CBS News outlined strategies to pay off large, unexpected medical bills. The article is rather simplistic but has some valuable points. The first piece of advice is good, but it is in the wrong order (more on what should come first below).
Appeal denied insurance claims. All insurers have an appeal process, which you should learn about and use if you’re saddled with a large bill after an insurance claim is denied. Here is what CBS News had to say:
If your insurer doesn’t want to pay for treatment you received and has denied coverage of a procedure, find out why.“It’s important to understand the reason for denial,” Braden Pan, founder and CEO of Resolve, a company that helps patients save money on medical bills, told CBS MoneyWatch. “We see claims denied all the time for stupid things, like a patient’s middle initial was wrong, or their birth date was wrong so the insurance company denied coverage,” he said.
Do not pay the sticker price. Hospitals have different prices for different customers. There is the list price, called the chargemaster. The chargemaster is inflated to make health plans’ negotiated discounts look bigger. Patients who are uninsured and those who accidentally go out of network are often asked to pay the highest, “chargemaster” price. There is a cash price charged for care that has already been provided. The cash price after-the-fact is often the list price. There is also a lower discounted cash price for patients who negotiate in advance. Finally, there are much lower prices for health plans and Medicare. If you are forced to negotiate your bill, make sure you are negotiating a realistic price closer to what insurance companies pay. Most health plans pay less than 50% of the list price, often closer to one-third. More from CBS News:
“A lot of times, medical providers’ prices are wacky,” Howard Dvorkin, a certified public accountant and chairman of Debt.com, told CBS MoneyWatch.Dvorkin recalls receiving a bill for a medical incident that required his daughter to be airlifted for treatment. The initial total? $18,000.He asked the treatment provider what rate they would have billed his insurance company and said: “That’s the rate I’ll pay.”He ended up paying about $5,000, he recalled. “Every provider has the flexibility to reduce rates,” he said.
Make consistent payments, avoid credit cards. Another good piece of advice is to avoid using your credit card unless you absolutely cannot avoid it. Also, pay something every month and be consistent. When hospitals write off bad debts, they often sell them for pennies on the dollar. If an indebted patient is paying something towards their bill every month it makes more sense for the hospital to hold onto the debt.
Hospitals are easier to work with than debt collectors. More from CBS News:
Large medical providers like hospitals, in particular, will often take what you give them, according to Dvorkin. Pay what you can afford on a monthly basis, and it will be applied to your balance.“As long as you continually pay something, they usually won’t turn it back,” he said. “If you owe $1,000 and you can only afford $25 a month, guess what, they’re going to take it.”
It is also important to note that some states provide more consumer protections for medical debts than for credit card debt. For example, Arizona caps the interest rate that can be charged for medical debt. Once the debt has been transferred to a credit card, no such protection exists.
Hardship programs. Ask about hospital indigent care programs.
All nonprofit hospitals in the U.S. are supposed to offer financial assistance programs to help patients who cannot afford to pay for their care, according to Kelmar.Ask your provider if you are eligible for a discounted care program, Dvorkin advised.
Finally, a point that should have been Point No. 1 but was not in the CBS News checklist.
An ounce of prevention is worth a pound of cure. It is better to avoid problems than mitigate them after they occur. Make sure the hospital and doctors are in-network. Let your doctor know you are price sensitive. Do not be afraid to question why you need a recommended service. Do not be afraid to ask why you cannot wait and see if the condition gets better. Do not be afraid to ask if there is not a cheap generic drug that you might try first before jumping to the expensive name brand drug. Know that prices vary from one facility to another, and a hospital is the most expensive place to have anything done. Avoid hospitals unless you cannot go anywhere else. A diagnostic image that costs thousands of dollars at a hospital is often only a few hundred dollars at a free-standing radiology clinic. The same is true of lab results.
Read more at CBS News: Stuck with a big medical bill? Here’s how to pay it off.
Thanks for an excellent article.
My own preference would have hospitals funded by government,, no different than the fire department or the police deparatment………at least for emergency care. On this one issue, I do not think that free enterprise can solve it.
However, doing so would put hundreds of billions of dollars onto the government’s books, so it will not happen all at once.
The Affordable Care Act chipped away a little on this problem, in its typically timid way. I forget the exact details, but what I remember is that non-profit hospitals had to give their insurance-company rates to patients with no insurance and low incomes. Not all hospitals have even complied, and no one is enforcing.
One point to remember is that in general, Americans do not like to negotiate all the prices in their daily life. We are used to the Walmart approach, where every single price is posted and no one has to haggle at the cash register.
A friend of mine moved to Israel, and was appalled at how much haggling he had to do in daily life. The electrician’s rates, etc., were up for grabs on every job.
The idea that a person in a medical emergency should have to negotiate prices is and always has been repulsive to me.
I grant that not every patient in a hospital is undergoing an emergency. My own viewpoint may be colored by my own history. I have undergone 3 major surgeries in the last decade. I sure as heck did not meet many fellow patients who were in the hospital for discretionary care.