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According to healthcare.gov,” balance billing occurs when providers bill a patient for the difference between the amount they charge and the amount that the patient’s insurance pays”. Sometimes it’s legal and sometimes it isn’t.

It is not legal to bill a client the difference between what you charge and the negotiated fee when the counselor has contracted with the client’s insurance company (in-network).  For example, your fee is $120.00 and your contract (in-network) with ABC insurance company states the fee is $70.00. So with a co-pay of $15.00, you agree to accept $55.00 from ABC (co-pay + insurance payment = $70.00) you have to waive the remaining $50.00 of your $120.00 fee.  If you bill the client for that remaining $50.00 that’s called balance billing and it is not legal. You cannot deduct the $50.00 from your taxes because the IRS doesn’t value your time.

It is not illegal to bill the client the total $120.00 if you are not contracted with ABC insurance. Moreover, the client may have “out-of-network” benefits. This is where the insurance may reimburse the client for a percentage of what’s called usual and customary fees. These U&C fees are more times than not, lower than your fee. The balance bill is the difference between what the insurance pays and your total fee and it is legal to charge the client for the remainder. In fact, I recommend if you do not have a contract with the client’s insurance company collecting your full fee at the time of service. The insurance can reimburse the client of any out of network benefits.

As this can be confusing to clients it is imperative to inform your clients of your fees and how they are paid. This needs to be stated in your informed consent document and discussed with them so they fully understand their financial obligation.

For more information consult your legal advisor. As I tell my lawyer friends, if you don’t practice counseling I won’t practice law.

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