Balance billing, in which a provider bills a member for the difference between what their carrier will pay for a service and that provider’s “retail” rate, is a relatively common practice in the medical industry and is allowable in certain circumstances for people enrolled in some types of individual and family plans. For Medicare beneficiaries enrolled in Medicare Advantage plans, however, the practice is explicitly forbidden by CMS except in a very narrow set of circumstances.
With any Medicare Advantage HMO or PPO, including Point of Service HMOs and Regional PPOs, members are protected from paying more than their agreed upon cost sharing for any covered services. These kinds of patient protections are a key part of the Medicare system, and are agreed to by all providers who choose to treat Medicare beneficiaries, including non-contracted providers who agree to accept assignment on a case by case basis. While in some cases balance billing to the plan may be allowed, that should be handled between the provider and the plan and not involve the member. Unfortunately, if claims are processed incorrectly due to confusion or misinformation at a provider’s office, members may still end up billed for services for which, by law, they should not be liable. In the case of any confusion, members should be guided by the Explanation of Benefits provided to them by their carrier above bills sent to them by providers. It is not unusual to see a provider bill a patient before the claim has been processed and paid by the carrier, resulting in an incorrect amount shown due.
It’s important to note that the restrictions on balance billing apply only to members in Medicare Advantage plans, and only to services covered by their MA plan and by Original Medicare. Members in Medicare Advantage plans that do not cover out-of-network providers, members seeking services that are outside the scope of their coverage (even through a Medicare participating provider), members who see providers who have opted out of Medicare entirely and are not contracted with their plan, and members with Medicare Supplement plans would all be subject to different charges and afforded different protections.
As their agent, you are the first point of contact for questions or problems for many clients, so if a Medicare Advantage client calls you asking about a bill they received, refer to the following.
If they saw a plan contracted provider – There is no balance billing paid by either the plan or the member. Member is responsible only for their share of cost as determined by their plan.
If they saw a non-plan contracted, Original Medicare participating provider – There is no balance billing paid by either the plan or the member. Member is responsible only for their share of cost as determined by their plan, which may be higher than their share of cost when seeing a plan contracted provider. This situation applies only to members in plans with out-of-network benefits and does not apply to members in HMOs that do not cover out-of-network providers outside of emergencies.
If they saw a non-plan contracted, non-Original Medicare participating provider – The Medicare Advantage plan may owe the provider the difference between the Medicare limiting charge and the member’s cost-sharing, but the member is only liable for their standard copay amount or their standard coinsurance percentage calculated using the Medicare limiting charge, not any higher amount billed to the plan by the provider. As in the above example, this only applies to members in plans with out-of-network benefits. For example, if a Medicare Advantage PPO member sees an out-of-network, non-participating provider, and the member has a 20% co-insurance for seeing out-of-network providers, that member would be liable for no more than 20% of the Medicare limiting charge, which is 109.25% of the Medicare fee schedule rate. The provider may bill the plan for any additional amount, but that should not involve the member.
While members are of course still liable for their cost-sharing, including out-of-network charges, it’s important for agents to be aware of the potential for mistakes and to be able to help answer questions or reassure clients who may have concerns about billing, despite it being the primary responsibility of the carrier. After all, this is a service business, and even just a few pieces of information and the right phone number to call can make a client feel well taken care of, and that should always be the goal.