Balance Billing for Therapists: 5 Easy, Essential Rules
Balance billing means billing a client for the difference between what you charged and what the plan allowed, after the plan has paid. Whether you may do it depends on your contract and the rules that apply to the plan. Getting it wrong can breach a payer contract or confuse a client. This post gives five rules for solo therapists and psychiatrists.
See our balance billing glossary entry for the short definition. This is operational guidance, not legal advice. Confirm with counsel where the exposure is real.
Rule 1: In network, your contract usually limits what you can bill the client
When you are in network, the contract generally sets the allowed amount and says what you can collect from the client, which is the deductible, copay or coinsurance. The rest of the difference is a contractual write-off. Read your contract and the provider manual before you bill a client for any balance. See allowed amount terms and allowed amount in therapy billing.
Rule 2: Know the client’s share before you bill it
The client owes the deductible, copay or coinsurance as shown on the explanation of benefits. Bill that amount, not the full gap. Check it against your patient benefit verification record.
Rule 3: Out-of-network balance billing depends on the rules that apply
If you are out of network, the plan may pay little or nothing, and the client may owe more. Whether you can bill the difference depends on your agreement with the client, the type of plan and the law in your state. Rules vary by state and plan, so confirm before you bill. Our guide to out-of-network billing for therapists and in-network vs out-of-network credentialing explain the difference.
Rule 4: Federal surprise billing rules apply in certain cases
The federal No Surprises Act protects patients from some surprise bills. It does not cover every setting, so do not assume it applies or does not apply to your visits. Read CMS’s overview on No Surprise Billing and our No Surprises Act glossary entry, and ask your counsel how it applies to your practice.
Rule 5: Tell clients in writing, before the first visit
Put your fee, your payment policy and what the client owes when insurance pays less in a signed form. Clear policies prevent disputes. When a payer underpays or denies, work the claim first. See who follows up on denied claims and superbill vs billing service.
How a billing service helps
A billing service posts each payment, separates the write-off from the client’s share and sends accurate statements. Read what a billing service does for a therapy practice and how therapists pay their billing service.
Frequently asked questions
What is balance billing?
It is billing a client for the difference between your charge and the amount the plan allowed after the plan pays.
Can I balance bill an in-network client?
Usually your payer contract limits it to the client’s deductible, copay or coinsurance. Read your contract and provider manual.
Does the No Surprises Act apply to therapy visits?
It applies in certain settings and not in others. Confirm how it applies to your practice with counsel or a compliance officer.
Can MCM South send client statements?
MCM South posts payments and can help you separate the write-off from the client’s share. Ask for a free quote for details.
Where MCM South works
MCM South Medical Billing Service, LLC works with psychotherapists and psychiatrists in our ten currently served states: Georgia, Massachusetts, Connecticut, Texas, Florida, New York, Colorado, Tennessee, North Carolina and Illinois. We serve solo and medium-size practices that bill mental and behavioral health. Founder Michael Williams has worked with insurance payers in all 50 states. Browse the state and regional billing guides for rules that vary by state, or see our billing services.
This post is operational guidance for billing, not legal advice. Rules change, so confirm with the payer or your counsel.
