Understanding and Negotiating Your Medical Bills: Know Your Rights

Medical bills in the U.S. are notoriously difficult to decipher, with an estimated 80% of them containing errors that often result in consumers overpaying. This makes it essential to understand how to manage and challenge your medical bills to avoid unexpected financial burdens. With multiple parties involved, it’s easy for errors to occur, and without proper knowledge, it can be costly.

In this blog, we will cover everything you need to know about understanding and negotiating your medical bills, from identifying common errors to exercising your rights against surprise charges. We will also show you how to effectively communicate with your healthcare provider or insurance company to reduce costs and ensure you are not overcharged. By the end, you will be empowered to take control of your medical expenses.

Understanding Your Medical Bills

Medical bills in the U.S. are often complex and can be difficult to interpret without a clear understanding of how the system works. Several parties are involved in medical billing, each playing a role in determining how much you owe.

The Role of Insurance Providers, Healthcare Providers, and Billing Departments

In the U.S., medical bills typically originate from healthcare providers (hospitals, doctors, clinics). After treatment, the provider sends the bill to your insurance company. The insurer processes the bill based on your plan and covers a portion of the cost, leaving you with an "out-of-pocket" balance that can include deductibles, copays, or coinsurance. If you're out-of-network or there are discrepancies, you may face higher costs. The provider's billing department manages the remaining balance, sending invoices and offering payment plans.

Common Medical Billing Terms

Understanding key medical billing terms is essential when reviewing your bill. Below are some of the most common terms you will encounter:

• Deductible: This is the amount you must pay out of pocket before your insurance starts to pay for covered services. For example, if your deductible is $1,000, you must pay the first $1,000 of your medical costs before your insurance kicks in.
• Copay: A fixed amount you pay for a covered health care service, usually at the time you receive the service. For instance, you might pay a $20 copay for a doctor’s visit, while the insurance covers the rest of the cost.
• Coinsurance: This is the percentage of the cost of a service that you are responsible for paying after your deductible has been met. For example, if your coinsurance is 20%, and a procedure costs $1,000, you would owe $200 after meeting your deductible.
• Out-of-Network: This refers to healthcare providers or facilities that do not have a contract with your health insurance company. Receiving care from an out-of-network provider can result in higher costs because your insurance may not cover the full amount or may pay a lower portion.

The Complexity of Medical Billing

Medical billing can be complicated due to the many variables involved. Even if you have insurance, you may find that different parts of a service are billed separately, including the hospital facility charge, the doctor’s fees, lab tests, and more. Additionally, some services may not be covered by your insurance plan, or there may be confusion about what is considered in-network versus out-of-network.

This complexity underscores the importance of carefully reviewing your medical bills. Understanding the breakdown of your medical bills not only helps you manage your healthcare costs but also empowers you to challenge any discrepancies and negotiate better terms if necessary.

How to Read Your Medical Bill

When you receive your medical bill, it can feel overwhelming, especially if you're not familiar with how it's structured. A typical medical bill will include several key components:

• Patient Information: Your name, the date of service, and any insurance information related to the visit.
• Services Rendered: This section will list the specific treatments or services you received during your visit. For example, it might include charges for a doctor’s consultation, lab tests, or any medical procedures.
• Codes: Medical procedures are often represented by codes such as CPT (Current Procedural Terminology) and ICD-10 (International Classification of Diseases) codes. These codes correspond to specific treatments and diagnoses. It’s important to check that the codes listed align with the care you actually received.
• Dates of Service: The date(s) on which you received medical services will be listed. Make sure that these match your actual visit dates.
• Total Charges: This is the full amount billed for services before insurance payments or discounts are applied.
• Insurance Adjustments: Your insurance provider may adjust the charges based on your plan. This section shows how much your insurance covers and how much is left for you to pay.
• Patient Responsibility: This is the remaining amount you are responsible for paying after insurance adjustments, including deductibles, co-pays, coinsurance, and any charges for services not covered by your insurance.

Tip for Reviewing Codes and Descriptions: Cross-check the codes and descriptions on your bill with the services you received. If something seems unfamiliar or incorrect, it may be an error. For example, an incorrect procedure code could result in you being charged for a service you didn’t receive.

At Southeast Client Services, we specialize in helping individuals understand and dispute medical billing errors. With our expert support, you can ensure that your bills are accurate and that you are only paying for services you actually received. 

Now that you know how to read your medical bill, let’s explore your rights in medical billing to protect yourself from overcharges and surprises.

Your Rights in Medical Billing

Medical billing can often lead to unexpected costs, especially when you receive bills for services you didn’t anticipate. One of the most frustrating surprises for many consumers is receiving a "surprise medical bill." A surprise bill occurs when you’re charged for out-of-network services that you didn’t choose, often in emergency situations or at in-network facilities.

The No Surprises Act and Surprise Medical Bills

The No Surprises Act, which went into effect in 2022, protects consumers from surprise medical bills. It ensures that you are not charged more than your in-network rate for emergency services, even if the provider is out-of-network. This protection applies to situations such as:

• Emergency Services: If you receive care at an emergency department, you can’t be charged more than the in-network rate for emergency services, even if the doctor or other healthcare provider is out of network.
• Non-Emergency Services at In-Network Facilities: If you receive care at an in-network facility but the provider is out-of-network, the facility is prohibited from billing you more than the in-network rate for those services.

This law also extends to other situations where you may not have had control over the provider you were seen by, such as when an anesthesiologist or radiologist is involved in your care at a hospital or surgical center. Under the No Surprises Act, you’re protected from these additional out-of-network charges.

Identifying a Surprise Bill and What to Do

Understanding whether a bill is a surprise bill can be tricky, but there are clear signs. If you were treated by an out-of-network provider without your knowledge or consent, or if your emergency care was billed at out-of-network rates, it may be considered a surprise bill.  If you do receive a surprise medical bill, the Consumer Financial Protection Bureau (CFPB) recommends taking the following steps:

1. Confirm the Charges: Check the bill carefully to see if you were treated by out-of-network providers or received care that should have been covered under the No Surprises Act.
2. Appeal the Charges: Contact your insurer and provider to dispute the charges. If the bill is not corrected, you can file a complaint with your state insurance department or the federal government.

Your Right to ‘Good Faith’ Estimates

Healthcare providers are required to give you a ‘good faith estimate’ of your charges when you are not using insurance. This estimate should include the expected cost of the services provided and any potential out-of-pocket costs. This ensures that you are fully informed about the cost of your care before it’s provided.

At Southeast Client Services, we can help you understand and resolve any billing discrepancies, ensuring that you only pay what you’re legally required to. Now let’s explore how to negotiate your medical bills to reduce your costs.

Negotiating Medical Bills

Negotiating medical bills can seem daunting, but with the right approach, you can reduce your costs or resolve discrepancies. Understanding how to handle the negotiation process can significantly lower the burden of unexpected or incorrect medical bills. Here is the step by step process on how to do it:

Step 1: Review Your Bill for Errors

Before engaging in any negotiations, thoroughly review your medical bill for errors. Common mistakes include:

• Duplicate Charges: Sometimes, a service may be billed more than once, either due to a clerical error or a mistake in the billing system.
• Incorrect Insurance Information: If your insurance information was entered incorrectly, you could be charged more than necessary or for services that should have been covered.
• Unrecognized Charges: It's not uncommon to see charges for services you didn’t receive or that don’t match the care provided. Ensure that each charge corresponds to a service you underwent.

If you find any errors, be sure to document them clearly and prepare to address them with the healthcare provider or insurer.

Step 2: Understand the Charges

Understanding the charges on your medical bill is crucial to forming a foundation for negotiation. Review the breakdown to identify:

• What Was Covered by Insurance: Check what your insurance has already paid and what was covered under your plan.
• Out-of-Pocket Costs: Identify any remaining charges you’re responsible for, such as deductibles, co-pays, or out-of-network costs.

This understanding will allow you to challenge discrepancies and ensure that your insurance provider or the healthcare provider hasn’t overcharged you.

Step 3: Contact Your Provider

Once you’ve reviewed your bill and identified any discrepancies, the next step is to contact the hospital or provider’s billing department. When speaking with billing representatives:

• Ask for Clarification: Don’t hesitate to ask for an itemized bill that details every charge.
• Point Out Errors: If you’ve found errors, calmly explain them and request that they be corrected.
• Inquire About Discounts or Payment Plans: Some providers offer discounts for early payments or for patients who don’t have insurance. You can also ask about payment plans if the total bill is overwhelming.

Being polite but firm can often lead to better outcomes when negotiating with billing representatives.

Step 4: Ask for Financial Assistance or Payment Plans

If you’re unable to pay the full amount of your medical bill, many healthcare providers offer financial assistance programs or payment plans. These options may allow you to pay your bill in installments or qualify for reduced rates based on your income. If you qualify, this can help relieve some of the immediate financial pressure.

Providers may also be willing to waive certain charges, particularly if the services provided are deemed unnecessary or if your circumstances have changed significantly.

Step 5: Use a Medical Billing Advocate

Sometimes, the complexities of medical billing require outside help. A medical billing advocate is a professional who can help identify errors, negotiate on your behalf, and work to reduce the total cost of your medical bills. Advocates have the expertise to challenge overcharges and can often save you money by negotiating discounts, correcting mistakes, or even identifying opportunities for financial assistance.

Step 6: Negotiate with Insurers

If the billing issue involves your insurance provider, such as a claim denial or out-of-network charges, you can negotiate directly with the insurer. Many insurance companies will reconsider their initial decisions if you provide them with supporting documentation, such as medical records or a letter from your healthcare provider.

• Dispute Claim Denials: If a claim has been denied, find out the reason and ask for a detailed explanation. In many cases, claims are denied due to administrative errors or miscommunications.
• Challenge Out-of-Network Charges: If you received care at an in-network facility but were treated by an out-of-network provider, request that your insurer cover the costs at the in-network rate, as the No Surprises Act requires in many circumstances.

By being persistent and well-prepared, you can often turn around a negative situation with your insurer. At Southeast Client Services, we specialize in helping individuals navigate the complexities of medical bills, providing expert support to help you reduce costs and resolve discrepancies.

Now that you know how to negotiate your medical bills, let's understand the payment and credit options available to you.

Payment and Credit Options

When facing medical bills, it’s important to understand the payment and credit options available to ease your financial burden.

1. Setting Up No- or Low-Interest Payment Plans

One of the most common ways to handle medical bills is by setting up a no-interest or low-interest payment plan with your healthcare provider. Many hospitals and medical providers offer flexible plans that allow you to pay off your bill over time, sometimes without interest or with low interest rates. These plans can span several months or even years, depending on the amount owed.

2. Understanding Medical Credit Card Offers and Their Interest-Free Periods

Many healthcare providers partner with medical credit card companies, such as CareCredit, to offer patients the option of financing medical bills. These cards often come with interest-free periods, typically ranging from 6 to 24 months, depending on the provider and the amount financed. During this period, no interest is charged if you pay the balance in full by the end of the term.

3. The Risks of Deferred Interest and the Impact of Late Payments

While medical credit cards can be beneficial for managing medical bills, they come with risks. One major concern is deferred interest. If you don’t pay off your balance in full by the end of the promotional period, you may be charged interest retroactively, often at a high rate, on the entire balance from the original purchase date. This can add up quickly and result in a much higher total cost.

As you manage your payments, it's also important to be aware of your legal rights when dealing with debt collectors.

Legal Compliance and Collector Contact Limits

When dealing with medical bills, understanding your rights regarding debt collection is crucial to ensure fair treatment and protect yourself from potential harassment. Here’s what you need to know about debt collector contact limits and their legal obligations under U.S. law.

1. Rights Regarding Contact from Debt Collectors for Valid Debts

If you have unpaid medical bills, it's common for the debt to be handed over to a collection agency. While debt collectors have the right to contact you regarding valid debts, there are limits to how they can interact with you. You have the right to:

• Limit Communication: You can request that debt collectors communicate with you only in writing, rather than by phone. This request must be made in writing.
• Avoid Harassment: Debt collectors are prohibited from using threats, obscene language, or repeatedly calling at odd hours. They must act professionally and respectfully when contacting you about your medical bills.
• Dispute the Debt: If you believe the medical bill is incorrect or that it doesn’t belong to you, you have the right to dispute the debt. You can request validation of the debt in writing, and the collector must respond.

It’s important to recognize that while debt collectors have the right to contact you, they cannot engage in abusive or threatening behavior.

2. Legal Obligations of Debt Collectors Under the Fair Debt Collection Practices Act (FDCPA)

The Fair Debt Collection Practices Act (FDCPA) governs how debt collectors must behave when attempting to collect a debt. Under the FDCPA, debt collectors are prohibited from:

• Harassing or Abusing Consumers: This includes making threats, using profane language, or calling repeatedly with the intent to annoy.
• Misleading Consumers: Debt collectors cannot misrepresent themselves or the amount of debt owed. They must provide accurate information and disclose that the communication is an attempt to collect a debt.
• Contacting Third Parties: Debt collectors cannot discuss your medical bills with others, such as family members or coworkers, without your permission.
• Timing: The FDCPA also provides specific times when collectors are allowed to contact you. They are not permitted to contact you before 8 a.m. or after 9 p.m., unless you agree to it.

Being aware of your rights under the FDCPA and understanding the rules surrounding debt collector contact can help you avoid unfair treatment when dealing with medical bills. If you feel your rights are being violated, you can report the debt collector to the Consumer Financial Protection Bureau (CFPB) or your state’s attorney general.

Conclusion

Medical bills don’t have to be a source of stress. With the right tools and knowledge, such as understanding common billing terms, recognizing errors, and exploring payment plans, you can ensure that you're paying only for what you owe. By staying informed about your rights, you can tackle any challenges that arise and avoid being overcharged for medical services.

Southeast Client Services is here to help you understand and resolve any billing issues you may face. With our expertise, you can feel confident that your medical bills are being handled correctly, saving you time and money.

Contact Southeast Client Services today and let us assist you in managing your medical billing concerns efficiently.