the actual insurance coverage, compelling patients to pay out of their pockets.
As this phenomenon is increasing, healthcare providers must take the initiative to process such situations. Maintaining the bottom line of healthcare practices depends on efficient medical billing. So that patient balances are recovered adequately, and healthcare providers acquire appropriate revenue.
In this blog, we will explore balance billing and learn how healthcare providers can avoid mistakes related to it. By the end, you will get a clear idea of how to deal with challenges like these.
Defining Patient Balances
Patient balances, or patient payments, are the amount that an insurance provider is not eligible to pay. This balance is different from copays, coinsurance, or deductibles. Patients compensate for a charge left after the insurance provider has already paid revenue to healthcare providers.
For illustration!
If the total fee of a healthcare provider was $250, and the insurance provider pays $150 under the insurance cover; also, there is a copay of $50, then the remaining balance payment must be done by the patient.
However, there is an issue with this type of patient payment. This process is not always legal, and healthcare providers may have to go through statutory actions. If a healthcare provider agrees and reconciles insurance coverage with the insurance provider, then patient payment is inapplicable.
If a healthcare provider charges inapplicable balance payment, he/she is eligible for legal consequences. As a result, healthcare providers must make efforts to avoid such illegal actions.
However, if the insurance provider is out-of-network and patients have agreed to share a portion of charges, then balance billing is valid.
Major Flaws in Balance Billing & Ways to Prevent Them
Violation of Legal Requirements
Legal violations can happen by mistake or due to ignorance of healthcare providers. Healthcare providers often misinterpret laws due to limited knowledge. For example, the act known as ‘The No Surprise Act’ prohibits balance billing in case of emergency services even if the insurance provider is out of network. A violation of this act will lead healthcare providers into legal trouble.
However, they can avoid it by staying updated on federal rules and policies related to billing. This will help them avoid such billing and prevent extreme consequences.
Unclear Communication
Lacking transparency and not communicating the financial responsibility to patients may result in illegal balance billing. Patients may not always grasp the terms of insurance coverage, the concept of out-of-network insurance providers, and patient payment. This lack of clarity can affect a patient’s experience and damage the reputation of the healthcare practice.
That is why healthcare providers must keep their patients on the same page. Indulging in clear communication and maintaining transparency helps in reducing such circumstances. Healthcare providers must also devote their time to accurate insurance verification and convey the same to patients.
Errors in Medical Billing
Errors in medical billing and coding are a major reason behind improper balance billing. Incorrect coding leads to under- or overcharging, whereas errors in billing can hamper charge share between patient and insurance provider. Errors also result in miscalculations that cause improper patient payment.
Healthcare providers must understand even minor errors can disrupt the revenue flow and affect patients. For this, they must ensure a streamlined medical billing process. If they are not proficient in managing administrative tasks, they can outsource medical billing services.
Overlooking Contractual Agreements
Overlooking and disregarding insurance contractual agreements is another reason behind inappropriate balance billing. This affects the relationship between insurance companies and healthcare practices. Not adhering to the contractual agreement also results in claim denials leading to revenue leakages. As a result, healthcare providers face financial losses, reputational damage, and legal consequences.
Therefore, healthcare providers must consistently check contractual agreements. They should also align their medical billing process with the agreement requirements.
Collecting Patient Payment through Balance Billing
Healthcare providers can charge patients on the day of the appointment or on a later date.
This depends on the healthcare provider, and both methods are common practice in the case of patient payments.
When it comes to the transfer of money, healthcare providers offer options such as payment through online modes (credit card) or in cash.
However, if healthcare providers want A/R days, they must prefer payments at the point of service. This helps in improving the revenue cycle management and maintaining a reliable cash flow.
How Can Healthcare Providers Improve Balance Billing?
Considering a few steps can help healthcare providers improve their patient payment and optimize balance billing.
Insurance Eligibility Verification
The issues with balance payment start with a misunderstanding of the patient’s insurance coverage. A proper insurance eligibility verification step can solve this issue. This is the right time to set a standard for determining a patient's financial responsibility. Healthcare providers must focus on making balance billing simpler and preventing illegal actions.
Giving patients clear details and allowing them time to decide whether they are ready for out-of-pocket service charges is an excellent way to begin the treatment process.
Deadlines and Reminders
If your patient agrees to out-of-pocket charges, then the next step is communicating deadlines. Healthcare providers must send patients regular reminders to speed up the patient payment process. They must also follow up on the payment status frequently to limit the billing gaps.
Simplifying the Payment Process
Simplifying the payment process for patients allows timely payments and adequate revenue.
Give different payment modes; let patients decide their time of payment (within the due date). Incorporate the right tools to streamline balance billing. Also train your staff to collect charges accurately.
Outsourcing Medical Billing
Balance billing is complex, and with the statutory requirements, it becomes even more challenging for healthcare providers. Mostly, illegal patient payment is caused by inefficient medical billing.
That is why outsourcing medical billing services can help healthcare providers navigate through complex billing and coding. It will improve medical billing steps like insurance eligibility verification, medical coding, staying up to date with regulatory standards, and managing balance billing.
Outsourcing medical billing services simplifies complex medical billing steps and helps healthcare providers achieve maximum reimbursement. Healthcare providers can reduce errors and make their medical billing accurate and efficient.
Bottom Line
Balance billing is best handled when healthcare providers have efficient administrative processes. Thus, they must choose outsourcing and shift their burden to medical billing services.
One medical billing company that can help healthcare providers is Eminence RCM!
Eminence RCM is a well-known medical billing company among the healthcare providers and practices of the USA. We know your medical billing hassle and offer services to eliminate that. Our services help you streamline medical billing steps such as verification, documentation, coding, claim filing, claim submission, denial management, and payment posting.
We are also particular about staying current with dynamic medical billing rules and policies. Our team is 100% HIPAA compliant, making your patients’ sensitive information safe.
Choose Eminence RCM and achieve a better revenue cycle management!
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