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 burden — affecting 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.”
“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:
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.
“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.
If you receive a bill from a health-care provider or insurance company and do not recognize the charge or service, contact the biller to request an itemized list of services and providers of your care. You may be able to log into an online account and review a digital bill if you no longer get paper statements.
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.
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.
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.
If you believe you received a bill in error or your insurance company didn’t pay the correct amount, scrutinize the billing codes on the document. Your itemized bill will list current procedural terminology, or CPT, codes for medical services or treatments provided.
These CPT codes are used to describe health-care services and procedures and are used by health insurance and health-care providers. Ensure the services you received align with the CPT code on the bill. You can often look up what the code stands for online.
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.
Read More: 12 steps for managing costs, minimizing debt