Money & Policy

How to Protect Your Health Care Wallet

3 ways to lower medical bills and 5 to deal with overcharges

One goal of The Affordable Care Act was to encourage Americans to become better-informed health care consumers. The theory was, by paying more out-of-pocket for our care, we would shop more wisely for services. The hitch is that most consumers have never learned how to purchase health care to keep our medical bills down.

Until recently, the only question we’ve needed to answer has been: What insurance do you have? One of the most difficult transitions in this new era is that, while patients now have greater payment responsibility, they don’t yet have all the information or tools needed to make smart financial decisions.

Here are three cost-reducing steps you can take before receiving care and five billing/payment rules to avoid overcharges or to handle them if they arise:

3 Steps to Lower Health Costs

When physicians refer patients for tests or procedures, they tend to send them to a particular location out of habit. But most doctors are unaware of what the out-of-pocket cost will be for those services. So, before you receive medical care:

Many health providers offer a discounted cash price which can be significantly below what you’d pay using insurance.

1. Compare prices from alternative providers. There are often extraordinary price differences between local facilities for identical diagnostic and treatment services. Call at least two health care providers offering the procedures you seek and ask what your out-of-pocket costs will be.

Keep in mind that hospitals often charge significantly more than free-standing labs, radiology centers or ambulatory surgery centers. If a provider can’t tell you what you’ll owe for an outpatient service, call another one.

2. If you have a High Deductible Health Plan, ask if the provider has a discounted “cash price.” Before getting the medical service, find out if you can be charged less than with insurance if you agree to pay cash upfront. Many health care providers offer this arrangement for people with High Deductible Health Plans and the cash price can be significantly below what you’d pay using insurance. A recent Wall Street Journal story found self-pay discounts of as much as 50 percent.

3. Avoid “surprise balance billsby requesting a written Estimate of Cost from your surgeon or health plan prior to outpatient surgery. (A balance bill is when the health provider bills you for the difference between its charge and the allowed amount.) The Estimate of Cost should include your anticipated out-of-pocket responsibility, including reimbursement to anesthesiologists, assistant surgeons and other ancillary providers who may not participate with your health plan.

You may be able to negotiate in-plan charges, request in-plan alternatives or even select a different surgeon. But at least you won’t be surprised by large unanticipated, non-covered charges.

Resolving 5 Medical Overbilling Errors

Few consumers know the medical billing and payment rules and don’t recognize when they’ve been overcharged. Yet consumer overpayments for hundreds, and even thousands, of dollars are commonplace.

Here are five common medical overbilling errors and how to resolve them:

1. You were admitted to a hospital directly from the emergency room and received inpatient and ER bills indicating a co-pay or balance due on both. Admission straight from the ER is considered an “emergency admission” and the ER charges should be included on the inpatient claim. Your out-of-pocket costs should be based on your inpatient facility benefits.

If you spot this overcharge, review your Benefit Plan to verify your out-of-pocket responsibility for an inpatient admission and then call your health plan to discuss.

2. You were treated in an emergency room, stayed past midnight and were billed an ER co-pay for two days. An ER visit is a singular event, and only one facility co-pay applies, even if your visit spans two days. After reviewing your Benefit Plan to determine you payment responsibility for ER services, call your health plan to discuss.

3. You receive “balance bills” from non-participating physicians (those not contracted with your health plan) who treated you in a participating ER.  While you are responsible for satisfying out-of-pocket costs, you may not be responsible for physicians’ charges above your plan’s in-network maximum reimbursement rates (depending on plan design and state law).

Check your plan’s provider network to verify whether the physician is participating. Overpayments occur when a participating physician’s claim is billed and paid as if he is non-participating. And check your policy to determine if your payment responsibility is capped at the plan’s maximum reimbursement levels for ER physician services.

4. You are balance billed for “denied” services received at a participating ER. Treatment received in the ER is rarely elective and should be allowed by your plan. Call your health plan to inquire if you are balance billed for any ER services that were denied by your plan.

5. You receive a health insurance claim, but don’t know what you’re being billed for. The claim may be for services that should be paid by your plan or may have been sent in error. If there’s no detail with your claim or you don’t understand a charge, before you pay ask for clarification and even documentation that you received the services billed.

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By Lois Rudick Hall
Lois Rudick Hall is the founder of Health Cost Matters, which aims to inform consumers on how to lower their out-of-pocket health costs. She founded The Reclaim Group, where she advised health insurance companies on health care cost containment. Over the past few years, she has been involved in the challenges of managing her elderly mother's health care misadventures.

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