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A Guide to Negotiating Medical Bills

Sept. 3, 2014
Health, Managing Medical Bills
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Did you know that negotiating your medical bills could potentially save you thousands?

When you open a medical bill, your eyes likely immediately fall on the total due. For many consumers, that’s the full extent of their medical bill reading — eyeing what they owe and resigning themselves to the budgeting necessary to get it paid.

But with one in five Americans struggling with medical bills and as many as 80% of medical bills containing errors, it pays to know what you’re looking at and how to possibly negotiate a lower balance.

How to decipher medical bills

The details contained within your medical bill depend on your medical provider. Generally, they include the date of service, a description of services and the charge for each service. Some will also include medical codes, referred to as CPT codes. These codes identify the procedures and tell the provider how much to charge. If any payments have been made, either by you or your health insurance provider, those will be included as well.

How to spot medical billing errors

Identifying medical bill errors could save you a significant amount of money. Start by looking for these common but costly errors.

  1. Check your dates of service.
  2. Look for duplicate charges.
  3. Make sure you aren’t charged for canceled appointments and procedures.
  4. Ensure your insurance information is accurate.
  5. If any charges seem far too high, investigate further.

Other medical billing errors are difficult to spot. Practices like upcoding, where a patient is charged for a more serious (and expensive) procedure or diagnosis, or unbundling, where procedures that should have been billed together under a single code are billed separately leading to higher charges, may not be immediately apparent to the untrained eye but could be detected by a medical bill advocate.

How to appeal a medical bill

When you appeal a medical bill, you are asserting to the medical provider or the insurance company that a mistake was made, whether in the denial of an insurance claim, or because of a coding error by your doctor’s office, for instance. As a first step, calling your medical provider to discuss errors can often resolve an overcharge or billing mistake.

If the problem lies with your insurance company, a phone call can help you understand why they denied your claim and is a good opportunity to ask about the formal appeals process. From that point, you can decide whether it’s worth the effort to go it alone or hire a professional to help. In some cases your medical provider will even help you appeal the denial.

If you decide to move forward with a formal appeal, ask your insurance company for a copy of the denial letter, a copy of your plan’s benefits and the specific reasons for the denial. As all insurance companies and plans are different, you’ll also need to ask for details on the appeals process and how to get started. Throughout, write everything down, including the names of anyone you talk to.

» MORE: Tips for appealing a denied health insurance claim

Evaluate your options for paying medical bills

If your bill is accurate, but you aren’t sure how to pay it, you have options. You can try to negotiate a discount with the medical provider. Often, doctors’ offices are willing to offer a discount for patients who are able to pay off their balance. If not, they will likely allow you to make payments rather than demanding one lump sum. Other options include:

  • Using money from a health savings account.
  • Asking the hospital about financial aid options for low-income patients.
  • Enlisting the help of a professional advocate to aid in negotiations.

If you’re stuck, hire a bill advocate to negotiate for you

Medical bill advocates are professionals who work to save patients money. They audit bills for errors, communicate directly with medical providers and insurance companies about costs and coverage denials and negotiate to lower bills overall. You can handle some of the medical bill negotiating process yourself, but there are certain situations where you definitely need a medical bill advocate. If you’ve tried negotiating with your doctor or insurance company and gotten nowhere, if you don’t understand your bills and the charges on them or if you are considering filing bankruptcy due to medical debt, an advocate could help.

» MORE: Patient advocates: Taking on the health care system

Health insurance photo via Shutterstock.