Consumers may feel that medical billing rates are rigid, inflexible, and fixed, but that’s not necessarily true. A new study finds that patients often stand to gain financially by disputing charges they believe to be in error and negotiating for financial relief.
A new University of Southern California study found that 86% of consumers who don’t inquire about their medical bills do so because they believe it wouldn’t make a difference, but “the experiences of those who do inquire provide evidence to the contrary.”
A survey released in August found that of people who called because they didn’t understand or could not afford their medical bill, about 26% received an explanation for their medical bill and then had the bill adjusted, about 15% received a discount, 8% received financial assistance and 7% had their bill waived entirely.
“Of those who sought help, the majority received some form of relief through self-advocacy,” said Erin Duffy, a research scientist at the University of Southern California’s Schaefer Center for Health Policy and Economics and a co-author of the report.
The researchers polled 1,135 U.S. adults from Aug. 14 to Oct. 14, 2023.
Nearly one in five respondents reported receiving a medical bill within the past 12 months that they did not understand or could not pay, and about 62% of respondents contacted a billing office to address this concern.
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“If you can’t afford to pay or if you think (the bill) isn’t correct or doesn’t match your experience of care, you should call and ask questions,” Duffy said.
Savings could range from hundreds or even thousands of dollars, depending on a patient’s health insurance, the type of visit or procedure and other factors, said Carolyn McClanahan, a physician and certified financial planner in Jacksonville, Florida.
The bill is “flying all over the place.”
A Consumer Financial Protection Bureau analysis of health care costs for adults age 65 and older in 2023 found that patients “face a complex billing system that is more likely to result in errors and inaccurate billing.” Inaccurate billing often stems from incorrect insurance claims and occurs more frequently among consumers with multiple insurance policies, the CFPB said.
Common errors include missing or invalid claims data, authorization and pre-authorization issues, missing medical documentation, incorrect billing codes and submitting claims outside of deadlines, according to the report. These errors lead to “denials of claims that should have been paid,” the report said.
“(Bills) are all over the place,” said McClanahan, founder of Life Planning Partners and a member of CNBC’s advisory board, “and there’s no transparency or rationale for how (insurance companies) determine charges.”
Doing nothing to avoid paying medical bills is probably not a good idea, as it could result in negative financial consequences, including late fees and interest, collections, lawsuits, repossessions, and a lower credit score, according to another CFPB document.
“If something seems egregious, question it,” McClanahan said.
How to manage medical expenses
Consumers should ask up front how much a consultation or treatment will cost, or inquire about what the estimated cost will be, she said.
McClanahan said consumers may “end up paying a lot less” if they pay with cash rather than insurance, but added that writing a check can have other consequences, such as the amount not being counted toward their annual out-of-pocket expenses.
If you feel you’ve been overcharged, ask for an itemized bill from the provider or hospital to make sure there weren’t any errors or duplicate charges, according to PatientRightsAdvocate.org. The nonprofit recommends finding out the fair market price for services and using that information to negotiate.
If something seems egregious, question it.
Carolyn McClanahan
Physician and Certified Financial Planner based in Jacksonville, Florida
The phone number of the health care provider’s accounting or billing office will be listed on the bill, according to the CFPB.
According to regulators, three other questions to ask about the statement are:
Does the charge reflect the services received? If you have insurance, does your bill reflect the payment made by your insurance and what the provider understood to be covered? Are there any charges listed that were actually out-of-network services?
When you call a health care provider about a medical bill, McClanahan says to keep a record of the conversation: include the person’s name, what was discussed, and get an appointment to hear back.