Balance Billing Mistakes That Can Harm Your Healthcare Organization

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balance billing

As a healthcare organization, it is important to understand the potential pitfalls of balance billing and how it can harm not only your reputation but also your financial stability. In this blog, we will dive into common balance billing mistakes made by healthcare organizations, and how to avoid them. By addressing these issues proactively, you can ensure a smooth and more balanced billing process for both your organization and your patients.

What is a Balance Bill?

Balance billing refers to the practice of billing patients for the remaining amount of a medical bill that exceeds what their insurance covers. In simpler terms, it occurs when a healthcare provider bills a patient for the difference between the provider’s charges and the amount paid by insurance.

Common Balance Billing Mistakes and Their Impact

When it comes to balance billing, there are legal ramifications to take into consideration. These protections are in place to ensure that all qualified medical practitioners use ethical and accurate billing procedures. To avoid negative legal and financial consequences, avoid making the following mistakes.

As mentioned earlier, there are various legal safeguards in the United States that ensure fair billing practices. It is important to be aware of two significant protections – The No Surprise Act and any balance billing protections implemented by the state where your organization operates.

The No Surprise Act

The No Surprise Act is a federal law that was passed to protect patients from unexpected balance billing. It applies to group health plans, health insurance issuers, and healthcare providers. The law aims to ensure that patients do not face surprise medical bills for emergency services or when receiving non-emergency care from out-of-network providers at in-network facilities.

Under The No Surprise Act, patients are protected in the following ways:

  1. Prohibition of Surprise Bills: Patients cannot be balance billed for emergency services, regardless of whether the provider is in-network or out-of-network.
  2. Limits on Out-of-Network Charges: When a patient receives non-emergency care from an out-of-network provider at an in-network facility, the provider can only bill the patient for in-network cost-sharing amounts. The patient is not responsible for paying the remaining balance, and the insurance plan must pay the out-of-network provider directly.

State Rules Limiting or Prohibiting Balance Billing

In addition to federal protections, many states have implemented their own laws and regulations to limit or prohibit balance billing. These state rules vary in scope and applicability, so it is crucial for healthcare organizations to understand the specific regulations in each state where they operate.

Absence of Clear Communication

A lack of clear communication can lead to confusion and frustration for both patients and healthcare providers. Patients should be well-informed about their potential financial responsibility before receiving any services. Providing clear explanations about insurance coverage, deductibles, and any out-of-network fees will help avoid surprise balance bills.

Inaccurate Coding and Billing

Inaccurate coding and billing errors can have severe consequences for both your organization and your patients. When claims are improperly coded, it can lead to inflated bills, resulting in confused patients who feel they are being overcharged. These mistakes can also trigger audits and investigations, jeopardizing your organization’s financial health and reputation.

Stay up to date with CPT codes, as these codes are reviewed annually for updates.

Ignoring Insurance Contractual Agreements

Failing to review and adhere to the terms and conditions of insurance contractual agreements is another common mistake that can harm your healthcare organization. Insurance contracts often specify how balance billing should be handled, and if you ignore these guidelines, you may find yourself dealing with legal ramifications and strained relationships with insurance companies.

Inadequate Staff Training

Providing your staff with insufficient training on balance billing practices can lead to subpar billing procedures and a higher likelihood of errors. From front desk personnel to billing specialists, everyone involved in the billing process should be well-versed in the rules and regulations governing balance billing. Proper training can reduce mistakes, improve patient satisfaction, and safeguard your organization’s financial security.


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Avoiding Balance Billing Mistakes

Like most billing mistakes, balance billing mistakes are avoidable when you’re equipped with the right knowledge and tools. Here are some tips to avoid errors in balance billing.

Regularly Review and Update Contractual Agreements

Insurance contractual agreements can change over time, so it is essential to regularly review and update them as needed. Stay informed about any modifications or updates from insurance providers and make necessary adjustments to your billing practices accordingly. By proactively managing these agreements, you can avoid balance billing mistakes due to outdated or incorrect information.

Consider designating a staff member responsible for monitoring and reviewing contractual agreements with insurance companies. They should regularly communicate with insurance providers to stay updated on any changes in coverage, reimbursement rates, or network status. By actively managing contractual agreements, your organization can ensure accurate billing practices and avoid balance billing mistakes.

Verify Insurance Coverage

Before providing medical services, always verify a patient’s insurance coverage and understand their policy limitations. By proactively identifying any potential balance billing situations, you can communicate the expected costs to the patient upfront, reducing the chances of surprises.

Establish Transparent Billing Policies

Create and communicate clear and transparent policies regarding balance billing. Ensure that patients are well-informed of what to expect and provide written documentation explaining the billing process. This level of transparency builds trust and allows patients to make informed decisions about their healthcare finances.

Billing Software

Consider using a dependable software solution to simplify coding, billing, and insurance verification. These software solutions are equipped with automation tools that minimize the possibility of human errors and ensure overall billing accuracy. For example, a clearinghouse that integrates seamlessly with your existing healthcare software can guarantee that accurate information is captured and communicated throughout the billing cycle, which is crucial to avoid any potential financial losses.

Invest in Ongoing Staff Training

It’s imperative to provide ongoing training and education to your staff to ensure that your billing practices are accurate and compliant. You should include regular training sessions in your organization’s workflow to keep everyone informed about the latest regulations. This will also give your staff an opportunity to address any billing-related questions or concerns they may have.

Key Takeaway

By implementing the strategies mentioned above and being diligent in your approach to balance billing, you can protect your healthcare organization from making costly mistakes that can harm both your finances and your relationship with patients.


Clearinghouse software provides a complete solution to optimize billing procedures, minimize balance billing errors, and improve payment efficiency. You can streamline your billing processes, reduce errors, and ensure timely payment from insurance companies. To discover more about how this solution can benefit you, schedule a demo of Apex EDI’s reliable clearinghouse.

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