Is balance billing legal in Arizona?

Answer 1

"Balance billing" is the practice whereby medical providers attempt to recover or "recapture" the difference between the "customary" amounts charged for medical services and the more frequent lesser or discounted amounts received through agreements or contracts with medical insurance providers for the same services. Whether it is legal in Arizona has more than one answer and turns on the facts of the case at hand, such as the insurance provider and the medical lien holder. Arizona has a medical lien statute that provides significant preference to hospitals, including enlarged time periods to file and record the medical lien. In addition, court rulings have also afforded the hospitals priority recognition of the medical liens even where the medical liens filed by hospitals have not been properly recorded at all.

Andrews v. Samaritan Health, an Arizona appeals case, holds that hospitals can seek to recapture the difference between the agreed-upon, contracted-for price for services and the "customary" amount charged by the hospital. Note that the case amplifies that the balance, or difference between the lower insurance rate and the retail amount or price is a non-recourse debt or claim, meaning the hospital cannot seek to recover the balance (hence, "balance billing") directly from the patient. The hospital can perfect its lien and seek recovery for the entire balance amount if the patient was injured by a third-party, i.e., car accident or other personal injury, and the patient recovers a settlement or civil judgment against the tortfeasor (the bad guy).

Unless Medicare/Medicaid provided the insurance for the injured patient. An Arizona district court decision issued a year or two after the Andrews decision found that the federal statutes and regulations pre-empted Arizona's medical lien statute where Medicare/Medicaid was involved and held that no balance billing was permissible under those circumstances. See Lizer v. Eagle Air.

Most agree with the apparent fact that, in actuality, the "customary" amount charged by the hospitals is more likely a discounted, insurance rate than the retail rate for folks with no insurance before their cash "discount" is applied. At least it would be if frequency or prevalence of the amounts charged were used as the measure. It appears the Legislature and the courts in Arizona have constructively defined "customary" under the statute and the statute's application to mean the highest retail amount they could recover from a solvent patient that is private pay with no insurance.

Answer 2

Yes, balance billing is legal in Arizona. However, there are certain restrictions and regulations in place to protect consumers from excessive charges in certain situations, such as emergencies or when they have no choice of provider. It's important to check your specific insurance plan and understand your rights regarding balance billing in Arizona.