Medical bills represent a major financial challenge for many families. You can’t always prevent or foresee medical bills, even if you have insurance. By understanding how to check your medical bills for possible errors, you may be able to avoid being overcharged and making unnecessary payments.
How Common Are Medical Billing Errors?
It’s difficult to know what a medical procedure will cost before it’s performed. So, without being sure of the cost, it’s also difficult to know if there is an error on your medical bill. It doesn’t help that the language used on medical bills is not easily understood. It can be hard to spot mistakes when you aren’t clear about what you’re looking for.
The Centers for Medicare and Medicaid Services last year found a 7.46% improper billing rate for Medicare providers last year, which accounted for $31.46 billion in overpayments. And according to a survey conducted by the Kaiser Family Foundation (KFF), 53% of adults who have health care debt — and 43% of all adults — say they’ve received a medical bill they believe contained an error.
With medical bills so complicated and medical errors so prevalent, it’s no wonder that the amount of medical debt in the U.S. is so high. According to KFF, in June 2022 an estimated 17% of Americans had medical debt in collections. Medical debt is the largest source of debt in collections and has increased to $140 billion since 2009.
What Are Some Common Medical Billing Errors?
When medical billing inaccuracies emerge, they can either be purposeful or genuinely accidental. Either way, there are some frequent errors you may want to keep an eye out for.
Was the Bill Sent to Your Insurance Company?
If you have insurance, making sure your provider submitted a timely claim to the insurance company can be a good first step to take. Occasionally, providers may neglect to send the bill to your insurance company at all and charge you for the entire amount.
Your claim could also be denied if the provider didn’t have the right insurance information for you — even if the ID is off by just one digit. You’re already paying an insurance premium, so paying for the entire procedure out-of-pocket could boost your overall medical costs.
Were You Charged for Services You Didn’t Receive?
You may have to ask for an itemized list of all the charges in your bill, but verifying that you are only being billed for services or treatments that you actually received may be wise.
You may also want to confirm that the quantities are also correct — so you’re not being billed for two MRI scans when you only got one. The itemized bill should include prices, so checking that no extra zeros were added by mistake may be a good step in this process.
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Was the Wrong Billing Code Used?
If your insurer denies coverage for a procedure or medication, you may be able to identify the correct billing code and request that the provider refile the claim. If you have questions about the codes used, checking with the medical provider and insurer may save you some research time.
One type of billing code error is known as upcoding. This is when the provider bills for a longer session than was provided (for example, being billed for a 60-minute session when you were only seen for 15 minutes). Another common error is known as unbundling, which refers to using codes for each component part of a procedure rather than a single code that covers them all.
Appealing an Insurance Denial
If you find an error during your hospital bill review, you may be able to file an appeal with your insurer if the charge was denied and you were billed for it. Appeal instructions can usually be found on the explanation of benefits received from your insurance company. Documentation to back up your appeal, such as medical records, can often help strengthen your case. The Patient Advocate Foundation offers a detailed guide to the insurance appeal process , including a sample letter.
There is usually a time limit to submit an appeal to an insurer, which can range from just 10 days to 180 days, depending on the insurer. Insurers may provide a decision within 60 days. If you disagree with the decision, you can ask for an independent review — your insurer should provide you with information on how to do this.
If your appeals aren’t successful, you may wish to turn to one of several advocacy groups. For example, the Patient Advocate Foundation offers one-on-one assistance at no charge, and its website also lists organizations that provide help for people with specific conditions. People with Medicare can access free counseling through the State Health Insurance Assistance Program.
If you’re still stuck, hiring a medical billing advocate to represent you may be helpful. These professionals typically charge an hourly rate or take a percentage of the money they save you.
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What Are Some Options for Paying Off Medical Bills?
Even if you find errors in your medical bills and are able to resolve them, chances are this won’t eliminate what you owe entirely. Here are some ways you can approach paying off medical debt:
Negotiating a Reduced Bill or Payment Plan
Even if your bills don’t include any mistakes, they aren’t necessarily set in stone. If you’re having trouble making a payment, calling your provider’s billing department and explaining your situation may be the best first step to take.
Some may be willing to negotiate your medical bills, possibly lowering your fees if you make the payment in cash or in a lump sum.
You may be able to gain additional leverage by asserting, politely and accurately, that the provider charged an unfair rate, bolstered by research on average prices in your area and what Medicare allows for the service.
Even if you can’t get your payment reduced, you may be able to extend the due date. Many providers and hospitals will work with you to set up an affordable payment plan, sometimes without charging interest.
Budgeting for the Unexpected
Medical bills can pack an unexpected punch to an already tight budget. If you’ve already used some of the strategies listed above to reduce what you owe, it might be necessary to reduce expenses or increase income while you pay medical bills.
Taking a look at current spending is a good place to start. Determine whether there is nonessential spending that could be put toward what is owed.
If there is absolutely no wiggle room at all, you might consider increasing your income by taking on a side hustle or asking for a raise. Once you find a way to include medical payments into your budget, using a spending tracker could be a helpful way to make sure you have the funds available each month.
Using a Credit Card
Paying medical bills with a credit card is certainly an option. It might be a quick and initially easy option, but it might not be the best. Credit cards typically charge high interest rates, which could make your medical debt larger over time. One solution might be to look for a no-interest credit card.
You’ll also want to create a debt reduction plan so that you can pay the balance in full before the promotional period ends.
Taking Out a Personal Loan
A personal loan can be a smart way to pay off medical debt. This type of loan is typically unsecured, meaning you are not putting your home or any other asset on the line.
A personal loan can be used for many purposes, including paying off medical bills, but typically comes with much lower interest rates than credit cards or payday loans.
Note that you can use a personal loan calculator to see how much interest you could save by using a loan to pay off a credit card.
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The Takeaway
Taking time to review medical bills and making sure there are no errors can save time and money in the long run. Understanding medical bills and the insurance appeals process — if that’s a step you have to take — can be confusing, so getting assistance is sometimes helpful.
Keep in mind that even if you’re able to resolve the medical billing error, you may still owe money. There are different strategies for paying off medical debt. You may decide to try negotiating a reduced bill or setting up a payment plan with your provider. You could try removing nonessential items from your budget so you can pay off your bills. A credit card is another option, as is taking out a personal loan.
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