What is "balance billing" in the context of healthcare reimbursement?

Balance billing refers to a practice where a healthcare provider charges a patient for the difference between the total amount billed for services rendered and the amount that the patient's insurance has covered. This practice typically occurs when a patient receives care from a provider who is not part of their insurance network. In such cases, the insurance provider pays a portion of the bill according to the terms of the patient's policy, and the remaining balance, which the insurance does not cover, is then billed to the patient.

This situation often arises when there is a discrepancy between what insurance is willing to reimburse and what the provider charges, leading to an obligation for the patient to pay the remaining amount. Balance billing can create confusion and financial strain for patients who may be unaware of these additional costs or who may not understand their insurance coverage limits.

It is important to note that balance billing regulations can vary widely by state and by insurance plan, with some states imposing restrictions to protect consumers from unexpected high out-of-pocket costs. In this context, the other choices do not accurately capture the essence of balance billing, as they pertain to different billing practices or methodologies that do not involve charging patients for the difference between billed amounts and insurance reimbursements.