What Do I Do if I Get an Unexpected Medical Bill?

It’s bad enough when you get bad news from your doctor, but sometimes the drama doesn’t end there: You open your mailbox and get another “surprise” in the form of an unexpected medical bill.

There are plenty of reasons you could end up paying unexpected bills. For example, if you haven’t met your insurance deductible for the year, your health plan won’t cover all of your costs until you do. Or perhaps you didn’t get prior authorization from your insurer that was required for treatment. Another issue could be that you received treatment at an in-network facility but were billed by an out-of-network provider who was on duty at the time, such as a radiologist.

If you get an unexpected bill, you have two important calls to make.

1. Reach out to your insurance company. Call the member services phone number on your insurance card. Find out what they paid, and ask why the bill wasn’t fully covered. Take detailed notes, including representatives’ names and reference numbers. This creates an official record of your dispute. Follow up with an email summarizing the call to create a paper trail; you can ask for the email of the representative you speak with or send a letter to the insurance company’s email address designated for claims inquiries and disputes.
2. Contact the provider who sent the bill. Have them explain the charges. Ask for an itemized bill and review it for errors and duplicate charges. “There are likely mistakes. Half of medical bills have errors,” says Caitlin Donovan, the senior director of the Patient Advocate Foundation in Hampton, Virginia. As with the insurer, follow up with an email summarizing the call for your records; you can email the person you speak with or send a letter to the email designated for billing issues and disputes.

Donovan says to never pay any bill until you get your explanation of benefits (EOB) from your insurer, as it shows you what was covered. “If your bill doesn’t match up with the EOB, you’ll know something is wrong,” says Donovan.

Often if something isn’t covered, it’s because the provider or the facility was out of network. If you’re insured, however, there are some protections, so you won’t find yourself paying for all of the unexpected bills.

“If you received an unexpected bill from an out-of-network provider, check to see if the No Surprises Act (NSA) might protect you from having to pay,” says Louise Norris, a health policy analyst with HealthInsurance.org. “This [federal] law applies to most health policies, prohibiting unexpected bills from out-of-network providers in emergencies or situations in which the patient was treated by an out-of-network provider at an in-network medical facility.”

She says if the No Surprises Act applies to your situation and you shouldn’t have received a bill, reach out to the medical provider’s billing department and your health plan to resolve the issue.

Know that some services, like ambulance transportation services, are not protected by the NSA. Even if you don’t have health insurance, the NSA requires providers to give you a good faith estimate of how much your healthcare will cost if you request one, or they should schedule services at least three business days in advance.

“In my experience, about 60 percent of hospitals will reduce bills by 25 to 40 percent if you simply ask and show even a modest financial need,” says Andrew Lokenauth, a financial adviser and the founder of TheFinanceNewsletter.com, based in Tampa, Florida.

Be sure that you owe as much as they say you do, and review an itemized bill. “I found a $3,000 charge for medication that my client didn’t receive. The billing department fixed the error,” says Lokenauth. “I've seen countless cases where hospitals accidentally charge the uninsured rate ($1,500 for an MRI, for example) instead of the negotiated insurance rate (around $400). That's an easy $1,100 saved right there.”

One strategy that works is offering to pay a lump sum immediately in exchange for a discount. “Most billing departments have the authority to reduce bills by 20 to 30 percent if you pay right away. I’ve even seen some agree to 40 percent. They’d rather get paid something than nothing,” says Lokenauth.

In his experience, the key to negotiating is to act fast. “The longer you wait, the fewer options you’ll have,” he says. “Whatever you do, don’t let medical bills go to collections without trying to negotiate first — that can wreck your credit score for years. Remember, everything’s a negotiation: lab fees, facility charges, medication costs.”

Lokenauth advises to get everything in writing. “Verbal agreements mean nothing in medical billing. Make them email you any promised discounts or payment arrangements,” he says.

Determine how much you can afford to pay monthly, and offer to pay that amount. Also inquire about an interest-free payment plan.

See if the provider has a financial assistance program, and apply for aid. Nonprofit hospitals are required to have them. Many hospitals also have financial assistance programs with sliding scale fees based on income.

“Some nonprofit hospitals offer retroactive charity write-offs within 180 days of service if your income qualifies. You must request the application [for the write-off] directly from patient services,” says Kiara DeWitt, RN, a pediatric neurology nurse at Cook Children’s Medical Center in Fort Worth, Texas, whose patient advocacy efforts have included helping to decode insurance denials and navigating billing misfires.

You can also ask to pay the Medicare price. “It’s likely significantly lower than what uninsured patients are charged,” says Shah.

Find out if your healthcare provider has a plan-sponsored advocacy program that offers negotiation assistance. Legal aid services and medical billing advocates can intervene for low-income patients.

You may also apply for medical financing through low-interest programs like Care Credit, says DeWitt, “but only after exhausting direct negotiation and assistance channels.”

Ask your employer if they have an employee health stipend that can be used to reimburse you for the remainder of what you owe. Health stipends are taxable benefits that allow your employer to reimburse you for medical care costs. Because employee stipends are taxable, there are fewer restrictions on which benefits are eligible for reimbursement and who is eligible for the benefit. One caveat: You’ll be taxed on the reimbursement amount, and it will appear on your W-2 as income.

• A surprise medical bill can be just as stressful as whatever ailment you’re dealing with, but there are laws and programs to protect you.
• Call both your insurance company and the provider who sent the bill to see if all charges are legitimate. Ask them to explain the charges, as well as why certain things were not covered.
• Negotiate to see if you can get the bill lowered or, if necessary, to set up a payment plan. Negotiation is normal and often successful. Seek help if you need it.