7 ways to avoid unexpected medical bills

NEED TO KNOW
  • Health care costs can vary by thousands of dollars within the same network
  • Find out how to protect yourself from unexpected medical bills
7 ways to avoid unexpected medical bills

Have you ever left the hospital or doctor’s office with a really good understanding of what you just paid for and why you paid that much? A lot of people would say no, and that’s a big problem.

Most Americans would be very surprised to find out just how much health care costs can vary, even within the same network. What you pay may have absolutely nothing to do with the quality of the service provided, and it’s possible you could have gotten the same service for 90% less than what you paid, but no one told you how. That seems fair, right?

According to a new report by Consumer Reports, the cost of health care is often determined by the bargaining power of providers and how much influence they have in the market. You may pay $400 for a procedure at a prestigious university hospital, but only $80 for the exact same procedure at a local medical practice.

“It’s as if some employees went out to fill up the company cars and half came back with receipts for $4-a-gallon gas, the rest for $20 a gallon, and no one asked why,” Jeffrey Rice, chief executive officer of Healthcare Blue Book, told Consumer Reports.

The problem is you can’t just go wherever the service is cheaper, because in most cases it’s very difficult -- if not impossible -- to find out the price of health care ahead of time, especially when it comes to big procedures like surgery.

Let’s say you have a high-deductible plan, so you may be responsible for the first $10,000 of your health expenses every year. You have surgery that ends up costing $25,000. That would put a lot of people in a sticky situation. And if the procedure was done outside of your plan’s network, you could end up with an even bigger bill, while the insurance company stands by, obligated to pay nothing.

But HLN Money Expert Clark Howard says there are ways to protect yourself as a patient. And Consumer Reports also points out some things consumers can do to avoid being blindsided by big medical bills. They aren’t always easy and they don’t always work, but you should always try.

Understand your health insurance

Knowing the rules and cost-sharing features of your personal health care plan can help you better understand what and why you’re paying for services. Consumer Reports suggests finding out: How much is the deductible? What out-of-pocket costs apply toward it? Is there an extra co-pay for a visit to the emergency room? Are there certain tests and procedures that require advance approval? Does the plan allow you to go out of network for anything? This can get tricky and most often the only reason an HMO allows you to go out of network is in the case of an emergency when you’re outside your plan’s service area, or for the treatment of a rare condition.

Stay in network (whenever possible)

Network providers have already agreed to negotiated prices that are considered payment in full. If you haven’t met your deductible, then you’ll still only pay that in-network price. If you have met it, then the only cost you’re responsible for is either a co-pay or co-insurance. When plans do pay for out-of-network care, there’s often an already-set percentage they agree to pay, which may be around 60% or 70%. But this coverage is often misleading and misunderstood. That coverage is not a percentage of what the out-of-network provider charges, but a percentage of a pre-determined amount that’s often referred to as the “usual, customary, and reasonable” price. That price can be much lower than the bill that comes in from the out-of-network provider, and then you’re stuck with very little help from your health plan.

Compare network prices

Many health plans now post price information online, so you can see what certain procedures and services will cost ahead of time, and whether the price varies at different providers. If you can’t find the information you want online, call your provider and see if you can get a cost estimate. This can be very helpful, especially when it comes to big procedures. For example, Healthcare Blue Book’s Rice told Consumer Reports that when his son needed outpatient foot surgery, the hospital told him it would cost between $15,000 and $25,000. Rice’s son had the surgery at an outpatient center, with the same surgeon, for $1,515.

Don’t pay until all bills are in

You may get a bill from a hospital, or other medical provider, for a lot of unexpected and high charges. Don’t just pay it immediately. Those charges are often much higher than the network prices you actually owe, so wait until you get the explanation of benefit (EOB) forms from your health-care provider, which will lay out exactly what you’re responsible for.

Fight out-of-network bills

A lot of people will get a surprise bill in the mail from a non-network doctor after a big procedure like surgery or an emergency room visit to a network hospital. The hospital may not even know which plan a doctor has negotiated a contract with, and you get stuck with their bill. Clark is a big supporter of the idea that if you fight hard enough, you may be able to get that bill reduced. First, go straight to that doctor and ask for the fee to be reduced. If that doesn’t work, Clark suggests going to the hospital’s patient advocate. Calling the billing department at the hospital is usually a dead end, but this hospital representative will try to work with you. Consumer Reports also suggests complaining to your insurer, your employer, and your state insurance department or state insurance consumer advocate. The more people you get on your side, the better chance you’ll have at getting the bill reduced.

Negotiate in advance

In some cases, there are ways to get out-of-network care without draining your savings account. First, look up the “fair” price in your geographical area for the test, procedure or other service on FairHealthConsumer.org and HealthCareBlueBook.com. Fair Health also has a tool that shows what your reimbursement would be if your plan pays a percentage of Medicare’s fee schedule for out-of-network services, so you could end up paying less than the price listed. Once you figure out what’s considered a fair price for the procedure or service you need, you can then negotiate with the out-of-network provider ahead of time and know exactly what your total cost will be. If you don’t agree on a price in advance, you could end up liable for a huge balance that the insurance company won’t be obligated to pay. And get the agreement in writing! Healthcare Blue Book has a printable contract on its site.

Prepare for complex out-of-network procedures

Preparing for a big out-of-network procedure isn’t easy, but if you do your homework, you may avoid a life-changing medical bill. If you can’t find the standard fair price for the surgery or procedure online, ask the out-of-network provider for the CPT codes (standard medical billing codes) for all of the services you will need. Also get the provider’s tax identification number, as well as the ZIP code of where all services will be performed. Once you have this information, you’ll be able to find out some prices and negotiate with the provider, according to Jennifer Jaff, executive director of the nonprofit group Advocacy for Patients with Chronic Illness.

“Call the insurance company with this information, and they are absolutely obligated to tell you what they will pay,” Jaff said.  “This is not information they’re going to have at their fingertips. Chances are it’s going to take days.”

So if you do your research, with a little patience you may be able to avoid getting hit with medical bills that could turn out to be life-changing.

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