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Medical costs are always on the rise. And we all want to save money on our health care costs. One of the best ways to do that is to be prepared and willing to negotiate your medical bills.
Medical Bills Are Skyrocketing
In 2015, the Milliman Medical Index (MMI) reported that the employer-provided PPO coverage for the average family of four was $24,671, up more than 6% from the previous year and up from $9,235 in 2002. The employee portion of that is nearly 43%.
Even worse, medical debt now accounts for $1 out of every $3 owed in collection accounts, and it's the leading cause of bankruptcy in the United States.
Tips to Negotiating Your Medical Bills
While many people assume that medical bills have a clear-cut cost, much like a television at a store, the truth is you can negotiate your bills lower -- both before and after your treatment. Here are some tips for paying less for medical care.
1. Keep Excellent Records
Take note of what happens during treatments and keep track of your bills and insurance paperwork. Most providers only send a summary bill, but you can contact the billing department for an itemized statement.
Keeping records is important because medical billing errors are more common than you may think. It's fairly common for patients to be double billed or for the wrong billing code to be used.
If you spot an error, visit the billing department right away to have it corrected.
2. Learn How to Spot Billing Errors
By some estimates, up to 80% of hospital medical bills contain an error.
Always ask for an itemized bill from your provider so you can check that you are being charged for the right services. If you have health insurance, you will also receive an explanation of benefits statement. Compare the EOB statement to your bill. Your EOB will include details of the service, the service date, the amount the provider billed your insurance, the total amount not covered, and your total cost.
Here are some common medical billing errors:
- Duplicate Billing. Make sure you are not being charged twice for a single service.
- Canceled Procedures. You may be mistakenly charged for procedures or tests that were canceled. You may need to provide documentation to prove you did not receive the procedure to dispute the charge.
- Upcoding. Upcoding refers to a bill that is incorrectly charged as a different treatment, usually a more expensive treatment. For example, you may have received a generic medication but your bill lists a brand-name medication. Ask your provider to correct the upcoding immediately as it is fraudulent and illegal.
- Unbundling. This term refers to charges that were separated even though they should have been billed with the same procedure code. This error can be very hard to recognize if you aren't an experienced medical bill coder. An example of unbundling is being charged for a surgical kit and tray and a separate charge for a knife or other instrument.
Other billing errors can be tricky to spot. All hospitals use a universal billing system, so you can look up codes on the American Medical Association website if you are unsure of the meaning.
3. Check For Fair Rates
Before you can negotiate for lower bills, you need to know what the reasonable rate is for your treatment. Average rates vary a great deal by area, but you can use free resources like FAIR Health and Healthcare Bluebook to check prices in your area.
You may even be able to use Medicare rates as a starting point for negotiations. While most hospitals will not be willing to charge you based on their Medicare rates, it's a good place to start.
4. Ask About All Payment Options
Most providers are willing to set up payment plans for patients who can't afford to pay for the entire bill upfront. This doesn't mean you can't still try to negotiate a lower payment. If you get a payment plan, try to negotiate or a lower interest rate. The first step is trying to get an interest-free payment plan, but the goal should be keeping the rate as low as possible. Mention any hardship you may be facing and ask if discounts can be applied to your balance.
5. Ask About Discounts
Many medical providers offer discounts, but you usually need to ask because no one will speak up for you.
For example, some networks provide a discount for paying your bill over the phone.
Many people also qualify for charity care or financial assistance programs. And don't assume you don't qualify. If your medical expenses exceed a certain percentage of your income -- even if you make more than $100,000 a year -- you may qualify for discounted care.
Most hospitals, clinics, and providers also offer a cash discount if you pay the full bill at once, but there is usually a deadline to do so and you may need to ask for the discount to get it.
If you have a flexible spending account or health savings account you can use, you may also be eligible for a prompt payment discount of 10% to 30% if you pay the bill within 90 days.
The most important thing to remember is you need to speak up and take action to see a reduction in your medical bills. Don't assume providers will offer discounts or that errors on your bill will get corrected somehow. Contact the billing department when you have questions and ask for any discounts that may apply to you before attempting to lower your bill or request a payment plan.
It is possible to lower your medical bills.
But, if you want to save money on your medical bills, you will need to be your own best advocate. Do not assume that the rates negotiated by your insurance provider or quoted by your hospital are the best you can do. Be willing to investigate and negotiate your bills to save money on your medical related expenses.