Why You Need to Take Time to Understand Medical Bills

Medical Bills Cost

For various reasons medical costs have been much higher for our family this year. My wife and I felt like we had a good estimate for our Flexible Spending Account (FSA) savings account but that account was used up by about the middle of the year. Ouch!

Healthcare costs are sometimes difficult to estimate and we have to continue to do the best we can in planning for them. I think the key is to set money aside consistently because most of us will encounter co-pays, prescriptions and unplanned expenses from time to time.

One of these unexpected expenses was my recent trip to the emergency room for an allergic reaction to some medicine. Fortunately, everything was okay, but I’m still seeing a few bills trickle in from this incident. A few weeks ago I received a bill from the hospital for approximately $250. The statement showed that my insurance company had made a payment, but I was left with the remaining amount of $250.

I could have paid this bill but something told me I should call my insurance company and understand why I was being charged. $250 is a lot of money! So, I put in a call to my insurance company and it turned out I didn’t have to pay a penny! The insurance company paid the contracted rate, but the hospital billed me for the remaining balance. Fortunately my insurance company agreed to cover the balance since I had already met my responsibility.

This particular situation worked out great for us! I love not having to spend $250 on medical expenses! What are a few lessons that can be learned here?

1. Stay on top of medical bills.

It’s important to be organized and stay on top of medical bills. I made sure it was on my to-do list to follow up and to do so in a timely manner. Because of these precautions, I didn’t let the bill go past the due date.

When medical incidents occur, it’s easy to let these bills get hidden under a stack of papers or even lost. After an incident, know the bills will be coming and be ready to organize them in your file by due date. You’ll have peace of mind knowing they’re all located in one place and you can easily manage them and pay them on time.

Make sure you also take time to view your claims online. In my case, I was able to log onto my insurance company’s website and find the claim number. Having all the information in front of me made it easier to discuss when I called the insurance company.

2. Invest the time to understand your medical bills.

I think it’s easy to get a bit lazy on such bills and just pay them, especially when the balance isn’t very high. It’s also easy to assume the bill processing is correct between the medical provider and insurance company.

The truth is that people work in billing departments and like us, they sometimes make mistakes. It’s also important to keep in mind that software programs that handle billing aren’t always correct either.

In my situation there may have not been many people involved. I’m sure a lot of this was driven by software programs on both sides of the fence. The hospital’s billing system may have automatically flagged me as owing more money. I can’t say for sure, but no one else may have ever caught this but me!

3. Take responsibility!

Overall, it’s important to realize that no one is going to take care of these billing situations with more care than you. It’s our job to manage our finances and stay on top of bills even when they may not be correct!

Remember to work with doctor’s offices and insurance companies with kindness and respect. Remember there are people on the other end of the phone just like you and in general most people will help when they are treated with kindness and respect.

It’s sometimes not a bad idea to get both insurance and medical providers on the phone at the same time. Your responsibility is to manage the situation and get people talking if there is an issue.

In a past situation, I arranged a 3 way call with the medial provider and insurance company. I remained quiet as both parties worked it out.

Final Thoughts

Medical bills can sometimes be overwhelming, especially when there is also medical stress and concern. Just remember to stay organized, invest some time to understand why you’re being billed, and take responsibility to get the problem resolved if there is an issue. Patience goes a long way in these situations too!

What has been your experience with medical billing mistakes and what tips do you have to resolve them?

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  1. Violet Kovacevic

    A few years ago, my husband received a bill from his doctor’s office for a wellness appointment which was fully covered by insurance. After calling the office, we found out that the billing staff did not code the appointment as a wellness appointment. It took two more phone calls and a call directly to the doctor before this was straightened out. Apparently, the billing staff did not know how to code the appointment as a wellness one.

    • joe

      Interesting how errors are in their favor.

      I had 15 bills over a year from the hospital that were wrong. “It is a training issue.” 2 years later, I received another bill that was wrong in a row.

  2. JP

    Thanks Jason. Solid post.

    I haven’t been reviewing my statements recently. I need to get back on that 😉

    Your attitude is spot on. I had a friend who was diagnosed with a severe illness. The illness alone was enough for her to deal with. She was stressed, worried and feared opening the bills. But she had a great family friend who was an expert in the healthcare industry. She jumped on the bills like a pitbull. “You don’t need to pay that.” “Call them this weekend and ask what this charge was.”

    It’s often good to:
    – Partner up with a family member
    – Outsource medical bills completely to a family member
    – Schedule a specific time each week/month to review bills

    What is the worst that can happen? Someone will say no. You can buy yourself a late to quell the tears if you’re a little sad from the experience.

    Jason – what has been your most effective method of reviewing bills?

  3. joe

    NEVER pay a medical bill until you receive a paper statement from the insurance. I had 15 bills in a row that wanted me to pay the “discounted” amount. That is the part that I don’t pay and the insurance does not pay. The first time I saw the bill it said, “Final notice. Pay within 10 days or this bill may be turned over to a collection agency.” I wrote snail mail to the biller for 10 bills. Then twice to the owner of the hospital on bills 11 and 12. On 14 and 15 I sent the complaint to the CEO. Now I received a bill with 3 charges. “Estimated after insurance pays.” One charge was the full change and a request that I send insurance information. How lazy can they get. The other 2 charges “estimated” insurance charges. The third charge did not have an insurance charge, so I was charged the full amount. Beware of any bills that come from a Paysphere Circle address in Chicago (they bill for a number of health providers). I have excellent insurance and my bills are usually paid in full by the insurance. So why do I owe thousands? The other bills are dead on.

    If you over pay, don’t expect a refund. The game now is to stall until you forget. A friend of mine over paid and they said, “Sue us.”

    By law there are no interest charges on over due bills. If you are worried because of their threats, pay a dollar. As long as you pay something, they can’t turn you over to a collection agency for a long time.

    This begs a question. If the biller collects more money than expected, who gets the money? The biller or the hospital. I bet a dollar that it is the biller.

    I received a bill for $104,000 got back surgery. The biller wanted me to chase the insurance. The insurance paid the very next day to the tune of $8,000. Of course, nobody told me the bill was paid for over 30 days.

    If we paid what insurance pays, a lot more of us would be self insured.

    I need insurance to negotiate the price.

    If you tell the doctor you have no insurance, the price is cut at least 40%.

    This is all fun and games for them and a living Hell for us.

    I’m told now by doctors that insurance does not want to pay for arthroscopic surgery were recovery is days. They pay for the extreme surgery where recovery is weeks. Same thing with robotic surgery.

    I know a radiologist that bets $140,000 a year. But his education cost $700,000. Hospitals are no importing foreign doctors and work them like slaves, but they work cheaper.

    I just saw on 60 Minutes TV a company that makes fasteners for the military. They can’t find qualified people for 500,000 jobs in the state. They want people with all this training and pay $12 an hour. That is the way all things are going these day.

    No one wants to get off welfare, because they have better pay an benefits not working. Then there are the side cash jobs.

    The USA is upside down.

  4. Savvy Scot

    Some good tips… When I realise how complicated things are on your side of the pond, it makes me really thankful for the UK healthcare system!

    • joe

      I will not limit my complaints to health care. It seems to be a way of doing business.

      I received a mailing for a Bank of America Credit card. I would get $400 for signing up and making some purchases. I went to the local branch to sign up.

      Then I tried to get my “bonus” money. The personal banker neglected to sign me up for the offer, so I was out of luck. I suspect she gets a bonus for signing up new credit card customers.

      I have a list of these offers I try to cash in on and often find a technicality that means I don’t receive the bonus.

      Years ago, I had a cell phone that cost 38 cents a minute. Meaningless because I used it every few months. Even if the cell phone was in the drawer turned off for a few months, the monthly bill always had a charge for a minute or two.

      I now have 2 different pay as you go phones. One is “cost per minute” and the other one sells me “prepaid minutes” on a card. There is a huge difference. Cost per minute goes up while the number of minutes I buy don’t change in price because they are already paid. The latter hopes I will allow the minutes to expire.

      In the USA, car buying has changed. We used to trade cars in often, so dealer loyalty was important. Now people buy every 10 or more years. In fact, the dealership may change hands several times before I come back looking for a new car. Therefore, the salesman will say anything to make a sale.

      I’ve taken cars home and return in a few days with a check for the full amount. The salesman takes my check and turns his back on me like I asked to borrow a dollar at a bus stop. They make it amply clear that after the sale, their energy budget is exhausted.

      I have a friend that bought a $50,000 car. He went back in with a question on how to operate something on the car and there was no one there that would help him.

      On the other hand, when they want repeat business as in the service department, things are completely different. They open doors for you and walk you to the cashier.

      I once went in for 60,000 mile service at the dealership. He found a spark plug that would miss. “You would only notice it at high speed.” That cost $800. I just got back from a 3,000 mile trip where at times I was going over the speed limit and it ran flawlessly.

      The list goes on and on.

  5. Nate Fancher

    Hey there! I’m new to this blog and am excited to dig in more to all that it has to offer.

    My wife and I had a baby this year, and understanding the way the hospital itemized everything was quite a task! It took calling the hospital several times to work through the way they structured the billing.

    It’s funny how certain areas of healthcare can be well advanced, while others can be so antiquated. But I totally agree with you that taking time to completely understand the billing on the front end relieves a lot of unnecessary stress later.

    Thanks for the great post!

  6. Lisa Standring

    An excellant reminder and timely too. I just opened a bill for $185 for a 5 minute office visit. i was flabbergasted at the cost but put it in the pile of bills to be paid. Now that I think about it, I will give the insurance company a call and ask about the details.
    Thanks for the gentle nudge.

    • Jason

      Great Lisa! Hope it works out in your favor.

  7. Kevin @ Ask for Benefits

    It sounds like you might have run into “amounts above usual customary and reasonable”, or UCR. Insurers negotiate payment rates with providers for a whole range of health services. In network providers agree to accept these charges, while those out of network are free to charge whateve they like above what the insurance company pays.

    Sometimes in network providers include these extra charges not allowed in their insurance contracts.

    I ran into this with my daughter’s orthodontist. They were in network, and presented a bill with out of network charges. When I called to explain why the bill was wrong, the Dr. fought me at first, but agreed to the lower UCR rate only after some arm twisting.

    I pays to know how insurance plans work.

    • joe

      The bill ran something like this.

      Charge $100 Discounted amount $60 Insurance paid $50 you owe $10

      Bill was $60 and not for $10. That happened 15 times in a row over the course of a little more than a year for different services. The numbers were for thousands of dollars.

      I saw the bills for the first time and they threatened with a collection agency if I did not pay in 10 days. What if I was out of town?

      The latest bill was “estimated after insurance pays.” One charge never deducted for any insurance and wanted my insurance information. So, it was not estimated and they expected me to pay in full. Too bad. They can wait.

      There are all kinds of ways to bill you and then blame the computer like it is a person that made a mistake. I notice the errors are always in their favor. Interesting.

      Another way they dance around you is when there are 2 insurance companies. For example having Medicare and a supplemental. Medicare gets the bill first. Then writes that “you may owe” this much. Then the 2nd insurance company pays something on what Medicare does not cover. If you don’t match up the statements from each company, you may just believe you owe something when in reality it is paid 100%.

      Don’t expect any biller to catch the error and issue a refund.

      My friend went to the health care provider to get his refund. They asked if he wanted to donate the money. Why? That hospital is a profit making organization.

      The implication is that the hospital is a charity.

      Obama care would not be necessary if there was not this price gouging.

      Read the July issue of Reader’s Digest. The writer contacted 17 hospitals. The conclusion was that prices are arbitrary. This his high because we lose money over here. One MRI was $2,600, but go to a store front MRI and it is $600. According to Reader’s Digest the DIFFERENCE in price between an emergency appendicitis in one hospital compared to another in Ca. is OVER $180,000. Some hospital procedures may also be done in a doctor’s office and the savings is 90%. A must read article.