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How to handle a surprise hospital bill

Tony Wagner and Marketplace Staff Nov 21, 2019
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Christopher Furlong/Getty Images

After a recent surgery, Jerilyn Arneson experienced an all-too-familiar nightmare: a surprise bill.

And not a small one, either — a bill of nearly $8,000. As Arneson started looking into it, she quickly discovered it was just a clerical error. Still, it took months to straighten things out with the hospital.

“I actually called my insurance company and they said, ‘no,'” she explained. “‘That’s a billing and coding error on their part, and you don’t owe that.'”

Luckily, Arneson does this professionally. She’s spent years in health care, and now does patient advocacy pro bono. That involves a lot of hunting down paperwork, benefits and other assistance programs patients didn’t know about or weren’t given access too. By asking the right questions and looking for discounts, she told us she’s been able to negotiate bills down from thousands, even hundreds of thousands of dollars, to almost nothing.

Our latest episode of “This is Uncomfortable” is all about a family navigating the health care system and negotiating costs. We called up Arneson to get some advice on what to do when you’re hit with a surprise bill.

Don’t panic, get a receipt

Too many people get freaked out and just pay, or worse, they ignore it.

“Most is patients, they don’t know what to do,” she said. “They literally put all of their bills into a drawer … they close the drawer and they don’t deal with it.”

The most important thing is getting your hands on an itemized statement. You may have to call multiple times, ask for a supervisor or show up in person, Arneson said.

“The hospital is most likely going to get defensive, you’re going to be met with resistance, but you can get it,” she said. “Don’t stop.”

All that effort is worth it because it gives you something to compare to the explanation of benefits you get from your insurance company. That will help you confirm what the hospital is charging your health insurance provider and compare it with what you owe.

Check their work

Here’s the thing: Arneson’s surgery bill wasn’t a fluke. Hospitals make a lot of mistakes. A study from the University of Minnesota put the error rate at up to 40%, and some advocacy groups say its much higher than that.

“There a lot of people who just are like, ‘I don’t want to mess with it, I’m just going to pay it and be done with it,'” she said. But when errors are that frequent and the bills are that high, it pays to fact check.

Errors can happen for all kinds of reasons: the automated billing messed up and no one caught it, someone accidentally scanned a barcode twice, or the hospital billed you as uninsured because they did not have your most recent insurance information.

Remember everything’s negotiable

Hospitals generally set their own prices, said Arneson. Even if everything is billed correctly, the price of a procedure could vary wildly at different locations, or the price of medicine could be inflated many times over.

Insurers are already negotiating a price with the provider, which you should see on your explanation of benefits. Arneson says there’s no reason a patient can’t negotiate, too. You just might have to harangue the billing department.

To get started, check the Healthcare Bluebook. It is to surgery what the Kelley Blue Book is to a used Subaru, guiding calculation of a “fair price” for a given procedure.

Ideally, Arneson said, you’d start this process before receiving care — especially if you’re uninsured. Once you’ve negotiated a price, be sure to negotiate a payment plan, too. Most hospitals won’t charge interest for two years but some will go even longer.

Stay calm and polite, but only agree to a monthly payment you can afford, Arneson said. Better to slowly pay down the total than miss payments because they’re too big.

Get some help

If you find an error during the negotiation, Arneson said you should ask the hospital to put the billing process on hold until it’s sorted out. Otherwise things can spiral out of control.

“That’s when you’re going to start getting past-due statements, that’s when it’s going to go to a collection agency, that’s when it’s going to go to court,” she said. “You could be disputing it for a year. And meanwhile, all of these collection actions are being taken against you.”

Many of the big-ticket bills Arneson negotiated down were due to paperwork that was improperly filled out, or assistance programs that weren’t initially available when the bill came through.

Many nonprofit hospitals offer financial assistance or work with charities that do. Others offer a discount for a cash lump sum paid upfront. It can also help to contact drug manufacturers, Arneson said, because they give away a lot of medication early on.

Cobbling together this assistance, along with availing of government programs like Medicaid, has helped Arneson reduce hospital bills by as much as six figures.

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