How did I walk into a surgery center not knowing what the bill would be? It wasn't for lack of trying. I asked the doctor if the procedure was covered, and he said yes. But my insurance company said I would be on the hook for a percentage of the cost since I was under 45.
I called the clinic to ask for the full price, and they told me to contact my insurance company. My insurance company asked me to contact the billing department at the clinic. Billing said they would call me back. They didn't. By the day of my colonoscopy, I had my hand up.
The doctor told me I needed it urgently. I would just bear the cost, whatever it may be.
This is not an uncommon situation, says Carolyn McClanahan, a physician and certified financial planner with Life Planning Partners in Jacksonville, Florida.
“Our health care system is so broken,” she says. “And the billing system is very opaque.”
When the bill arrived in the mail, I breathed a sigh of relief: $50. But it could have been much worse. The Internet is full of horror stories about seemingly routine procedures that cost patients thousands of dollars and cripple their financial plans.
If you're concerned that the medical care you need could do the same to you, McClanahan recommends taking the following three steps.
My first instinct when it came to my procedures — checking the details of my insurance plan — was right, McClanahan says.
“The first step is that you need to understand your insurance coverage, which is very complicated. Most people have no idea what their insurance covers.”
Start by determining what type of plan you have. Many standard employer-sponsored plans are co-pay plans, which come with some level of coverage from the first dollar. “For example, you might pay $40 for your visit — that goes into your deductible — and insurance picks up the rest,” McClanahan says.
If you are in a high deductible plan, you must reach a certain out-of-pocket limit before coverage begins.
You should also be aware of which doctors are in your network, what types of procedures are fully and partially covered, the annual out-of-pocket maximum, and whether your co-payment varies depending on whether you see a primary care doctor or a specialist.
Even if you have an understanding of what you owe under your insurance plan, it can be difficult to know exactly how to price potential treatment, McClanahan says. I knew I would have to pay a certain percentage of the total cost of my procedure, but no one could tell me the actual total cost.
“The problem, especially for people with high deductibles, is that the insurance company has already negotiated a rate with the provider,” McClanahan says. “If you don't have a copay plan, it's a good idea to call and say, 'I have a high deductible plan, and I want to know how much you're charging my insurance company to do this procedure.'
Exactly who you direct this question to can be ambiguous, since some medical providers have their own billing department while others may outsource to an outside company. You may have to be more diligent than you have been and start early in your inquiries if you want to get to the bottom of things.
While the work of finding someone who can give you a definitive answer can be painful, it can also come with great financial reward. If you want something relatively simple, like an MRI, you can contact different providers within your network to see who offers the best price, McClanahan says.
You may also be able to save if you offer to pay cash instead of filing a claim through your insurance. This means the money you deposited won't count toward your deductible, but it could also significantly lower your bill. McClanahan recalls her last visit to the doctor to receive some diagnostic work that would have cost her $3,200 through her insurance.
“They said, 'If you pay cash, we'll do it for $1,500.'
Sometimes a bill will be unavoidable. Maybe you had an emergency. Doctors in your network who can treat your disease may be few and far between. Maybe you need care quickly and can't afford to negotiate rates on the phone all day.
If your bill arrives and it's higher than expected, your first step is to review the charges.
“Ask for an itemized bill and see what they charge you,” McClanahan says. “There are a lot of bills that have errors. And if you think you're paying too much — even if your insurance company is billing you correctly — you need to talk to your insurance company and say, 'I don't think this bill is right.' right.””
Ideally, you'll have done some negotiations up front and even gotten some guarantees about what you can expect to pay in writing, McClanahan says.
Barring that, you'll have to bargain after the fact, and some situations will have more room to negotiate than others. If you're adequately insured and are billed a few thousand dollars, “the hospital will fix the things that are wrong, but they won't negotiate with you,” McClanahan says.
By medical providers' logic, “if you have good insurance and can't cover $2,000, it's your fault,” she says.
If you're charged thousands for a medical procedure and the cost doesn't factor much into a very high discount rate, you may be able to ask for a lower bill. “It's in their best interest to negotiate with you because they'd rather get something than nothing,” McClanahan says.
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