Obscene medical bills are just insult to injury when you’ve already paid a lot of money to fix the injury. After this pod, you’ll be able to handle medical invoices with more confidence.
You’re not the only person who might have a major doctor or hospital bill. Data from a previous review by the Survey of Income and Program Participation suggest that 9% of Americans in 2019 owed “significant” medical debt. In this case, significant was defined as $250 or more. Of those 28-29 million adults who owe that much, 53% owe between $1001 and $10000 in healthcare debt and 13% owe more than $10000. Even wilder, those owing $10000+ are estimated to take up 71% of everyone’s personal medical debt—the survey estimates the grand total to be ~$195B. It’s no surprise that such balances are considered a leading cause of personal bankruptcy. All it takes is a hospital stay, a few procedures, or even a math error, to run up a five- or six-figure tab. Even if you are paying little bits of an invoice, your medical bill can still be sent to collections which obliterates your credit. This is why I want to go over what to do when you get a fat healthcare-related invoice in the mail or on your phone so you can rise above panic.
Knowing the lingo is a great place to start. Let’s say you have a simple hand X-ray and the final bill is $1000. Before anything else, you should check if you have a matching explanation of benefits, or EOB. I covered them in a previous episode but EOBs show a full breakdown of the services you had, what the doctor charged, what your insurance paid (or didn’t pay), and what you owe. If you lay an EOB next to an itemized statement, you can make sure that a hand X-ray actually happened as well as check if dates and dollars match up. You are within your rights to request an itemized statement with all the charges and diagnosis codes from whatever facility you go to. Now you can look for duplicate items, unrecognized services, unperformed services, and charges that should fall within your insurance coverage. In reality you might have gotten a hand X-ray last Thursday but the EOB lining up with that date might say you had an MRI instead. I know that’s an obscure example but all it takes is one incorrect digit of a billing code to throw everything off. With regard to hospital bills, you could reach their billing department then ask if you qualify for charity care or financial assistance and follow-up with verifying if you were billed the “chargemaster rate,” which a service’s full cost before insurance discounts. Having these documents ready while talking with a billing representative or advocate in a polite manner goes a long way to getting a resolution for a discount or (in rare cases) forgiveness. There are two major umbrellas of problems when it comes to a medical bill—on the provider’s side, the bill could have clerical errors or, on the insurance plan’s side, the charged amounts are correct but your insurance coverage is faulty. In any case, you should act fast when you get a hefty medical bill—if you ponder it too long then your balance might go to collections which makes this whole process troublesome. Even then, medical bills should be lower on the priority list than essentials like rent, mortgages, and credit card bills because credit reports aren’t as strict about having healthcare debt on the record. Given how complex our medical system is, you could hire a billing advocate or a lawyer to navigate an invoice problem in exchange for a cut of however much you save with their help. Engaging a professional makes sense when you have a lot of varying medical work done like complex visits, labs, and procedures in a brief span of time.
However, you as a patient can still approach payment disputes with smart negotiation and prepare to find solutions to a serious bill. For now, we’ll focus on how to deal with the provider’s side of things to make sure you owe the correct amount to begin with. Besides securing your EOB fast to compare that against your bill, there are some general items you should track at every step. Keep dates, times, and reference numbers for any phone call related to a bill. In writing, document who you speak with, what you talk about, and what commitments or timelines are promised. If you’re doing snail mail, get any letters certified. Get clarification on when the bill due date is and when bills may be sent to collections because such deadlines may not match. Each billing department of a hospital or clinic would have a different process for disputes but you can use a website like healthcarebluebook.com to better negotiate common prices for services. I’ll link healthcare bluebook and my other sources on this Substack post at rushinagalla.substack.com. Just make sure to avoid medical bill purgatory—this awful place is where customer service puts in a request to their billing team to get back to you someday, meaning never, or if all or part of your bill gets put on hold, which is forever. Make sure to get a timeline for when you should hear back from the billing staff to make follow ups easier. Let’s circle back to our $1000 hand X-ray. There are ways to negotiate that down. You could make a hyper-aggressive move by saying to the provider’s staff that you are willing to pay $500 right now if the remainder gets written off as well. While it might sound crazy for hospitals to take a 50% haircut, the time saved on their part for hassling you to pay the whole thing is surprisingly valuable. If you happen to have a commercial insurance plan, you could also request to be billed at lower Medicare or Medicaid rates in exchange for paying 10%-20% down now. The safest approach is to say that you’ll pay $100 per month for ten months without interest. Most providers are willing to take a payment plan if they have reasonable assurance that you’ll take care of the full balance. No matter what you do, get any of those agreements in writing.
If you do in fact owe $1000 for that X-ray, the provider could be in the right but your insurance coverage may have fallen short. Most insurance payment denials or reduced benefits happen when you get something that’s not covered under your plan, a service that insurers believe are not medically necessary, or when you are no longer eligible with a health plan due to coverage or employment changes. If you call your insurance company or check their website, you should be directed to forms that let you submit an internal appeal. If you saved all your EOBs, statements, and provider billing correspondence, send those as well to help your case. Remember to keep any copies of whatever you send to the insurance. You might get your bill reduced if the internal appeal goes your way. If you get a denial, you can send an external appeal for the insurance to use an independent third party, usually a physician, to review your situation. The decision of an external appeal is usually final. Even though many steps are involved here, your billing journey will be easier as long as you document your conversations and itemized statements. You can also visit the website localhelp.healthcare.gov to have someone assist with appeals. There are other methods out there for escalating medical debt appeals but at that point you may benefit more from having a lawyer or billing advocate take care of the issue.
No matter what, my take-home message to you should be that it’s better to first make sure that you were billed correctly, then make adjustments as needed rather than get tunnel vision for dodging the debt. If you provide enough evidence for your case and you treat billing or insurance staff well, then you’ll get a better resolution to a medical debt issue. Now you know that a healthcare bill is something that you can revisit, review, and change with time. Medical opinions can also be the same way. There will come a time when you go to the doctor and you don’t get a clear assessment. That’s why the next pod is going to shed light on when you should get a second opinion and what to do if you don’t have a straightforward diagnosis. Subscribe and stay tuned to Friendly Neighborhood Patient for more healthcare tips and trends. I’ll catch you at the next episode.
