The Healthcare System: Part 3 :: Negotiating Medical Bills
Updated: Jan 27, 2020
Paying hospital bills in the States is serious business. So is getting you, the insured patients, to part with your money. Please don’t make the mistake of thinking insurance is COVERAGE. Plenty of people can attest to this fact. They had plenty of insurance but when crap it the fan, they had no coverage.
They fact is, if more people were educated and did their research, there would be no reason why average folks would have to lose their whole house to cover medical bills. These people have been jerked around by their insurance company and didn’t do any research beforehand.
Here are some good tips and tricks to getting to the money side of the stick. If you see your body as a machine and docs as mechanics, you would approach all this with a bit more caution, right?
At the end of this article, I have also included some great resources and additional articles to read. Listen, the more information, the better.
I have said this SO MANY TIMES to my clients and friends. You will most often get a better deal with cash. Insurance bills thousands of dollars for a full body MRI in a hospital. Do you know how much it is cash? 520 US dollars at a lab by my house in Los Angeles. Same with X-rays. 100-200 dollars will get you an x-ray in your hand to bring to whom ever you want to give it to. Using insurance would “require” you a referral, bill you a couple of hundred dollars, keep the x-ray until it is order to an in-network doc and hassle the folks at the X ray place when they ask for payment.
More proof? Check out this excerpt from SelfpayPatient.com
A recent article in the Los Angeles Times reported a CT scan of the abdomen costs about $2,400 for patients insured by Blue Shield of California, while the Los Alamitos (Calif.) Medical Center cash price is only $250. That is a 89% discount by my calculation.
Another local California hospital charges insured patients $415 for blood tests that cost only $95 in cash. This time it’s a mere 77% discount.
Don’t play the game, go around it.
Use Online Comparison Tools
When you become a part of a health share, you will have lots of experience with this. There are a host of tools to help you shop for price of a procedure. If you are overbilled, this will be you first line of defense is proving it. Hospital Cost Compare or HealthcareBlueBook will list the retail cost of procedures might be. Insurance companies will often have services and resources like these available to their customers.
Inquire about Codes and Costs Ahead of Time
Sometimes the codes will not match the procedure done. Offices are literally banking on you not knowing anything about healthcare mumbo-jumbo. You might get billed for name brand medicine instead of the generic one. You might be charged for Tylenol you refused. See the MONEY.com article for more info.
Make sure to ask you doctor for an estimate of what the procedure will cost. Then get a second opinion and get another quote. Don’t be shy, be vigilant.
Ask for itemized list
Remember what I said about duplicate billing or up charging right above? This is why you ask for a list. Go through it one by one and check if the code match and everything was done right. Few do this and you can save so much money by disputing charges.
Most procedure are supposed to be bundled under one code. But on the bill, they will separate them and charge them as separate procedures. Don’t let this happen.
Talk to the billing department directly
If something seems fishy, it might be. Go to the source. Be friendly and kind but do not be a push over. Standing your ground will get you far. You and the agent can go through this line by line and get things sorted. While you are there, you can ask about financial assistance, charity care programs and payment plans. If anything you can make it clear that you will not be pushed around and drained of resources
Ask for discounts for quick payment or settle on a sum payment after 2 years
If you have a savings you can probably negotiate the price of the procedure. Here’s the deal: Hospitals and doctors get taxed on their outstanding balance of collections. That means they are eager to get a bill settled and paid as soon as possible. If something cost 1000 bucks but you only have 750, chases are, they’ll take it.
Also, go in an ask for an interest-free payment plan. Ask for one that is the longest possible they can give. And MAKE PAYMENTS. If you are going though some hardship, let them know. Bills go into collection because they are NOT being paid. But bills that are being paid, even if its $1, will not go into collection.
Pay as much as you can for the allotted time and then negotiate paying a lump sum for the rest. Often they will take a lump sum to settle the debt. Payment plans always allow you to renegotiate cost down the road.
Charity care programs are available, so is financial aid - then ask about discounts
You maybe like, “What!? Discounts!?” Oh yes. Did you know if you pay by phone, you can often get a 10% discount? I get discounts on hotel by calling the place and making a reservation. Automation is easy but 10% on a $1000 bill is 100 bucks. For me alone, that's two weeks of good cooking and eating.
Doctors and hospitals are often connected to charity care programs. Meaning a part of the care they do is pro-bono. A lot of people quality for these programs because it is based on the cost of care.
Also, by law, every non-profit hospital is required to offer financial assistance programs. It’s not just low income patents that qualify either. Even someone making 100K a year can qualify if the treatment is expensive enough.
You have to ASK about these programs.
Emergency savings and investment funds
Because of cost, I opted out of standard medical insurance. At the time, I was broke and I didn’t use the care. But also I am (still) fundamentally and morally opposed to the system. So I did lots of research about what were my options.
So I am a part of a healthshare. Lots of these are based on religious doctrines so they won’t pay for drug rehab or abortions. That's fine with me. As part of the coverage, I have to talk with my doctor about prices and negotiate them down before I submit the bill for payment. Other healthshares have teams that do this leg work for you - but at the time I couldn’t afford them. There is also a code of conduct with these religious healthshares: to treat your body as a temple and give freely. I can get down with that idea.
If you go this route, be sure to have a savings account set up for medical emergencies. You should be donating some money to this account every month and do not touch it. Another good option is having a low risk mutual investment account that wont get taxed if you have to take money out. This is just a back up for your savings account so get 1 to 5K in your bank as soon as possible. 10K is best. Then start filling up the mutual fund.
Here are some of the resources I used to gather my thoughts. These are the ones worth reading with plenty of new information. The last one is a site to bookmark.