10 smart moves to save on health care

How to stop getting overcharged

Medical debt is one of the single biggest threats to financial security.

And it's taking a toll on millions of Americans.

One in five people under age 65 had trouble paying medical bills in recent years, the latest data from the Centers for Disease Control and Prevention show.

Accumulating bills can force people to deplete retirement or college savings. It can ruin credit scores. And surveys have found that more than half of all people who file for bankruptcy are pushed into it by medical debt.

How does this happen? Remember, just one night in the hospital can mean thousands of dollars in out-of-pocket expenses — even for someone with health insurance.

There is good news. Though you can't control whether you get sick or injured, you can exert authority over how much you pay.

We’ve examined some of the most common ways consumers find themselves on the hook for big medical bills. These 10 smart moves can protect you from getting overcharged for health care.

Price shop before any procedure

When scheduling a nonemergency procedure, there’s a good chance you’ll be able to choose from several in-network options.

Let's say there are three high-quality facilities in your insurance network where you can have the procedure.

You'll want to compare what each facility charges for your procedure because the costs can vary substantially.

First, get a general idea of fair pricing in your area using an online tool like Healthcare BluebookPricing Healthcare or NerdWallet Health’s hospital price comparer.

Then call your in-network facilities, and ask what they charge before you commit.

Surprisingly, you might get the lowest rate if you don’t use your insurance.

Ask each facility for its cash rate. If it’s lower than what you’ll pay by having the procedure billed through your insurer, consider paying cash.

Circumventing insurance billing means your payment won’t count toward your annual deductible or out-of-pocket maximum, however. If you’re anticipating high medical spending for the year, using your insurance might save you money in the long run.


Make sure your doctor’s lab is in-network

Just because your doctor is in your network doesn't mean his or her preferred lab is. The tests performed during your visit might be out-of-network.

Even preventive services that you’d expect to be free under the Affordable Care Act can end up costing you if your doctor sends them to an out-of-network lab. Your insurance might deny coverage.

Any time your doctor performs a test, ask the office to send it to an in-network lab.

Bring a list of nearby participating labs to your appointment. It’s your responsibility to know which labs are in your insurance network.

Get a list by calling your insurance company or using its online in-network provider search tool.

If your doctor sends you to an outside lab for a test instead of performing it in-office, ask the office to write the requisition for one of your in-network labs.

Not only will you enjoy a lower copayment percentage for your lab work, the overall bill might be lower, too. Insurers negotiate lower preferred rates with in-network providers.

Question procedures beforehand

When doctors perform procedures or authorize tests that might be unnecessary, you could face unneeded costs and be exposed to unwarranted health risks.

The doctor-patient lists at ChoosingWisely.org can help you become a more informed medical consumer.

The site covers dozens of scenarios, explaining when certain procedures, tests and medications are necessary and when they aren’t.

Suppose your doctor recommends an MRI to help diagnose your lower back pain. This test typically costs $880 to $1,230 and exposes you to radiation.

ChoosingWisely.org says you should skip this procedure if the onset of pain is recent because most lower back pain resolves itself within a month.

What’s more, the site says patients who had a lower back MRI were eight times more likely to have back surgery. The result: Recovery was no faster, but medical costs increased five-fold.

Ask about the reason for any test or procedure before it’s performed, and understand that you can always refuse.

Verify your provider’s in-network status

In an ideal world, both your doctor and insurance company would notify you if a provider leaves your network.

Notification doesn’t always happen, especially for patients with individual or small-business policies.

Physicians sometimes leave networks because the insurance company’s reimbursement rate is too low or its administrative requirements too burdensome.

Other times the insurer eliminates the provider over subpar quality of care, breach of contract or high costs.

"The insurers are trying to make as much money as possible and look to shrinking networks to improve their profit margins," says Sarah O’Leary, founder of ExHale Healthcare Advocates in Los Angeles. "Always call ahead and check to see that your provider is in your network prior to receiving any nonemergency test, procedure or exam."

Otherwise, you might learn when the bill comes that you're responsible for the much higher out-of-network rate. Even worse, your insurance company might deny coverage altogether.

In this worst-case scenario, call the provider and ask for the cash rate. It should lower your bill.

Ask for an itemized bill

Even after a complex medical procedure, you may only receive a bill showing the total you owe, especially if the provider has billed your insurance separately.

A provider is required by law to give you an itemized statement if you ask for it. You should ask because medical bills are notoriously error-prone.

The summary bill you typically receive has little detail, says Pat Palmer, founder and CEO of Salem, Va.-based Medical Billing Advocates of America, which helps patients negotiate fair prices on medical care.

"A provider isn’t going to offer the detailed statement without you requesting it because overcharges can’t be detected without it," she says. "Until they are required to automatically supply a patient with the detailed, itemized statement, you must make sure to request this document for each and every medical bill you receive."

The bills aren’t always easy to read, though.

For help deciphering the five-digit current procedural terminology (CPT) codes that accompany each charge, use the American Medical Association’s search tool.

Scrutinize your itemized bill

Compare your itemized bill to your insurance company's explanation of benefits to make sure the provider is charging you its agreed rate under its contract with your insurer.

If they've overcharged you, submit the evidence to the provider and request an adjustment.

Look for charges you expected to be in-network that have been covered at the out-of-network rate or denied. Ask your insurer to explain anything you don’t understand. Appeal anything that seems incorrect.

Julie Sanchez, owner of St. Peters, Mo.-based RN Audit Specialist, which reviews patients’ medical bills for accuracy, says consumers should check for these common hospital billing errors:

  • Incorrect dates and times of service. Did the hospital claim you stayed longer than you did?
  • Medication dosages that seem too high.
  • Duplicate charges.
  • Services you didn’t receive.
  • Charges for equipment rental and basic supplies. Hospitals that accept Medicare reimbursement can't charge for this.

"If the patient has any questions, they should ask for a hospital bill audit to be done, just to verify everything is correct," Sanchez says. "Keep in mind that any undercharges will also be added to the bill."

Ask providers for a discount

You’ll have the most bargaining power if you negotiate a discount with the provider’s billing office in advance, then pay before having the procedure.

If it’s too late for that, you still have options.

If you ask, the provider may give you a "prompt pay" discount of perhaps 15% in exchange for immediate payment upon receiving your bill after insurance has processed your claim, since so many people pay their medical bills slowly over time or not at all.

"A consumer should aim for an overall discount of at least 35% if the charges are not fair and reasonable," says Pat Palmer of the  patient advocacy group Medical Billing Advocates of America. "However, just like with any negotiation, you should start high and work your way down slowly. For instance, try to start off negotiations by requesting a 50% discount, then reply appropriately to the facility's response."

Palmer says you should be prepared to explain why you are seeking a discount or bill correction.

Know when to choose an urgent care center

Not only is emergency room care expensive, your insurance company might charge you a hefty ER copay.

Many non-life-threatening emergencies, such as animal bites, minor lacerations and burns, and allergic reactions, can be treated at urgent care centers instead, where your costs could be similar to or slightly above what you’d pay for a doctor’s visit, saving you hundreds of dollars over the ER.

Urgent care centers not only charge less for procedures, they’re also less likely to order unnecessary tests.

Now is the time to see what urgent care centers near you are in your insurance network, what they treat and when they’re open.

Also check to see where your nearest in-network emergency room is and whether its doctors are in your network.

If you’re not sure how urgent your situation is, call your insurance company’s 24/7 nurse hotline for free advice. Check your insurance card for the phone number.

Understand your insurance coverage

You’re already paying hundreds if not thousands of dollars a year for health insurance.

To minimize your additional costs, you must understand your plan.

Your private health insurance plan is required to give you a form clearly explaining your benefits. Consumer Reports provides a sample here.

The key insurance plan features you should understand include:

  • In- and out-of-network annual deductibles for you and your family.
  • In- and out-of-network annual out-of-pocket maximum.
  • What costs don’t count toward the out-of-pocket maximum (insurance premiums, for example).
  • The percentage of in- and out-of-network costs you’ll pay (often 20% and 40% coinsurance) after meeting each deductible.
  • Additional deductibles for specific services, like prescriptions.
  • Whether you need a referral to see a specialist.
  • Copayment amounts for doctor’s visits, tests and emergency room visits.
  • Excluded services like cosmetic surgery or infertility treatments.

Get expert help with billing mistakes

A health care advocate can find mistakes on your bill, items for which the provider has overcharged and items for which your insurance has underpaid.

These services range from local, one-person operations to national firms. They will contact your health care providers to get billing mistakes corrected and negotiate lower fees.

Many advocates charge you a percentage of the savings they achieve.

If the health care advocate’s fee is 30% and they cut $1,000 off your bill, you’ll pay them $300 and pocket the other $700 in savings.

Others charge an up-front fee of around $100 to $300. Most advocates clearly disclose their prices on their websites.

Some advocates only work with bills exceeding a certain amount, typically $300 to $400.

If you have employer-provided health insurance, ask human resources if your company has contracted with a health care advocate.

If not, Claims.org can help you find an expert in 18 states.

The Patient Advocate Foundation, My Medical Negotiator, Medical Billing Advocates of America and many other organizations provide services nationwide.

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