What does it mean to "balance bill" a customer?

When a customer is "balance billed," it refers specifically to the practice of billing them for the remaining amount owed after any insurance reimbursement has been deducted. This typically occurs in scenarios where a healthcare provider or service provider has already received payment from an insurance company but finds that the payment does not cover the full charges for the service rendered. The provider then seeks payment from the customer for the balance that remains unpaid.

In this context, balance billing can sometimes lead to confusion or disputes, especially if the customer is unaware that they are responsible for paying the remaining balance. Understanding the nuances of balance billing is essential for accounts receivable practitioners, as it directly affects customer relations and revenue cycle management.

The other choices do not accurately define the term. Issuing refunds to customers relates to returning excess payments, consolidating invoices pertains to simplifying billing statements, and offering a payment plan involves setting up terms for payment over time. Each of these options serves a different function and does not reflect the specific action of balance billing.