How to Survive Your Medical Bills

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For most of us, health care bills are a mystery – riddled with confusing language and mysterious costs. Lifescript asked health insurance insider, Nicholas A. Newsad, a patient advocate who has worked as a biller, to decode complex medical statements for us. In this excerpt from his book The Medical Bill Survival Guide , get his expert tips for dealing with any billing department, especially if you’re behind...

Carol was 50 years old and hadn’t been to a gynecologist in 25 years. She had chronic pain, but refused to see a physician. One day the pain was so unbearable that she toyed with the idea of going to an urgent care, but figured she might save a few dollars by first talking to her nurse sister-in-law, Maggie. Maggie was appalled and immediately had Carol admitted to a hospital. This saved Carol’s life, as she would have been dead within a few hours.

Over the next two years, Carol would have multiple major surgeries, oncology treatments and intensive-care stays. She would lose more than 50 pounds and all of her hair. She would have her colon detached, reattached and detached again, forcing her to wear a colostomy bag for the rest of her life. She would also have a major relapse and remain comatose for more than 10 days after an emergency surgery.

Though Carol was insured, she stubbornly considered declaring bankruptcy to wipe out the tens of thousands of dollars of deductibles, copays, and co-insurances she owed. I learned she was screening her calls so she wouldn’t have to talk to billers and she became angry and vulgar with those who did get through. She had ignored her financial problems in the same way she had ignored her disease, and made virtually every wrong decision possible along the way.

Despite the fact that she had ignored her bills for the better part of a year, I spoke to more than 10 of Carol’s providers about her situation over a six-week period and was able to eliminate the vast majority of her obligations. Her largest debtor, the hospital, ultimately waived 70% of her account balance because of my calls.

I’m not in a secret club, and there’s no secret password. All of the things I said to Carol’s billers can be learned by anyone.

In my experience, anxiety and frustration can be cured 100% of the time by education. I’ve seen your problems many times from both sides of the desk, and I’m going to show you how to take care of them.

What “Charges” Really Mean in Healthcare
When you get a bill from a healthcare provider, there will be a line near the top called “charges” or “facility fee.” It will be a big number, and this is what scares most people.

Carol developed tunnel vision and only saw the numbers at the top of her bills. This is why she was in such a hurry to declare bankruptcy. This is a wrong way of thinking.

I’ll use an analogy to explain why we do this. Let’s compare an MRI scan to getting a new transmission for your car.

If 10 different people take their car to the same body shop to get their transmission replaced, they’re all going to pay the same thing. Let’s say that bill is $900. Even though some will pay by check, some by cash and some by credit card, they will all pay $900.

However, if ten different people go to the same hospital to get an MRI scan, their insurance companies are all going to pay different amounts and the patients are all going to pay different amounts. This is because:

  • Insurance companies get “volume discounts” for the number of enrollees they cover. The more enrollees they have in their plan, the cheaper prices they can negotiate with healthcare providers.

    Providers will agree to lower rates, if being in the health plan means more patients will come see them. So a big insurance company like United Healthcare may negotiate a price for an MRI at, say, $1,000 while a smaller insurance company like Union Pacific Railroad Employee PPO might pay, say, $1,700 for the same MRI.

  • Also, employers select different benefit plans within each insurance company based on what they can afford. Patients at Company A and Company B may both have United Healthcare insurance, but the patients at Company A could have a 20% coinsurance for an MRI while patients at Company B may have a 60% coinsurance for an MRI. This is purely a function of the plan your employer chooses.

    Because there’s no standard fixed price for medical service (like there is for transmissions), everybody pays something different. What’s worse is that what everybody pays changes every year because employers, providers and insurance companies renegotiate every year. It’s a real mess.

    Providers don’t want to keep 1,000 different price lists for all the different insurance companies, health plans and employers. So what they do is keep one list, with very high “sticker prices,” and just keep track of the 1,000 different types of discounts they have to apply to get down to the rates they agreed to in their contracts. These sticker prices are called “charges” or “facility fee,” and that’s all they are – sticker prices.

  • Providers may also provide a discount if you can demonstrate hardship.

    Billers are always trying to discern the difference between those who are unable to pay and those who are unwilling to pay. The more certain they are that someone is unable to pay, the more likely they will set up payment plans, give discounts and waive balances. The more certain they are that someone is unwilling to pay, the more likely the account will go to collections.

    Not-for-profit hospitals have to provide charity medical care in the form of free care and write-offs or the IRS will slap huge penalties on them. And because so many physicians are becoming employees of these not-for-profit hospitals, the same rules are starting to apply for physician bills as well.

Five things billers look for
1. Does this patient take and return our phone calls? You want the biller to view you as responsive and cooperative. Conversely, you absolutely don’t want to be viewed as non-responsive and uncooperative. If you have a message from a biller, return the call, even if it’s just to tell them that you need time to understand your bills.

If you see your biller’s number on caller ID, answer the phone. Don’t ignore the calls hoping they’ll go away – they’ll just get worse.

2. What do the notes on the account say? The notes on your account can save or destroy your chances to get a break. The best advocates you’ll have are the positive comments from another biller. Things like “called back promptly,” “good demeanor” and “called to verify payment received” are all positive things to have on your account notes.

3. Has this patient been uncivil or caused problems in the past? Getting angry on the phone will get you sent to collections. Insulting the biller or being sarcastic are completely counterproductive and will hurt you.

As a medical facility manager, I would never give a break to someone who was uncivil, mean or vulgar to one of our billers. I remember a story that perfectly exemplifies this effect:

A patient I’ll call George had recently had a catastrophic medical episode and had spent several nights in the hospital.

After he was sent home for several weeks, he came to our facility to have a follow-up outpatient surgery. George’s wife received their first bill and promptly sent a payment for half of their coinsurance amount. Within a few days, she received two more statements from us, and neither had noted her payment.

George’s wife was furious. She called one of our billers, a little old white-haired woman named Patty, and berated and insulted Patty until she was in tears for “being incompetent and working at such an (expletive) place.” Patty was devastated, from being both overworked and underappreciated.

Meanwhile, the facility I worked for was having a very challenging year and had just lost several employees to an aggressive competitor that was hiring them away. The company was understaffed, and many of the personnel were working overtime to try to post payments to patients’ accounts that were several weeks old.

What had happened to George was that after his service, our system generated a bill and mailed it to him. Several days later his insurance company paid. This triggered an “activity” and generated another statement. A few days later marked 30 days since his service, causing another statement to be automatically generated and mailed. All the while, our company was behind in posting her payment to the account.

I was happy to learn that George’s wife called back shortly, also in tears, and apologized profusely to Patty. She and George had been through a horrible ordeal, and she was emotionally exhausted from trying to sort through the hospital bills. Our little error was simply the straw that broke the camel’s back.

In calling back and explaining her frustration, George’s wife completely absolved herself. We were not going to send her to collections anyway, but I think this example perfectly illustrates the situation in which we often find ourselves.

4. Has this patient made an effort to pay his or her bills? How many days delinquent is the account? The key word here is “effort.”

Has the patient made any effort at all? A patient who has sent in $15 each month for four months on a $300 account is going to get better consideration than someone who has paid zero per month.

I was more aggressive than most billers in that I wanted all accounts paid within six months. I would usually allow “micropayments” the first few months if the patient would agree to a balloon payment at month six. Most billers will allow payment plans greater than six months. As a patient advocate, the longest payment terms I have ever gotten for someone was two years.

5. Has this patient followed an agreed-upon payment plan? If you get the biller to agree to let you make payments, it’s crucial that you not miss any. There’s an implied contract when you enter a payment plan: The provider has waived its ability to collect the full amount due immediately as long as you make your payments on time. Once you miss a payment, this implied contract is breached and they can call the full amount due immediately.

If you think you’re going to miss a payment, I strongly recommend that you call the provider before the due date and let them know.

Adapted with permission from The Medical Bill Survival Guide: Easy, Effective Strategies for People Experiencing Financial Hardship by Nicholas A. Newsad (Westminster Cambridge Conglomerate). For more information on medical bills, insurance benefits, paperwork and other topics, visit

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