What is it called when a patient is charged the difference between the allowed amount and the charges billed?

Balance billing refers to the practice wherein a healthcare provider bills the patient for the difference between what the insurance company allows and the total amount billed by the provider. This occurs when a provider is not contracted with the patient’s insurance plan and charges a higher fee than what the insurance is willing to pay.

This concept is particularly relevant in scenarios where a patient may receive services from an out-of-network provider. The provider submits the claim to the patient’s insurance, which may only cover a portion of the services based on allowed amounts. The remaining balance becomes the patient’s responsibility, leading to balance billing. Understanding this term is critical for patients to be aware of potential unexpected costs that can arise when interacting with healthcare services, especially when they utilize providers outside their insurance network.