Can a Patient Be Billed for Non-Covered Services?

When a health insurance company determines that a medical service is not covered under a patient’s plan, the question arises of who is responsible for paying the provider for that service. In some cases, the provider can bill the patient directly for non-covered services. However, there are important limitations and regulations regarding when and how patients can be billed for uncovered care.

What are Non-Covered Services?

Non-covered services refer to any medical services, tests, procedures, or items that are not included under a patient’s health insurance policy. There are two main categories of non-covered services:

• Services considered never covered or excluded by the insurer. Examples are cosmetic procedures, experimental treatments, over-the-counter medications, etc.

• Services that would be covered, but are denied for not meeting medical necessity criteria, utilization guidelines, or coding/billing protocols in specific cases.

Insurers maintain lists of general exclusions in their coverage policies. They also issue determinations on whether specific services meet coverage rules for individual patients and conditions through prior authorizations and claims adjudication processes.

When Can Providers Bill Patients for Non-Covered Services?

The rules on balance billing patients for non-covered services depend on several factors:

• Type of non-covered service
• Type of health insurance (Medicare, Medicaid, commercial insurance)
• State regulations on billing uncovered services
• Provider contracts with insurance companies

Some general guidelines apply:

• Services never covered: Patients may be billed without getting prior consent.

• Services denied for medical necessity: Medicare patients must sign an Advance Beneficiary Notice (ABN) to be billed. Rules vary for other insurers.

• Out-of-network services: Depends on insurance and provider contracts. Balance billing may or may not be allowed.

• Medicare supplemental plans: Providers cannot balance bill the patient.

Bottom line: Balance billing permissions depend on the service, payer, contracts, and state laws. Blanket policies are difficult, so providers should verify rules with each case.

Billing for Services Excluded by Insurance

Every health insurance policy contains general exclusions – services that they never cover. Common examples include:

• Cosmetic plastic surgery

• Experimental or investigational treatments

• Hearing aids

• Eye care and vision therapy

• Long-term custodial care

• Over-the-counter medications

• Infertility treatment

• Obesity treatment

• Complementary alternative medicine

For services universally excluded by their insurance, patients may be billed directly without obtaining any prior notification or consent. However, providers should still inform patients that their plan does not cover the service and that they will be responsible for the charges. This helps avoid billing misunderstandings.

Billing for Non-Medically Necessary Services

In some cases, a medical service would typically be covered, but is denied by the patient’s insurer for not meeting established medical necessity criteria for that individual. For example:

• Frequency limitations have been exceeded

• Service is deemed experimental/investigational for the condition

• Diagnosis code used does not justify coverage

• Practice guidelines or insurer protocols were not followed

Medicare and Medicaid have strict rules prohibiting providers from billing patients when services are denied for medical necessity under their coverage rules. For Medicare patients, providers must have the patient sign an Advance Beneficiary Notice (ABN) before rendering service in order to bill the patient.

Rules for commercial insurance coverage varies by state laws and insurer policies. Some plans prohibit balance billing for medically unnecessary services. Others allow it provided the patient consented to the service knowing insurance would not cover it.

Balance Billing with Out-of-Network Providers

Restrictions on billing for uncovered services also depends on provider network status. Many plans prohibit out-of-network providers from billing patients for charges beyond the allowed amount paid by insurance.

However, out-of-network providers are not obligated to accept the insurer’s allowed amount as full payment. The provider can still bill the patient for the balance of their full charges, unless prohibited by state law or provider contracts.

Special Rules for Medicare Supplemental Plans

Importantly, providers who accept Medicare assignment are prohibited from balance billing patients for covered services, even if they also have a secondary Medicare Supplemental policy. By accepting assignment, you agree to accept Medicare’s allowed charge as full payment.

Medicare Supplemental plans pay toward Medicare’s cost-sharing, but do not allow providers to bill for additional out-of-pocket costs beyond the Medicare allowable. Make sure your billing staff understand these billing restrictions.

Steps to Bill Patients for Non-Covered Services

When permitted, providers should take care in how they bill patients for non-covered services to avoid problems. Follow these best practices:

• Inform the patient their plan does not cover the service and they will be billed before providing the service.

• Have the patient sign a consent form acknowledging financial responsibility.

• Append modifiers like -GY and -GZ to claims to designate non-covered services.

• Send bills clearly stating “This is not covered by your insurance”.

• Offer payment plans for large bills and avoid sending to collections prematurely.

Medicare ABNs for Non-Covered Services

For traditional Medicare patients, providers must have them sign an Advance Beneficiary Notice (ABN) to bill for non-covered care. Key steps include:

• Fill out ABN with description of the service.

• Indicate the estimated cost and reason Medicare may not cover it.

• Have the patient sign the ABN prior to delivering the service.

• Attach modifier -GA to the claim to signal an ABN was issued.

Make sure your clinical staff is educated on correct ABN use so your Medicare claims and billing comply with rules.

exceptions to balance billing restrictions

While balance billing limits apply in many situations, there are some exceptions. Instances where providers may still bill patients include:

• Non-covered routine vision and dental services

• Patients who sign an ABN for services that Medicare denies

• Patients who electively choose uncovered services (e.g. cosmetic surgery)

• Services billed by out-of-network providers, if allowed by state law

• Covered services during coordination of benefits periods

• Covered services rendered under a private contract with patient

But again, blanket policies are difficult. Verify billing rules for every payer and service arrangement.

Key Takeaways on Billing for Non-Covered Services

• Patients may be billed directly for services universally excluded by their insurance without consent.

• Medicare does not allow providers to bill patients for services denied as medically unnecessary unless they signed an ABN first.

• Rules vary by payer for billing patients for services deemed not medically necessary.

• Out-of-network providers may balance bill patients depending on contracts and state law.

• Never bill Medicare patients who have secondary supplemental coverage – accept Medicare assignment as payment in full.

• Always inform patients in advance if they will incur out-of-pocket charges before delivering uncovered services.

The best approach is to verify coverage details for every patient and service to avoid non-payment issues or violations of billing regulations. Make sure your team understands the nuances around billing for non-covered services.