Balance billing, also known as surprise billing, occurs when a healthcare provider bills a patient for the difference between the total cost of services being charged and the amount the insurance pays. This can happen when a patient receives care from an out-of-network provider or visits a healthcare facility that is not in their health plans network. Balance billing can result in unexpected costs for patients, which can be significantly higher than in-network costs for the same service and might not count toward the patients plan deductible or out-of-pocket maximum.

While balance billing is usually legal when a patient chooses to use a healthcare provider that doesnt have a relationship or contract with their insurer, it can create unnecessary administrative costs and patient confusion. Critics argue that balance billing allows providers to raise charges through stealth rather than transparent pricing and allows providers to simply pass along costs to patients, rather than helping them to secure good value.

To protect patients from balance billing, the No Surprises Act was passed in 2020 and took effect in 2022. This federal legislation protects patients from surprise balance billing in certain circumstances, such as emergency services and certain services at in-network hospitals or ambulatory surgical centers. Some states, such as Connecticut, have also passed their own laws to address balance billing.