08/17/2023
Medical Billing/ Surprise Bills Issues (Long and Detailed Post) -4 Key LESSONS-
This week’s detailed post involves my research around the area of medical billing, in and out-of-network billing issues, and getting a surprise bill and how to deal with these. I hope this educates and helps those who need it.
My learning about medical billing started with the birth of my first child in 1998, my second in 2002 with lots of NICU and helicopter bills, my wife’s cancer journey from 2013, and my own in 2021. I’m going to share an abundance of information on the billing process, how I negotiated around some of these, and some new laws that many are not aware protect them against certain billing issues. So, grab some coffee and your favorite drink and let’s dive in.
Very few things in life cause as much stress as illness and the bills that come along with it, some expected, others not so much… some covered by insurance, others not. Add in shady debt buyers and questionable billing practices, and this has driven many people into bankruptcy or worse.
Let’s go back to 1998 when I had just gotten a Blue Cross and Blue Shield Policy Without maternity benefits. After the birth the next morning, hospital billing called and said, “we can’t discharge your wife until billing arrangements are made, you owe $9,700.” I told them I was going overseas on business for six weeks and I’d pick her up when I got back. The silence told me they had no sense of humor. I asked them what my options were, and they said pay it all, set up a payment plan, or… they could offer a discount for a cash payment. I asked what the cash price would be, and they said $2,600. I said I’d be right down with my checkbook, and just like that I learned that not all medical bills were set in stone and just by asking I saved $7,100. This lesson would help a lot later in life.
LESSON 1: Always ask for a discount, especially for cash or short-term payment arrangement.
Fast forward to 2002 and my wife was giving birth to our son prematurely and the medical issues were much more complicated. Once born, the child is covered and once again I paid $2,700 for the birth and then the problems started. He had to be airlifted to another hospital, had a grim prognosis but eventually after several weeks in the Providence NICU, was released healthy on… July 4th 2002. Then the bills started, in addition to the $10,000 deductible we started a folder to hold what would become over $240,000 worth of bills, all with names and codes I could not comprehend. So, I hired a NICU nurse to audit those bills and what I found was amazing, amazingly bad.
There were double and triple charges for things like diapers, bandages, Tylenol, tubing, and some billing enough blood thinner that if actually given, would have killed 5 people. All totaled, we found over $49,000 in errors which we reported to the insurance company who negotiated the final hospital bill and then actually waived our deductible as a courtesy.
LESSON 2: Always review/ audit your bills and ask for a detailed billing report, by law they must provide it. Hire a service to audit complex bills.
MEDICAL BILLING AND COLLECTIONS/ CREDIT REPORTING
According to the Consumer Financial Protection Bureau, in 2021 Americans had over $88 billion dollars in medical debt on consumer credit records. This has the effect of lowering credit scores and making credit much harder if not impossible to get and those that can get it pay Much higher interest rates.
Most of this debt is in increments under $500.
58% of all collection activity is for medical debt.
Black and Hispanic people, and young adults and low-income individuals of all races and ethnicities, are more likely to have medical debt than the national average. As a result, these populations may be more heavily impacted by outdated credit models that overestimate the predictiveness of medical debt. Older adults and veterans are also heavily impacted by medical debt. Additionally, medical debt is more prevalent in the Southeastern and Southwestern U.S.
Effective July 1, 2022
-Paid medical debt that was in collections will no longer be reported on consumers’ credit reports.
-More time before unpaid medical debt can be reported to collections, now 1 year instead of six months.
-Starting in the first half of 2023, Equifax, Experian and TransUnion will no longer include medical debt in collections under $500 on credit reports.
LESSON 3:
• When you get a bill, notify them you’ve received the bill.
• Declare to the provider there are potentially mistakes on the bill. Numbers vary on this, but one study estimates up to 80% of medical bills contain errors.
By doing this, you’re ‘freezing’ the clock on when the provider will label the debt in default, and sell it to a collections agency. This can give you more time to pay what you owe, as well as potentially reduce what you owe if there are real errors on your bill(s).
https://www.cnbc.com/select/medical-debt-credit-report/
IN NETWORK/ OUT-OF-NETWORK AND SURPRISE BILLING
Have you had insurance, paid your deductibles, co-pays and still received a surprise bill that you thought was covered? Or been told that your services or a provider was “Out-of-Network”? Then this section is for you.
On August 2022, the US Dept. of Health and Human Services issued the final rules “Requirements Related to Surprise Billing: Final Rules. Enacted as part of the Consolidated Appropriations Act, 2021 (CAA).
This act provides federal protections against surprise billing and “balance billing” the practice of out-of-network providers billing patients for the difference between: (1) the provider's billed charges, and (2) the amount collected from the plan or issuer plus the amount collected from the patient in the form of cost sharing (such as a copayment, coinsurance, or amounts paid toward a deductible).
The No Surprises Act provisions that apply to health care providers, facilities, and providers of air ambulance services, such as prohibitions on balance billing for certain items and services and requirements related to disclosures about balance billing protections, were added to title XXVII of the PHS Act in a new part E.
https://www.consumerfinance.gov/ask-cfpb/what-is-a-surprise-medical-bill-and-what-should-i-know-about-the-no-surprises-act-en-2123/
LESSON 4: If you have individual or group health insurance this act BANS the following:
Surprise bills for emergency services from an out-of-network provider or facility and without prior authorization
Out-of-network cost-sharing, like out-of-network coinsurance or copayments, for all emergency and some non-emergency services
Out-of-network charges and balance bills for supplemental care, like radiology or anesthesiology, by out-of-network providers that work at an in-network facility.
In addition, in many cases a “good faith estimate” must be provided PRIOR to service being administered.
One final thought, When you go to the doctor’s office and they say “your deductible hasn’t been met and we need to collect x$” Check your provider site for personal deductible and max out-of-pocket figures, take a screenshot and bring it with you. Show them you’ve met all deductibles and that they should check again.
If you’ve read this far Thank You. Let me know in the comments any situations you may have experienced and if you found this information educational. Please reach out if you’re considering financial, retirement planning, or investment management.
Have a great weekend.
Thomas
