When you get your first bill, realize that it may well be erroneous and/ or you that you may be able to negotiate a lower price. Professional  patient advocates frequently find overbilling errors in as much as 80% of the bills they review for their clients.

The first step you need to take after receipt of an exorbitant bill is to request an itemization of each charge on the bill. You have a legal right to an itemized bill from your provider that includes an explanation of each service provided and the proper billing code used for each charge.  Most bills are submitted simply with one aggregate number and you have to take the initiative of requesting this itemization to ensure that each charge accurately reflects what happened. Use the sample letter in the Resources section of this website to request this information

You are looking for specific codes that lay out the charges for physician services. Doctors and other types of providers bill with current procedural terminology, or CPT, codes. Hospitals use international classification of diseases , or ICD-10-PCS, codes for the procedures they bill. To understand each code, just Google the code number with the term “medical billing code” and read the descriptions. You can also consult the website www.medlineplus.gov, which is written in layman’s terms and published by the U.S. National Library of Medicine. Merriam Webster’s Medical Dictionary is also helpful.

The itemized invoice  that you should receive will show charges for each billing code that are like a manufacturer’s suggested retail price, or MRSP. Nobody is expected to pay those charges. Insurance companies are supposed to negotiate discounts off these list prices. Uninsured patients might be told to pay them, but they should always negotiate for a better deal.

The next step is to request and review your insurance company’s explanation of benefits (EOB) statement . For each service and its associated CPT code, the EOB should show , in columns from left to right, how much the provider charged, how much (‘allowed amount”) the insurer paid, and how much your coinsurance (‘copay’) amount is that you owe, which is usually a fixed price depending on the location of the  encounter. For example, the patient’s copay may be set at  $20 for a doctor’s office visit, or $50 at an urgent care clinic, or $250 at a hospital emergency room.

The next column lists your deductible, if any, before insurance policy benefits will be applied. Finally the last column , “Your Share”  shows the net amount you are expected to pay.       

Check the EOB to make sure the charges relate to services you actually received and that  they were accurately run through your plan. Call the customer service department whose number should be listed on your insurance card to report any charges for services not received and for help in verifying that charges for services actually rendered were accurately described and paid.  Next, exercise your legal right to obtain a copy of your medical records to see whether the services charged are actually documented in those records. If they are not, the charges cannot stand.

Exaggerating the complexity of services rendered is a common way that doctors and hospitals inflate the cost of care. Medical providers get paid more for each level of care they provide so there is a strong bias among industry vendors to overstate  their services. This is  called upcoding, which is using a ‘higher’ code than appropriate to describe the services actually done, such as using the favorite CPT code 99283  to bill a comprehensive head to toe exam that also involves  taking a detailed medical history of the patient with decision making of moderate complexity. But if that detailed physical examination and interrogation did not happen you need to speak up. Patients can contest the bill to the hospital or other provider and also reach out to the specific doctor involved and ask for an adjustment of the bill.  Then the bill can be resubmitted to the insurer for proper  and lower payment.

Also, you will want to make sure that your insurance  company did not pay, and leave you stuck with an  unpaid balance , for any improper claims.

Insurance companies autopay almost all the bills that come in from doctors and hospitals. They do not typically examine whether the  care was appropriate. They merely check to see if the medical biller accurately completed the claim form, by including the right patient information and diagnosis and procedure codes and other details to explain what happened. This lack of scrutiny allows billing errors  and even fraud to run rampant, because insurance companies often treat the doctors and hospitals as their customers , not their patients. The insurance companies need to keep the clinicians happy so they will stay in the insurer’s network. If medical facilities and providers overcharge the insurers, so be it. The carriers can just raise the premiums the next year to make patients fund whatever money they need.  

The lax claims processing by carriers can lead to other costly mistakes. For example, under the Affordable Care Act all insurance plans are required to cover, at no cost to the patient, certain preventative services for adults, such as vaccines, breast cancer screening , and colorectal screening. The services should be coded as preventative and the insured patient should pay nothing , even if they have not met their annual deductible. However these services often do not get coded as preventative , which means the costs get passed on to the patient. We as healthcare consumers must be vigilant in catching these mistakes ourselves.     

Next, use pricing resources such as Healthcare Bluebook (www.healthcarebluebook.com)  and Fair Health Consumer (www.fairhealthconsumer.org) to check whether the prices being charged for each CPT coded service  are fair. The HealthcareBluebook.com website gathers payment information from employers who fund their own health plans and publishes what it calls a fair price for a service or procedure. The FairHealthConsumer.org   website does something similar but its data shows  what insurers pay. If  you have the itemized statement with the billing codes you can plug the codes into each website to get a price comparison. It also may be possible to get the Medicare  price for your procedure in your area of the country  and use that as your target price in negotiating any cash settlement, although bear in mind that providers are always looking to get something more than that from their non Medicare patients.  Also, check the hospital website to find the cash  price it may post there for your particular procedure. Your goal in gathering all this comparative price data is to establish what the medical industry calls the UCR, which is the usual, customary and reasonable price for the procedure or services in question, and then to use that UCR, which ideally should be something close to the Medicare price ,  to argue that the bill you received is unreasonable.       

If your appeal to the specific doctor involved  to  reduce  his bill does  not work, then take all the research you have compiled and send it with your request for bill reduction to the CEO of the hospital or director /chief managing officer of the physician group or other medical provider you are dealing with.   

You can also ask whether your provider has a financial assistance policy. All nonprofit hospitals are required as a condition of their nonprofit service to demonstrate some level of community service and philanthropy, while most for profit hospitals advertise that they do as well. Such financial aid   could result in a sliding scale discount based on your income. Many people qualify, and discounts can range from 20 %to 90 % .  For example, a family of five making $100,000 could qualify for up to a 90% discount at some hospitals, depending on the size of the bills compared with the aggregate family  income. Thus even if you make good money you may be eligible. A prompt payment discount may also be feasible if you are able to pay a negotiated reduced bill as a lump sum payment.   If you are covered by your employer’s self funded plan, in which an insurance company’s role is limited to being only the plan administrator, your  employer’s human resources department may be able to help you in negotiating the bill down to an amount you can afford, assuming that any such payment would be coming out of your pocket as part of your deductible.   

Many  appeals are successful  by  these methods. However  if you are still unable to get  reconsideration and reduction of  egregious charges for services not rendered, you can consider telling the doctor involved that you are considering filing a complaint against his or her medical license with your state’s medical licensing board if the charges are not corrected.

You can also consider reaching out to other patients who have challenged excessive medical bills. Do a search on Facebook for groups dedicated to fighting back against the high cost of health care. Often anyone can join and post a question or offer a solution as to how to handle a bogus or excessive bill. People can find encouragement and support in resources on Facebook  such as the Patient Safety Action Network Community .