Some Oregon patients may be facing extreme medical debt due to illegal billing practices made by their medical care providers, Bloomberg reports. Doctors, hospitals and other providers often implement a practice known as balance billing in order to receive as much money as possible from patients after treatment. While the practice is illegal when in-network providers are involved, many patients are threatened by debt collectors and pay in full without ever being aware of their rights.
The Oregon Department of Consumer and Business Services states that balance billing occurs when a provider bills patients for the difference between the contractual amount that the insurance company pays and what the provider charged. This only occurs after all coinsurance has been accounted for. For example, a patient with a 20 percent coinsurance stays at an in-network hospital and is charged $40,000. The insurance company negotiates a discounted rate of $30,000 so it pays $24,000, which is 80 percent of all charges. The patient is then responsible for the coinsurance in the amount of $6,000. Balance billing occurs when the hospital is not happy with the negotiated amount and bills the patient for the $10,000 difference between the initial charges and the negotiated amount in addition to the $6,000 coinsurance, making the total due $16,000.
Bloomberg further states that balance billing is more likely to occur when medical providers believe that insurance is taking too long to process payment or that the negotiated discounts are deep. However, when patients receive care from in-network providers, or are using Medicaid or Medicare, the practice is strictly illegal. Those who are found guilty of balance billing can face steep fines, a Medicaid and Medicare ban, or even criminal charges.