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How to dispute a medical bill? Steps on how to win

Khang T. Vuong12 Aug 2020

According to an article published in JAMA in February 2020:

  1. More than half of Americans have received a surprise medical bill.
  2. The average size of a surprise bill is $600, but the total could be much greater if you spend one or nights in the hospital. 
  3. Among surprise charges, the top categories are physical services (53%), lab tests (51%), hospital facility charge (43%),  imaging (35%) and prescription drugs (29%).
  4. Having insurance doesn't mean you‚re always protected, one in five insured adults had a surprise medical bill in the past two years
  5. One in five ER visits resulted in a surprise medical bill, making the ER one of the top sources of medical debts in America.

Why do surprise bills exist?

Healthcare is undeniably complex, and so is its' pricing. Insurance design has become so complex that even healthcare experts have become the victims of surprise billings

There are multiple factors in play when it comes to how much a visit to your doctor office or hospital stay will cost. The two most common reasons surprise bills exist are claim denials and out-of-network providers. 

First, there are multiple pricing tiers, starting with the chargemaster, the ‚Äúfull price‚Äù hospitals or doctors charge. Insurance companies often negotiate a percentage of charge which is called the reimbursement rate. As a member of an insurance plan, you are responsible to pay a portion of that amount (the co-pay) or the full amount (if you haven‚t hit your deductible or out of pocket maximum).

The multiple tiers of pricing in healthcare make it confusing for the average person

I have insurance, why do I still get billed?

Even though you could purchase insurance to protect yourself against adverse health events, there are two common scenarios that explain why you get the bill: insurance companies can deny a claim submitted by the hospital or determine that the hospital is out of your network. In both cases, you are responsible to foot the entire bill. 

If the claim is denied, you are usually responsible for the entire negotiated amount. If it is an out-of-network hospital, you may have to pay the full price. 

What If I don‚t have insurance?

Insurance companies function as your ‚Äúguardian angels‚Äù when it comes to healthcare billing. But this is not always the case, sometimes, you are still being billed for services. In fact, one in 5 insured U.S. adults had received a surprise bill in the past two years. 

Not having insurance doesn‚t mean you are at a dead-end when it comes to receiving a medical bill more than you can afford. More often than not, there are publicly available resources and charity programs sponsored by the hospitals to help you pay the bill. 

How to avoid getting surprise bills?

The best way to not have to deal with surprise billing is to be aware of preventative measures. Here are some tips you can follow to avoid getting an unpleasant bill from your doctor:

  1. Read and understand your health insurance policy. Insurance has limitations and it does not cover everything. Read this article.
  2. For non-life-threatening conditions, urgent care and retail clinics are much better options. The emergency room is the most expensive place you can go for basic conditions like UTI, flu, and even minor injuries. 
  3. Always ask for a receipt after each visit to make sure you have the final amount on record. 
  4. If you don‚t have insurance or have a high deductible health plan, Mira could be a great option for you to get guaranteed prices for preventive, urgent care, and lab tests.

I just received a surprise medical bill, what do I do next?

How to dispute a medical bill:

1. Contact the revenue cycle (billing department) for an itemized bill

Things can happen very fast and in a blur at the hospital, as a patient, you may not be aware of everything that was done. One way to make sure is to contact the billing department and ask for a bill with ‚Äúthe lowest level CPT and MS-DRG codes‚Äù. CPT and DRG codes are unique identifiers assigned for each procedure and diagnosis. 

2. Make sure all procedures are coded accurately

Hospitals are reimbursed differently depending on the diagnosis and procedures done. For example, an episode of sepsis (infection) could cost 5 times as much if you were put on a mechanical ventilator (W MV) compared to one without any major complication or comorbidity (MCC). You can request a review of the codes with your attending physician or get a second opinion to make sure all codes are accurate.

3. Check if there were any denials from the insurance

You can also request an “explanation of benefits” statement from the insurance and see what is the total allowed (covered) amount and the amount not covered. Determine what was not covered and cross-check with your insurance policy to see if they are correct. You can contact your insurance and ask to file an appeal form should you think there are mistakes made in the process.

4. If you don‚t have insurance and are low-income, Medicaid could cover you retrospectively, but apply ASAP.

If you make less than $20,000, depending on the State, you could be eligible for government-funded Medicaid plans. In most states, Medicaid will cover you retrospectively up to 90 days for unpaid medical bills from the application date.

5. Try to negotiate.

This is perhaps the trickiest part if everything is checked out and you indeed are responsible for the amount. It is not the end of the road, you can still call the hospital‚s revenue cycle or billing department (it may take several phone calls to reach them) and see if there is a discount or payment plan.

Most not-for-profit hospitals are required to provide charity care (free care) in exchange for tax-exempt status, these programs often require you to show financial proof and evidence that you‚re not eligible for any government-assisted programs. Try to research and get in contact with someone who is responsible for the ‚Äúcharity care program‚Äù.

6. Set up a payment plan

Almost all healthcare providers allow you to set up a plan for monthly payments with or without interest. The billing department can also help you do this.

7. Do not delay, occasionally hospitals sue for unpaid bills:

Make sure you check the hospital lawsuit record to make sure you are not on the hook for a potential lawsuit.

8. Get help from an external organization:

Various organizations like debt.org and MetisAdvocacy that can help you review and dispute your hospital bills.

References:

https://www.modernhealthcare.com/article/20180830/TRANSFORMATION01/180839993/more-than-half-of-americans-have-received-a-surprise-medical-bill

https://jamanetwork.com/journals/jama/fullarticle/2760721

https://www.norc.org/PDFs/Health%20Care%20Surveys/Surprise%20Bills%20Survey%20August%202018%20Topline.pdf

https://www.healthaffairs.org/do/10.1377/hblog20190808.585050/full/

https://www.nejm.org/doi/full/10.1056/NEJMp1608571

https://www.icd10monitor.com/understanding-sepsis-an-example-of-the-convergence-of-clinical-quality-coding-reimbursement-and-audit

https://www1.nyc.gov/site/ochia/coverage-care/medicaid.page

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