There’s a medical debt problem in America, and hardly anyone is talking about it. Chances are it affects someone you know: About 1 in 5 American adults will be contacted by bill collectors about medical debt this year.
Medical debt accounts for more than $1 in every $3 owed in collection accounts, far more than all other types of debt in collections. Once any bill goes to collections, it starts to hurt your credit rating, no matter the source of the debt.
Almost all of us will become sick or injured, but we don’t have to contribute to those statistics. The best way to prevent a blow to your credit or even personal bankruptcy due to medical bills is to keep them out of collections. Even those who don’t have the resources to simply pay off the bill right away can head off such a damaging outcome.
Medical bills are negotiable, both with the hospital and your insurance provider. In fact, there’s a whole industry of experts trained to spot errors in medical bills and negotiate them down to a reasonable rate. They’re called medical billing advocates, and they help consumers navigate health care pricing that has no set standards and billing practices wrought with errors. Medical billing advocates recommend the following best practices for negotiating medical bills.
1. Be a great record keeper.
In addition to keeping your own medical records, you should take note of everything that happens after your treatment. This means keeping your bills and insurance paperwork organized, as well as tracking your phone calls with billing staff.
“When talking to someone about medical bills, get their name, location and a call reference number every time,” says Beth Morgan, president of Medical Bill Consultants, LLC. “Tell them you need it so you can follow up, and keep your word.”
This goes for medical billing staff and health insurance customer service staff as well — all should be able to provide a reference number for the call. Keep those reference numbers handy so you can follow up in two to three weeks, which is the time frame, Morgan advises.
The most important part of good record keeping, however, is getting the right bill in your hands in the first place. “Always call the billing department to get an itemized statement,” Morgan says. Even though you’re entitled to a statement with every single charge on it, you’ll probably have to request it specifically. “Normally they send you a summary bill that just lists one amount owed, but they have to give you an itemized one if you ask.”
Read: [3 Financial Reasons You Should Keep Copies of Your Medical Records]
2. Know your stuff.
Arming yourself with your insurance information and fair pricing for charges gives you a leg up over most consumers when it comes to negotiating medical bills. For starters, how are you going to negotiate charges if you’re not even sure what a reasonable rate is?
“You can find out what is a fair and reasonable rate for a procedure in your area by checking websites such as Healthcare Bluebook or FAIR Health, Inc.,” says Maureen Lamb, CEO and founder of Medical Bill Support, LLC. Both are free resources that track procedure prices across the nation and can give a fair rate estimate for your area.
But it doesn’t stop there. When it comes to insurance coverage, make sure you understand your policy well. “Before you negotiate, read your insurance policy and know your deductible,” Morgan says. By knowing your insurance policy details, including co-pays and coinsurance, you can quickly pinpoint which charges should be covered by your insurance.
Once you’ve educated yourself, you can go through the bill to find what your insurance didn’t cover but should have. At this time, check through that itemized statement to make sure everything on it is legitimate, and that you weren’t billed for a drug or procedure you didn’t have. This type of billing error is just one of many; check out this guide for details on other common billing mistakes.
[Infographic: How to Read Your Hospital Bill]
3. Don’t procrastinate.
While you shouldn’t pay a bill without scrutinizing it for errors, don’t waste any time. “Providers and hospitals are quick to send unpaid bills to a collection agency that can hurt a patient’s credit report,” Lamb says. “It’s much easier to resolve a problem or negotiate a discount before a bill goes to collections. Once the bill goes to collections, it will be difficult for the provider or hospital to help you.”
In some cases, it will be impossible. After bills are turned over to collections, they’re handled by a third party, a company that has bought your debt. When the bill has been sold, the hospital or medical center has often washed its hands of the issue and won’t work with you on that bill any longer. By then, your credit has been damaged.
Read: [3 Myths and 3 Truths About FICO 9]
4. Consider all payment options.
If you’re able to take funds from a health savings account or flexible spending account to cover the cost of care, you may be eligible for a prompt pay discount. “This generally requires you to pay your bill in full within a certain time period,” says Lamb, and in many cases is worth a sizeable discount — up to 50 percent — but you have to ask.
“If you cannot afford this option, you can ask about payment plans or financial assistance that your provider or hospital offers,” she notes. Indeed, most hospitals offer financial assistance to lower-income families. Additionally, the patient services desk at your hospital may have a list of local and national charities that offer help with medical bills.
Read: [Can You Afford Your Cancer Care?]
5. Recognize when you need help.
Especially when time is short and credit is on the line, the stakes are high. Not everyone has the time or energy to spend fighting a massive bill for a long hospital stay. What’s more, many cases are so complex they require a professional to get it done right.
If you or a loved one has a hospital bill that’s on the verge of becoming medical debt in collections, it’s probably worth the cost to hire an advocate. Turning over your case to an advocate might stop the clock on the ticking time bomb — that bill. To know for sure, make an appointment with an advocacy group like Morgan’s or Lamb’s — many offer free consultations. Normally they’ll look over the bill and tell you whether they can help, plus give an estimate of charges. Here’s a directory of billing professionals to get you started.
Read: [Socked With an Out-of-Network Medical Bill?]
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5 Expert Tips for Negotiating Your Medical Bills originally appeared on usnews.com
