Billing basics
Balance billing
Balance billing is when a provider bills a customer for the difference between the provider’s full charge and the amount a third party (such as an insurer) has already paid.
How balance billing works
Balance billing happens most often in healthcare. If a provider charges $300 for a service and an insurer pays $200, the provider may "balance bill" the patient for the remaining $100, the balance between the charge and the payment received.
More broadly, balance billing is any invoice for the leftover amount after a partial payment from another party has been applied. The customer receives a bill for what’s still outstanding.
When it applies (and when it doesn’t)
In healthcare, balance billing is common with out-of-network providers, though laws like the U.S. No Surprises Act now restrict "surprise" balance bills in certain emergency and in-network situations.
For everyday business invoicing, the same idea applies whenever a deposit, insurance payment, or partial payment leaves a remaining balance, you issue an invoice for the difference still owed.
Example: A clinic charges $500, the insurer allows and pays $380, and the patient’s plan leaves $120 uncovered. The clinic sends a balance bill for the remaining $120.
FAQs
Frequently asked questions
Is balance billing legal?
It depends on context. In U.S. healthcare, laws like the No Surprises Act restrict balance billing in many emergency and in-network situations, but it can still apply with some out-of-network care. Outside healthcare, billing for a remaining balance is standard practice.
How is balance billing different from a regular invoice?
A regular invoice bills the full amount owed. A balance bill only charges the leftover amount after a third-party or partial payment has already been applied.
Related terms
Invoice
An invoice is a document a seller sends to a buyer that itemizes goods or services provided and requests payment by a stated due date.
Invoice payment
An invoice payment is the funds a buyer sends to a seller to settle the amount owed on an invoice, by or before its due date.
Payment terms
Payment terms are the conditions on an invoice that state when payment is due and how it should be made, for example "Net 30" or "Due on receipt."
Put it into practice
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