Surprise bills are an unfortunate reality for many health care consumers today.

A reader recently contacted me to talk about a recent office visit he’d made to his doctor. The physician was in his insurance company’s network, so he paid his co-pay, received his treatment, and went on his way thinking all was well and good.

Some weeks later an explanation of benefits (EOB) arrived from the insurance company, outlining the amount the doctor charged for his visit, as well as the amount the insurance company reimbursed the doctor.

As is commonly the case, the EOB showed a discrepancy between what the doctor charged and what she was actually paid by insurance. The patient thought nothing of the discrepancy. After all, doctors routinely bill more than what insurers pay.

Another week went by and the man then received a bill from his doctor for the difference between the amount she believed she should be paid and the amount reimbursed by the insurance company. He called his doctor to protest, but the office staff was insistent. According to them, he owed them more money.

“What’s going on?” he asked.

Balance billing

Balance billing at its purest, simplest form; that’s what’s going on. And, to be sure, it goes on frequently and takes many forms: Unforeseen charges following an emergency room visit, gaps in coverage for an office visit, and I’ve previously written in this column about consumers getting stuck with bills following surgery at an in-network hospital because during their stay they were treated by providers - anesthesiologists, radiologists and pathologists - who were not contracted with their insurance company.

Behind the scenes

Balance billing, simply put, is the practice of billing patients (unfairly) for all charges not paid by the patient’s insurance plan, even if the charges go beyond what is considered usual and customary. The patient is placed in the middle between the insurer and provider and handed the financial burden for unpaid charges, when in fact, the conflict rests between the doctor or hospital and the insurer.

According to a study conducted by the California Association of Health Plans in 2007, more than 1.76 million insured people in California who visited emergency rooms over the previous two-year period were balance billed, resulting in charges of $528 million. The practice takes place throughout the country, costing health care consumers millions of dollars each year.

What you should know

Increasingly, state regulators are coming down hard on providers who balance bill, with many working on legislation that would outlaw the practice. In California, the Department of Managed Health Care set a new regulation, which bans health care providers from balance billing patients.