Balance Billing
The practice of a provider billing a patient for the difference between the provider's charge and what the insurer paid, now largely prohibited in emergency and many in-network-facility scenarios under the No Surprises Act.
Balance Billing is a term from U.S. hospital cost and quality reporting — the field that produces the CMS Hospital Compare program, the Medicare Inpatient Payment files, and the patient-facing tools built on top of them. The definition below covers what the term means in CMS files, what it does not mean, and how it interacts with the other measures CMS publishes. On the LakeQuality value rubric, Balance Billing is one of the inputs (directly or indirectly) to the combined cost-and-quality grade. Understanding how the term is computed at CMS — what counts and what does not — is part of reading hospital pages defensibly.
Each hospital page on LakeQuality surfaces the specific Balance Billing value for that facility (when CMS reports one), so the general definition here translates into a concrete data point on the per-hospital pages you actually use.
How It Works
Balance billing occurs when a healthcare provider charges a patient the difference between the provider's billed amount (often at chargemaster rates) and the sum of what the patient's insurer paid plus the patient's cost-sharing. Before 2022, balance billing was routine for out-of-network providers: a patient with a $15,000 emergency appendectomy bill whose insurer paid $4,500 and patient cost-share was $1,500 could receive a "balance bill" for the remaining $9,000. The No Surprises Act, effective January 1, 2022, prohibits balance billing in three key scenarios: emergency services at any facility (including hospital emergency departments, freestanding emergency rooms, and urgent care centers that provide stabilizing care), non-emergency services at in-network facilities when performed by out-of-network providers who the patient could not reasonably choose (anesthesiologists, radiologists, pathologists, emergency physicians, assistant surgeons, hospitalists), and air ambulance services. In these scenarios, the patient's financial responsibility is limited to in-network cost-sharing amounts, and providers must pursue additional payment through the Independent Dispute Resolution (IDR) process with the insurer rather than billing the patient. Patients who receive a prohibited balance bill can file a complaint with CMS through the No Surprises Help Desk (1-800-985-3059), which has handled tens of thousands of complaints and resulted in refund orders and provider fines of up to $10,000 per violation. Balance billing remains legal in three main contexts: ground ambulance services (a major ongoing gap), services at out-of-network facilities that are not emergencies (though consent-based disclosure rules apply), and providers who opt out of Medicare and bill patients directly. State laws in California, New York, Texas, Florida, and about 30 others provide additional protections for state-regulated health plans.
Related Terms
- Surprise Medical Bill (Balance Billing), An unexpected bill from an out-of-network provider for the difference between the provider's charge and the insurance payment, largely prohibited for most scenarios since the No Surprises Act took effect January 1, 2022.
- No Surprises Act (NSA), A federal law effective January 1, 2022 that prohibits surprise billing for most emergency services and out-of-network services provided at in-network facilities, and creates Good Faith Estimate and dispute resolution protections.
- Independent Dispute Resolution (IDR), The baseball-style arbitration process created by the No Surprises Act that resolves payment disputes between out-of-network providers and insurers without involving the patient.
- Good Faith Estimate, A written estimate of expected charges for scheduled healthcare services that uninsured or self-pay patients have the right to receive under the No Surprises Act, effective January 1, 2022.
- EMTALA (Emergency Medical Treatment and Labor Act), A 1986 federal law requiring Medicare-participating hospitals with emergency departments to provide screening and stabilizing treatment to all patients regardless of ability to pay or insurance status.
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About This Definition
This definition is part of the HospitalCostData Hospital Pricing Glossary, 47 terms explaining hospital costs, quality ratings, and healthcare billing. Written for patients, journalists, researchers, and healthcare professionals.