Save Money On Medical Bills By Questioning Charges

When you open up a medical bill your’e usually not stunned by how little the doctor is charging you. Inflated charges, which seem to be the norm in the industry, would be laughable if their implications weren’t so crushing. But an invoice doesn’t have to be the amount you end up paying.

In an interview with The Frugalista, a medical billing advocate says one of the better ways to save money off your bill is to request an itemized list of charges and question them individually. Sometimes you’ll find inflated or downright fraudulent charges that you can request be reduced or eliminated. You can get on your way to enlisting the services of a billing advocate by checking out Medical Billing Advocates of America.

If the billing office won’t budge, you can always ask for a discount in exchange for paying your bill upfront.

Save Money On Medical Bills! [The Frugalista]

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  1. Darrone says:

    “We don’t just give out Staph infections for free, you have to PAY for that!”

  2. TuxthePenguin says:

    “Inflated charges, which seem to be the norm in the industry, would be laughable if their implications weren’t so crushing. But an invoice doesn’t have to be the amount you end up paying.”

    Sadly, they are inflated to try and recoup the losses that they get on people who flat out do not pay. If you know every time you do “Test A” that you need to make $100 to cover the cost, but you know 50% of the people won’t pay, you start to charge $200 to make sure you break even.

    • Nigerian prince looking for business partner says:

      With cost shifting, I think the biggest implication is for those without insurance. For those of us with insurance, we pay the contract rate, so we avoid the grossly inflated bills. For the enormous charges, I suspect it’s highly inflated in order to maximize the tax write off when people don’t pay it.

      I noticed that for 2012, our pediatrician raised her rates for a regular visit from $120 to $140 but the contract rate stayed the same at $82.50. I truly wonder if anyone is actually paying the flat $140 or if the uninsured are given a discount and the practice gets a write off for that amount.

    • jasvll says:

      I like the part where it leads to more people not paying…which leads to the pretense to charge even more…which leads to more people not paying…which leads to…

    • anti09 says:

      While this is true, it doesn’t explain the whole story. Nonpayment is certainly a problem in the health care industry, but it doesn’t explain why U.S. health care is the most expensive in the world by a very wide margin, and by no means the highest quality (or anywhere close to it).

      No, U.S. health care is broken because of a fundamental misunderstanding of basic economics. Our system promotes market failure and over consumption due to a pervasive insurance model that insulates consumers from the true cost of health care, leaving zero incentive (or even ability) to price shop.

      When you buy a washing machine, you probably examine the different models, compare prices from store to store, and buy the best model for the cheapest price that suits your needs. This is by definition impossible to do with health care. How can you objectively compare the quality of particular treatments? How can one put a price on marginal improvements in quality of life? How is it possible for a hospital to give you a realistic estimate of the cost to, say, treat cancer, when every person reacts differently?

      Price discrimination is the most basic and fundamental method of rationing scare goods that exists today. It’s the very basis of capitalism, and when that mechanism is destroyed, we get huge market failure in the form of patients demanding overtreatment (because they are insulated from the cost) and doctors over prescribing treatment (because they get paid for every patient they see and/or every treatment they prescribe). In the end, you have demand far outstripping supply, resulting in a bunch of people paying way too much for health care, and a bunch of other people dying because they can’t afford it.

      • Nigerian prince looking for business partner says:

        I completely agree. However, things do seem to be slowly changing since the introduction of high deductible plans.

        It’s still difficult to comparison shop but it is possible and is getting easier because providers are now requiring deposits and prepayments to cover high deductibles. When my wife was pregnant, we had to pre-pay for all of our prenatal care and our OB was able to give a detailed estimate for it all. We just recently replaced our $5,000 deductible policy with a $10,000 HDHP, so we are very price conscious. In the past few years, we’ve done so with my wife getting an MRI and have also used our family practice doctor and pediatrician for things that we would have gone to the ER in the past for (stitches and setting bones).

        It’s not a great system by any means but our behavior as consumers has changed since the days where we had low copays. For most, non-emergency care, there’s no reason why providers can’t give a good faith estimate. If a hospital performs 3,000 vaginal deliveries a year, they should have a pretty good range for costs that they can provide; as a consumer, knowing that 80% of their deliveries cost $12,000 – $15,000, at the very least provides a good starting point.

    • ARP says:

      It’s also a shell game by the providers. Providers overcharge and multicharge providers, knowing that there’s a good chance that some of it will get rejected and they won’t get all their money. The problem is that anything that is rejected is passed to the consumer who is paying absurd rates because of the providers approach.

  3. DJ Charlie says:

    I can confirm this. I have yet to see an itemized bill that doesn’t have SOMETHING extra on it.

    Case(es) in point:

    1. Overnight hospital stay in a double room, they charged me for a private room.
    2. Week-long stay, they charged me for THREE BOTTLES of Tylenol (I’m allergic to Tylenol, and never take it).
    3. A different week-long stay (for pneumonia), they charge me for a pap-smear (I’m male).

    ALWAYS get an itemized statement, and contest every whacko charge they put on it! Keep em honest and maybe someday they’ll stop doing stupid shit like that. Maybe.

    • SkokieGuy says:

      If legislation were passed that 25% of the amount of a billing error caught by the patient was to be paid to the patient, I bet a lot more people would scrutinize bills and a lot fewer errors would occur.

      • Nigerian prince looking for business partner says:

        I think that’s a great idea. As it is, there are no incentives for providers to not pad bills, make incorrect adjustments, etc. Most people have a low enough deductible and are under so much stress post-admission, I wouldn’t be surprised if the vast majority of people never even go over the bills.

        • sponica says:

          with my HMO I didn’t have a deductible…so my feeling is, why would I go over a bill the insurance company paid in full? if it’s too stupid to not see what it paid for, I’m not going to help them

          • kujospam says:

            What insurance company’s should do, is offer like 10% of any winnings if you help catch fraudulent charges. Then a lot more people would be checking their bills, but still not everyone.

  4. Nigerian prince looking for business partner says:

    It’s also a very good idea for all claims, not just large ones, to reconcile final bills against the EOB cut by your insurance company. We had a very large claim at the beginning of last year and about 1/4 of all of the bills had some kind of egregious error, like billing for the same service two or three times, billing for a service after a discharge date, or incorrect contract-rate adjustments.

    At the time, we had a $5,000 deductible and if we would have blindly paid everything that was billed, we would have wound up spending over $10,000 out-of-pocket.

  5. JohnDeere says:

    this reminds me of a pharmacy discount card i got in the mail the other day. its called RXrelief pharmacy discount card, and it supposedly gives me huge discounts on thousands of drugs at thousands of pharmacies. it says i can share it with anyone in my family or any of my friends and they are also giving them away on their facebook page. i thought it must be a scam, but everything i read online seems to make it legit.. anyone know anything about this card?

  6. tinmanx says:

    I think we should pay the same price as insurance companies. If it’s OK for the insurance company to pay $100 on a $1000 bill, why can’t we? I know they have contracts and all, but the hospital actually agreeing to this means the service/product is only really worth $100, not the $1000 they charge.

    • caradrake says:

      I think insurance companies get lower rates because they ‘guarantee’ that the hospital/etcs would be getting X amount of patients. So the hospital/etc will agree to a lower price, knowing that they would make up for the discount in volume.

      It’s how Walmart does their pricing strategy, you sell more items at a lower price, and earn more than if you sold less items at a higher price.

      The same thing doesn’t apply to individuals, who likely aren’t giving the hospital/etc a lot of business.

      • tinmanx says:

        Yes, but I’ll bet the hospital isn’t losing money on those prices. Can’t make it up in volume if your losing money or even just breaking event. They are making a profit on the prices they charge the insurance companies, it may not be much, but they are making money, else they wouldn’t have signed the contract. They price they charge the non-insured is just taking advantage of the disadvantaged.

        • Necoras says:

          Sometimes the hospital loses money, sometimes it doesn’t. If an insurance company represents 90% of a hospital’s customers the hospital may be willing to take a loss on some high dollar procedures in exchange for making sure it still has customers and is able to make money on more common ones.

        • Nigerian prince looking for business partner says:

          I’ve always suspected the ridiculous, non-contract rates for procedures has more to do with a provider maximizing the tax write off than anything.

          • mbbbus says:

            Doctors (IAAD) cannot ‘write off’ uncollected debt for tax purposes. Nor can we write off charity care.

            • Nigerian prince looking for business partner says:

              That’s interesting. Is there a reason why the IRS doesn’t allow deducting uncollectable accounts? Why is medical care the exception? Is it allowed if a 1099 is cut?

              According to http://www.cbsnews.com/stories/2006/03/03/60minutes/main1369185.shtml

              for-profit hospitals can write-off uncollected debts. Wouldn’t this also apply to most private practices? It would make sense non-profit hospitals can’t do this because they’re aren’t paying taxes to begin with.

              • Bsamm09 says:

                See my response above. Short version — The doctor you are responding to must be a cash basis taxpayer to not be able to write it off. If you are accrual based and bill a patient for a service you can write off the bad debt when they don’t pay. Once you bill them, you take the bill into income (pay tax on it) so you can write it off if you cannot collect it.

              • Not Given says:

                Depends if you’re cash or accrual basis. If your books are accrual you have already counted it as income, so if you have to write it off because you can’t collect it you can deduct it. On cash basis, you don’t count it as income unless you collect, you are already deducting any costs for supplies used to provide the service.

          • mbbbus says:

            Doctors (IAAD) cannot ‘write off’ uncollected debt for tax purposes. Nor can we write off charity care.

          • Bsamm09 says:

            Please elaborate. What kind of tax write off do you get?

            If you are an accrual based company and bill $100 and take it into income when billed the only write-off you get is when they don’t pay. If it occurs during the same year it is a wash. If it happens in a subsequent year you write off the bad debt because you took it into income already. This may or may not be beneficial.

            If you are a cash based company, you don’t take it into income until you get paid so no tax write off.

            • Nigerian prince looking for business partner says:

              That’s interesting.

              I’m not pretending to be an expert on the subject but based on companies where I’ve worked, when it’s determined that a client’s bill is unrecoverable, we’ve padded the bills to maximize the loss. It’s the same thing for providing volunteer/charity work, where we tend to maximize the number of hours donated. I have no idea how legitimate it is but it’s been standard practice at my past employers.

              • Nigerian prince looking for business partner says:

                I guess to summarize… If you’re fairly confident a customer wont be paying, isn’t it better to charge him $200 than $100?

                • Bsamm09 says:

                  Short answer — no. If you bill them $200 you have to take $200 into income and then write it off. If you are only taking $100 into income and then writing off $200, that is blatant tax fraud.

                  Example of Accrual based bad debt. This is your only transaction in the business.

                  Year one — Bill $200. Pay tax on $200
                  Year 2 — They never pay and now you can write off $200 you have a $200 loss and can carry it back to year one to get taxes back. (NOL)

                  Cash Basis example —

                  Year one — Bill $200 but don’t take it into income since you didn’t receive payment. No tax paid.

                  Year 2 — They never pay the debt. You cannot deduct $200 since it was never taken into income.

                  • Nigerian prince looking for business partner says:

                    You’re clearly way more versed on than the subject than I am.

                    I concede that I am wrong.

                    That was really the only logical explanation I can come up with as to why providers charge so much more to those who are least likely to pay. It just seems like a massive Catch 22.

                    • Bsamm09 says:

                      It’s what I do for a living and if you didn’t have a lot of accounting experience, I wouldn’t expect you to know it. People use the word “write-off” a lot but generally you can’t write off what you haven’t spent or lost. The issue I deal with is when is the correct and most beneficial time that we can legally recognize income and expenses. As they say, “Timing is everything”.

                      Hope you didn’t think I was coming down on you. I was trying to provide some examples to illustrate what goes on. Believe me when I say that 95% of people don’t understand it.

  7. Sarek says:

    When I was admitted, one of the questions was, “what medications, etc. do you take daily?” They didn’t ask if I actually wanted them. So late that night, they came around with aspirin (which I had already taken that day, vitamins (like I need a hospital to provide them), and my generic statin. I refused all but the statin.

    When the bill came, they had charged me $3.50 for the aspirin, and charged me $40 for the statin!
    I disputed the bill. I told them I didn’t get the aspirin, so they reversed that. I told them that $40 was outrageous for a pill that actually costs less than 4 cents. They told me I had to write a letter for that. So I did. I agreed that a large markup was legitimate, after all, the hospital is staffing a pharmacy, a delivery orderly, and a nurse to administer the pill (i.e. hand it to me so I could swallow it myself.) But no way is that a worth a 100,000% markup. Surprisingly, they ended up removing the charge! altogether!

  8. ElleAnn says:

    I got a surprise dentist bill after a root canal. I had insurance and had paid the patient’s responsibility portion of the bill in the office the day of the procedure– almost $500. 11 months later, I start getting bills from the dentist office for an additional $250. Apparently they weren’t satisfied with the negotiated rate with my insurance company (I was a state employee and the state was self-insured, so it’s not like it was a fly-by-night insurer) and decided to bill me for the difference. I managed to negotiate and they accepted $200 as full payment, but I still felt like the experience was extortion. Was there a better way I could have handled this?

    • Nigerian prince looking for business partner says:

      It really depends on whether the dentist was in-network or out-of-network. If it was in-network, then you had no responsibility to pay the difference in the bill. If it was out-of-network, the difference is on you, since the provider has no obligation to accept the contract rate. It sounds like you handled the situation well.

      • Not Given says:

        If I go to an in network doctor, I pay the copay and if they don’t like the deal they made with the insurance company, tough luck. If I go to an out of network doctor, I have to pay 20%. I pay the amount listed as patient responsibility and that is it.

        • Nigerian prince looking for business partner says:

          When you say 20%, do you have an 80/20 agreement with your insurer for out-of-network care?

          With my insurance, I have to pay the difference for out-of-network up until I hit my maximum out-of-pocket for out-of-network care. My regular deductible is $10,000 and my out-of-network is $20,000.

    • pgr says:

      Refuse to pay and find a new dentist!

    • paperdragon says:

      I have had this happen with two doctors last year. I have an HMO and both these doctors were in network, and I paid my copayment. Several months later, The doctors billed me for an additional charge with no explanation at all. I called the insurance company, and all they would tell me was that I owed for these charges, but I didn’t have to pay them.

    • mannyvel says:

      If you get a supplementary bill from an in-network provider, contact your insurance company immediately. That’s almost always not allowed under normal provider agreements.

    • Not Given says:

      Check your policy and EOB. My EOBs say right on them that I am not responsible for paying the discount the provider gives the insurance company and there is a line that tells me how much I am responsible for. If I’ve already paid more than that amount, I’ll go after them for it.

  9. yurei avalon says:

    I’ve had good luck with some doctors’ offices offering a discount if you pay up front or within X amount of days. And we’re talking decent discounts of 30-40%, not some piddling 10%. Granted this was for routine visits and not hospital time, but it’s always worth a shot to ask.

  10. Necoras says:

    If you know you’re going to have a procedure it’s worth asking questions before it happens. I got a tooth implant recently, and the assumption was that I would be put under for the surgery. I found out that the general anesthesia was optional, and that there was no reason they couldn’t do the surgery using only local anesthesia. I took that option.

    I’m glad I did, because I ended up needing a bone graft before the implant could go in. The doctor couldn’t have consulted me about it if I was asleep at the time. I was also able to go into work right after the surgery. I ended up not having to take two days off of work, and I saved $1000 between the bone graft and actual implant surgeries ($500 each).

  11. legolex says:

    Last time I requested an itemized bill, I got it and it was nothing but codes. When I called for help translating the girl flat out said “Google the codes to find out what they’re for.” She was nice about it but I can’t believe that that’s what I get. I hate everything about our medical industry.

    • Sir Winston Thriller says:

      You can look up the codes (CPT and IDC-9/IDC-10) online. Google for some resources. I ALWAYS do this after getting the Explanation of Benefits from Blue Cross and the bill from the medical practice. I’ve found errors more often than not. Usually these are miscoding on testing done at an appointment vs. testing done outside an appointment, or a visit being miscoded for a longer period of time. I have never had problems with the billing office when alerting them to errors.

    • joako says:

      I would respond and say I never got a 246 or a 387, I surgery.

  12. CorvetteJoe says:

    My sister was telling me the other day about the pricing of the birth of their latest child.

    They asked how much it would be for walk in care for the entire birth with no insurance… the hospital said $4000.

    They have insurance, so they opted for that.
    Their share of the bill was $5000…. the total was $25,000!
    It would have been cheaper to just pay out of pocket for them in this case.

    They looked over the bill and noticed how much of a complete racket the whole hospital and insurance is. She stated she was moved a few times between beds, and EACH TIME she moved to a different bed, they charged their insurance company for a new bed! EACH TIME. They were also billed for multiple hours for a doctor they never saw and a lot of other ridiculous things.

    And we wonder why insurance premiums are outrageous!

    Doctor’s gotta keep up on their luxury car payments I guess.

    • Nigerian prince looking for business partner says:

      I think a lot of people have experienced the same thing.

      When you have a high deductible, it’s often better to lie and say you’re uninsured than to pay the insurance company’s contract rate. We do this at CVS, where their prescription card for uninsured people generally provides a better rate than the insurance discount.

    • ohhhh says:

      OBs also have to keep up on their insurance too, 1 malpractice suit loss and they are done.

      $25k is way over the top, perhaps she should have taken it up with the person that handles fraudulent billing at the facility? I have done this in the past and had very good luck.

  13. framitz says:

    I am double covered, if you’re in this situation make SURE that both insurance companies are bill before paying anything.

    I had this come up just yesterday, saved me $200 on the one bill alone.

  14. PaulR says:

    Best way to fix this problem? Move to a civilized country – that is, one with single-payer Medicare.

    Really, I don’t understand why Americans put up with this. I really don’t.

    • sponica says:

      because it’s a YMMV situation…if you have good insurance, you don’t run into the problems and really if my insurance company isn’t going to double check the bill it pays, why should I do their work for them?

  15. ohhhh says:

    Just this week I asked about a discount for paying an ER bill right then in full, they gave me 20% off.

  16. Rick Sphinx says:

    If you don’t have insurance, be sure to ask the bill be re-done to what they would charge an insurance company, which is much lower than they usually charge a walk-in person, without insurance. Why should you pay more than what an insurance company pays. Try it!

  17. hankrearden says:

    …and more doctor/hospital-bashing in 3…2…1…

    Seriously Phil? Incorrect billing is indeed fraudulent, but is not the widespread dilemma it is made out to be. You may also want to take the time to compare it with billing errors for other “industries”. In addition, you can always request an itemised bill.

    I am so sick and tired of everyone whining about their medical care in this country.

    Why don’t you all go and spend 14 years of your life training and taking on $250,000.00 in school loans?

  18. scoosdad says:

    About this time last year our company instituted a high deductible insurance plan, which meant employees were now responsible for the first $2k of expenses. So I started getting itemized bills from providers that normally would have only been seen by the insurance company, not ever by me because they would have been paid in full by insurance. I went online and looked up their billing codes and what I found shocked me.

    My opthamologist was billing my insurance company (and now me) at every routine, twice a year exam for “followup treatment” of a small bleed I had in my retina. From 1994.

    They also billed for the use of their standard eye exam machine, the one where they put the different lenses in and out and then ask you to read the eye chart. OK, that’s fair. But billed per eye? Who gets only one eye examined?

    Before you think this was a small local doctor pulling this crap, this is a major Harvard-affiliated hospital in Boston. A call to the hospital’s billing manager with a followup letter copied to my insurance provider got all charges immediately waived in full. My second visit in 2011 was covered in full by insurance (I had met my deductible) so I never saw that bill, and I’m waiting now to see what this year’s first bill is going to look like after a recent visit.

  19. daemonaquila says:

    This misses a key issue for many people, who are not only overcharged, but given negligent care. A frequent example is a patient with a chronic illness like diabetes. She goes to the clinic, explains that her sugars aren’t well controlled, and she is having unpleasant side effects from her pills. A nurse practitioner (must avoid letting people see a real doctor!) says she’ll have to put a note in for the doctor; we’ll deal with this on the next visit. The next visit comes around, and now the patient sees a different NP, who is totally unfamiliar with her situation. There is no sign that a doctor was ever consulted. “Next visit, we’ll get this worked out with the doctor.” Next visit, same thing happens again – rinse, lather, repeat. While there have been no excessive individual charges, the patient still has the same problem months later, after multiple wasted visits. At least 50% of my clients report this happening to them, which has been at the root of a serious condition becoming disabling due to insufficient or incompetent medical care over a period of years.

  20. carbonero says:

    I am an EMT. I had to go in and get checked out when i had a sore throat. When I got the bill I noticed they wanted to charge me 60$ for a Pulse oximeter reading (which I do to every patient myself). All that is, is a device that is placed on the tip of your finger that instantly measures how much oxygen is in your blood. it takes about 5 seconds to use and when I contested it they took off the charge. I feel sorry for those who don’t know what all the (impressive but mostly useless) terms are!