A Guide for Every Healthcare Patient: How to Avoid Surprise Medical Bills
Since founding Eligible in 2012, we have been fighting for Americans to receive the fair and transparent healthcare they deserve. In our new blog series, we will guide you through simple steps to become an informed and empowered healthcare recipient.
Maybe it’s the middle of the night and your child has a high fever. You might have just given birth to a beautiful baby girl, and are waiting for your visitors in the hospital. You may be busy trying to find out if the gym injury that keeps you up at night means you’ll need surgery… You might be driving your mom home from her first chemo treatment, experiencing a whole new level of love and responsibility.
Then suddenly, months later, you wind up with totally unexpected bills in the mail asking for much more money than you expected.
We’ve all been there: surprise medical billing is an epidemic.
In August 2018, the National Opinion Research Center (NORC) at the University of Chicago, a non-partisan research institution, found that 57% of respondents had received a surprise medical bill in the past year. The treatments for which the surprise bills came included physician services (53%), laboratory tests (51%), hospitals or other healthcare facility charges (43%), imaging (35%) and prescription drugs (29%). Not surprisingly, according to another study, from the Kaiser Family Foundation, approximately 40% of respondents received an unexpected medical bill in the past year.
Is this surprise medical billing nonsense really necessary?
For anyone not intimately familiar with the process, surprise billing has several causes. The one you’ve probably read about most is that health plans are narrowing their provider networks in order to control costs, which increases the likelihood that a patient may need to go out-of-network to see a specialist. Another well-known cause is when the hospital is in-network, but the practitioner, let’s say the anesthesiologist, is not a participant with the insurance plan. The NORC study cites 20% of all those surprise medical bills were the result of out-of-network issues.
Most shockingly, even as a fully insured patient, you are responsible for higher out-of-pocket health costs before insurance even kicks in.
This means even at a doctor’s office that is completely in-network and a service that is completely covered by your insurer, you are going to be paying more than you expected. The reason? In 2006, 80% of employer-sponsored health plans were designed for patients to pay a low co-pay. By 2018, that number has plummeted to less than 20%.
In other words, who “pays” for healthcare services has been flipped on its head!
Now 80% of employer-sponsored “covered” patients owe much more than just a simple co-pay for their healthcare treatments: you likely have some sort of complex mixture of provider contracts + co-pay + coinsurance + deductibles that determine how much you will pay for your healthcare. (Spoiler Alert: In article #2 of this series we will break down how to properly classify your current insurance benefit plan.)
In many cases, for particular healthcare services, 100% of patients — including you — will receive a surprise medical bill.
So that you have a fully confident understanding of this, here’s how the “complex mixture” plays out in the real world:
- You receive medical treatment or testing.
- The provider bills the insurance company, which reviews your claims, checks contracts that dictate how much providers are paid for your particular services, and issues the payment.
- The provider then sends you a larger than expected “surprise” bill looking to collect co-pay, coinsurance, and/or deductible amounts.
- If you ignore the bill, it gets sent to collections.
- If collections is unable to collect from you, it goes on your credit score (I know this because it happened to me on an $80 lab bill! More to come on that in article #12)
OK, now what are we going to do about it?
Is there any hope..?
YES! Patients should not have to sacrifice care due to their fear of surprise bills!
The advice articles that will be published in this series are meant to educate patients like you on how to AVOID such situations and arm you with the knowledge to help. Let’s keep your personal and financial well-being in tip-top shape together.
I hope you find this series useful.
Kindly,
Katelyn Gleason (k8)
CEO and Founder, Eligible
p.s. If at any point you feel unsure what a medical or insurance-related technical term means — which is so often why we’re confused about medical billing in the first place! — just hop over to OUR GLOSSARY where we listed all the vocabulary you’ll need to know what’s going on.
