Avoiding Surprise Bills

Balance billing – or surprise medical bills – happens when you get a bill from a doctor, hospital, or other health care provider who isn’t part of your health plan’s network. Out-of-network providers haven't agreed to treat a health plan's members at discounted rates. Therefore, their rates are higher than the rates negotiated between a health plan and its preferred providers. Even if your health plan pays for some out-of-network services, you will have to pay the difference between what your plan will pay and what the out-of-network provider charges you. This is called balance billing. Out-of-network providers can bill you for these charges; preferred providers cannot.

There are some exceptions. In an HMO or EPO, you typically won't have to pay any balance-billed charges if you received out-of-network care because of a medical emergency or if there weren't any preferred providers available to treat you. In a PPO, you may be balance billed even for emergency services, but your expenses will count toward your in-network deductible and out-of-pocket maximum. If your balance-billed charges from a hospital-based provider are more than $500, you may request mediation.

Choose Providers in Your Plan's Network

Use your plan's preferred provider directory to choose your doctors and other providers. Depending on your plan type, your insurer might not pay for care that you get from providers outside its network. Even if your plan will cover some of out-of-network costs, it will pay a higher percentage of the costs if you use a preferred provider. Most importantly, working with a preferred provider will help you avoid balance billing.

Do I Need a Referral or Prior Authorization?

Look on Page 1 of your summary of benefits and coverage. The summary will tell you whether your plan requires you to get a referral from your primary care physician before seeing a specialist. Usually, HMO plans require a referral to see a specialist - but this requirement doesn't apply to women seeking OB-GYN care. Many plans also require you to get prior authorization before receiving some services, such as surgeries or hospital stays. Review your policy or evidence of coverage to find out which services require prior authorization.

Find out Costs Beforehand

You have the right to know the estimated cost of a medical procedure before receiving it. Many health plans have online tools to help you compare providers based on price and quality. If your plan doesn't have this type of tool, there are other ways to find out the estimated cost beforehand:

  • Ask your insurer. Your insurer can confirm that the procedure is covered under your plan and tell you the amount you will owe in cost sharing. To help you get an estimate, you'll need to know the name of the procedure and the associated billing codes, as well as the name of the provider performing the procedure and where it will be performed. Your doctor should be able to give you this information. 
  • Ask the provider who will perform the service. You can also call other providers to find out their estimated prices. Providers should know the cost of the service, but they probably won't know how much you will have to pay out of pocket. The amount you have to pay will depend on your specific plan's deductible and coinsurance. Take TDI's Estimating the Cost of a Procedure worksheet with you to the doctor to get an idea of the questions to ask.
  • Use the TDI Reimbursement Rates tool to find the average price of some services in your area.
  • Visit Texas Health Compare for more information on health care cost and quality.

Once you know the estimated cost of the service, refer to your summary of benefits and coverage (starting on Page 2) to determine how much you will owe based on your plan's cost-sharing structure.

Request In-Network Facility-Based Providers

When you're in the hospital or another health care facility, you will probably require the services of several different providers. Even if you use an in-network facility, some of the providers who treat you might be outside of your plan's network. For instance, if you have surgery, your doctor might be in your network, but the anesthesiologist or other facility-based provider might be out-of-network. Your plan might not cover all of the anesthesiologist's charges and you may be balance billed. Make sure that you know who will be treating you in a hospital, clinic, or other health care facility and whether they are all in your plan's network.

Contact your in-network health care facility ahead of time about their facility-based providers. Tell the facility the procedure you plan on having and who your insurer is. Then ask if you will have access to preferred providers at all stages of your procedure. If the facility can't ensure that all of your providers will be in your network, you might want to use a different in-network facility. If you can't find a preferred provider, talk to your insurer and understand in advance how you will be billed since no preferred provider is available.

Be aware: facility-based providers often move from hospital to hospital, so it's important to confirm that your facility-based providers will be in-network before each hospital procedure.

Next Section: Handling Surprise Bills

For more information contact:

Last updated: 05/03/2016