Balance billing occurs when the cost that a dental office wants to charge (the UC) is higher than the maximum amount that the insurance company considers reasonable for that service (the UCR). Below you can see an illustration of how this dilemma may play out for a patient if balance billing is allowed by the plan.
Example:
The UC is $130, but the UCR is only $100. The dental plan stipulates that the insurance company always pays 80% of the URC for this service, and the patient pays the last 20% (coinsurance). Therefore, the insurer pays the dental office $80. The patient must pay the remaining $20 of the URC, plus the difference between the dental office’s UC charge and the URC.
$130 UC – $100 URC = $30 still owed to the dental office.
The leftover amount is billed to the patient, and this practice is called balance billing. In this example, that means that the patient’s total financial liability = $20 coinsurance on the URC + $30 for the balance bill = $50 total.