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Navigating Medical Bills: Steps to manage costs and minimize debt

Unexpected medical bills can cost as much as $1,000 or more. Sometimes, these expenses are unavoidable. Still, you can take steps or ask questions of medical providers or your insurance company to avoid overpaying or getting saddled with charges you can’t afford to pay.

According to the Consumer Financial Protection Bureau, about $88 billion of outstanding medical bills showed up on consumer credit records in June 2021. This medical debt burdenaffecting 1 in 5 Americans — is likely even higher, since not all medical debt is reported to credit reporting agencies.

”About 58% of all bills in collections and on people’s credit reports are for medical bills,” said Berneta Haynes, an Atlanta-based senior attorney with the National Consumer Law Center. ”Medical debt affects a broad range of people, but certain groups are more affected than other groups.”

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“Young adults, low-income folks, Black and Hispanic communities are more impacted, as well as veterans and older adults,” she added.

Learning how to manage medical bills can minimize your chances of getting into debt, so CNBC talked to experts about how to keep health-care expenses under control. Here are some steps they say you should take: 

1. Don’t pay until you investigate

Medical bills are rife with errors. Numbers vary on this, but one study from Medical Billing Advocates of America estimates up to 80% of medical bills contain errors. 

Older adults, for instance, may have multiple insurance carriers — Medicare as well as private insurance —and ”that can lead to an increased risk of billing errors and inaccurate bills,” Haynes said. 

Also, be wary of collection notices. By law, debt collectors have to give people a letter or email with instructions on how to dispute the debt.

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“If it doesn’t, that’s certainly a red flag that they may be dealing with a scammer,” said John McNamara, principal assistant director of markets at the CFPB.

2. Get an itemized bill

3. Cross-check bills with an ‘explanation of benefits’

An “explanation of benefits” document comes from the insurer and may look like a bill — but it is not. The EOB outlines how much your health-care provider is charging your insurer, how much the insurer will pay and how much you have or may have to pay. This amount is usually your co-pay, deductible or any other balance due.

Contact your health-care provider if there are discrepancies between what the EOB says you should owe and your itemized bill. 

4. The new No Surprises Act should help

Historically one of the biggest causes of large, unexpected medical bills was a case like mine where an out-of-network provider was involved in your care — often at a hospital — without you realizing it.

About a month after having emergency surgery to repair a sudden, life-threatening brain aneurysm rupture several years ago, I received a “surprise bill” for care from a specialist in the operating room who was not in my insurance company’s network. A friend helped me appeal the charge, indicating I did not have a choice of who was in that room saving my life. Eventually, the insurance company paid the charge — but it took time and effort.  

Medical debt affects a broad range of people, but certain groups are more affected than other groups. Young adults, low-income folks, Black and Hispanic communities are more impacted, as well as veterans and older adults.

Berneta Haynes

senior attorney with the National Consumer Law Center

In 2022, a new law aimed at reducing “surprise bills” for emergency services went into effect. Under the federal No Surprises Act, excessive out-of-pocket costs are restricted and emergency services must continue to be covered without prior authorization, regardless of whether a provider or facility is in-network. Although that law is facing legal challenges, the Center for Medicare & Medicaid Services, or CMS, is still accepting consumer complaints. You can file a complaint here or call 1-800-985-3059.

5. Review billing codes

6. Verify a claim was submitted

You want to make sure the medical provider or facility submitted a claim under your current health insurance plan, especially if you recently changed jobs or insurers. 

If a health-care provider is considered “in-network” for your plan, then the provider has negotiated a discounted rate with your insurance company, so you’ll typically end up paying less by going to providers in your network than to an out-of-network provider.

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12 steps for managing costs, minimizing debt

2023-09-19 16:44:44

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