WHAT IS BALANCE BILLING
Balance billing occurs when a medical care provider bills an insured the difference between the provider’s full charge for a service and the amount it agreed to accept from the insurance company as payment if full for that service – the negotiated rate. So it’s an attempt by the medical care provider to collect the balance between the full charge for a service and the negotiated rate paid by the insurance company to the provider for that service. The balance billed has nothing to do with co-pays made by the insured.
Colorado law prohibits balance billing in situations where an insured obtains treatment from a participating provider. C.R.S. § 10-16-705(3). The prohibition against balance billing applies to services provided by a participating provider (sometimes called an in-network provider). Illegal balance billing occurs when an unscrupulous hospital or doctor, that is a participating provider, bills the insured for any service it previously billed to the insurance carrier.
So for example, an insured, while in the hospital, is given an aspirin. Without insurance, the hospital charges the patient $5.00 for the aspirin, but the hospital has agreed to accept $1.00 from the insurance company as payment in full for the aspirin. Illegal balance billing occurs when the person who has insurance is hospitalized at a participating hospital but then gets a bill for $4.00 for the aspirin, which is the difference between the full retail charge for the aspirin ($5.00) and the amount the hospital agreed to accept from the insurance company as payment in full for the aspirin ($1.00). So otherwise stated, prohibited balance billing occurs when an insured is hospitalized, then gets a bill from the hospital for services covered by the person’s health insurance plan. It is illegal because even though the hospital agreed to accept the amount paid by the insurance company as payment in full for the service, it turns around and bills the insured for the difference between the retail price and the negotiated rate. If a person obtains treatment from a participating provider, then Colorado law requires the health insurance carrier to shield the insured from having to pay any amount above what the insurance company paid to the participating provider.
Often times, especially when there is a settlement or verdict obtained by the insured on a personal injury lawsuit, medical care providers patently ignore Colorado’s prohibition against balance billing and attempt to collect for services already paid for by the insured’s insurance company. Unscrupulous medical care providers have even been known to send misleading bills to the personal injury lawyer handling the claim for the insured in attempt to recover the balance billed.
WHEN IT’S LEGAL FOR A PROVIDER TO BALANCE BILL
Balance billing may be allowed in situations where the insured seeks services out of network with a medical care provider that does not have a contract with the insurance carrier – such a medical care provider is called a “nonparticipating provider” under Colorado personal injury law. Colo. Rev. Stat. § 10-16-704 provides a scheme for the payment of benefits to an insured under managed health care. The benefit level an insured receives under C.R.S. § 10-16-704 depends on whether there is an adequate network available to the insured and whether the insured receives services from a participating provider or a nonparticipating provider. The statute requires a health insurance carrier, providing a managed care plan, to maintain a network that is sufficient in numbers and types of providers to assure that all covered benefits to covered persons will be accessible without unreasonable delay. Colo. Rev. Stat. § 10-16-704(1).
If there is a participating provider within a reasonable distance from the insured’s geographic area, and the insured knowingly seeks services from a nonparticipating provider, the insurance carrier is only obligated to pay: (i) the lesser of the provider’s bill of charges, (ii) a negotiated rate, or (iii) the greater of the health maintenance organization’s average in-network rate for the relevant geographic area or the usual, customary, and reasonable rate for such geographic area. Colo. Rev. Stat. § 10-16-704(2)(i)(I). If the reimbursement rate described above is not equal to the nonparticipating provider’s bill of charges, the nonparticipating provider may balance bill the insured. Colo. Rev. Stat. § 10-16-704(2)(k).
In sum, if an insured seeks treatment with an out-of-network provider (a nonparticipating provider), then the law does not prohibit that medical care provider to balance bill the insured. Colo. Rev. Stat. § 10-16-704(3) mandates that an insurer pay to an insured only in-network benefits for all services performed at an in-network facility.
YOUR HEALTH INSURANCE COMPANY IS REQUIRED TO MAINTAIN AN ADEQUATE NETWORK
When a network is inadequate because there are no participating providers available, the insurer must ensure that the covered person obtains the covered benefit at no greater cost to the covered person than if the benefit is obtained from participating providers. Colo. Rev. Stat. § 10-16-704(2)(a). An in-network facility is adequate where there are participating and nonparticipating providers: A carrier providing a managed care plan shall maintain a network that is sufficient in numbers and types of providers to assure that all covered benefits to covered persons will be accessible without unreasonable delay. In the case of emergency services, covered persons shall have access to health care services twenty-four hours per day, seven days per week. Sufficiency shall be determined in accordance with the requirements of this section and may be established by reference to any reasonable criteria used by the carrier․ C.R.S. §10-16-704(1).
Moreover, in any case where the carrier has no participating providers to provide a covered benefit, the carrier shall arrange for a referral to a provider with the necessary expertise and ensure that the covered person obtains the covered benefit at no greater cost to the covered person than if the benefit were obtained from participating providers․ C.R.S. §10-16-704 (2)(a).
When a covered person receives services or treatment in accordance with plan provisions at a network facility, the benefit level for all covered services and treatment received through the facility shall be the in-network benefit. C.R.S. §10-16-704 (3).
Colorado personal injury law can be complicated. If you’ve been seriously injured by another’s negligence or intentional conduct, you should contact Denver Personal Injury Lawyer Gregory A. Hall. If you retain him, Mr. Hall can help ensure that you’re not illegally balance billed by your doctor or hospital and that the at-fault party pays you a fair amount to compensate you for your personal injuries.
Gregory A. Hall
Law Office of Gregory A. Hall
3570 E. 12th Avenue, Suite 200
Denver, CO 80206