I have insurance, so why am I getting a medical bill?
Know when to be concerned that you are being overcharged for your medical bill
A recent study was conducted on medical debt reports that nearly 1 in 4 Americans (23%) have medical-related debt. Additionally, it found that 98% of people who negotiated a medical bill, or at least inquired about it, received resolution. Unfortunately, this can be an intimidating process for some, especially if the person receiving the bill is not familiar with the medical claims billing process.
Before I dive into this discussion further, I want to point out that just like nearly every industry, the healthcare industry utilizes technology to assist with many processes, such as posting transactions to your account, submitting claims to the insurance company, posting claim payments and denials from the insurance company, etc. Additionally, it’s common for an insurance company to deny a service and put it to the patient’s responsibility if a claim is not submitted based on their unique policies and procedures. The reason that I want to bring this to your attention is because it’s helpful to know that it’s usually a computer software program that is making determinations on your claims, based on the rules and logic that have been created within the insurance claims processing system. Once the claim decision has been made by the system, the decision is submitted to the healthcare entity with either a payment and/or denial, which is then automatically posted to your account with minimal human intervention. Therefore, a provider’s office or hospital usually does not realize that there’s an issue with your claim until YOU, the patient, bring it to their attention.
So, what is a person to do when they receive a medical bill? Keep reading to learn steps that you can take before you pay that medical bill.
Step 1: Know your medical benefits.
If you have insurance, I recommend, when possible, that patients know their insurance benefits BEFORE they receive the service. However, unexpected medical needs happen all the time, so at least know the following key terms and what these amounts are when it comes to YOUR policy. You can usually obtain this information from the insurance company’s patient portal, or by calling the number on the back of the card. If your insurance is covered by your employer, your Human Resource department should also be able to help you.
Insurance Key Terms:
· In-network/ out-of-network: Determine if your healthcare provider and/or hospital is in-network. In-network rates are much lower and will save patients the most amount of money. If you go to an out-of-network provider or hospital, you can expect to pay substantially more for the same services that you can receive with an in-network provider/hospital. There is an exception to this, if you need to see a certain provider and there is not another provider within the same specialty within a specific radius from your home, then sometimes the insurance company will allow you to request an exemption. To do this, you will need to contact your insurance company and go through their formal process.
· Deductible: The deductible is the amount you pay before your insurance company picks up their portion. This amount starts over each year, usually calendar year. Usually plans have a different deductible amount for in-network versus out-of-network. Out-of-network deductibles are typically higher, in efforts to encourage you to use in-network providers.
· Co-insurance: This is the percentage amount covered by insurance after your deductible is met. An example is 80/20, this means that after your deductible is met, the insurance company will pay 80% and you will be responsible for 20%. Please note that the coinsurance amounts are based on the plan’s network-negotiated rate, instead of the typical amount that the provider charges.
· Copay: A co-pay is a fixed out-of-pocket amount paid for by the patient for covered services. Examples may include a $20.00 co-pay to see your primary care provider, $50.00 to see a specialist, $500.00 for an emergency room visit, etc.
· Out-of-pocket max: Out-of-pocket maximum is a cap, or limit, on the amount of money you have to pay for covered health care services in a plan year. Once you reach this limit, your health plan will cover 100% of your covered, in-network health care cost for the rest of the year.
This article is a part of a series. Next month we will be covering “Step 2: Reading an Explanation of Benefits (EOB)”, what are they and why are they so important when understanding how your medical claims are processed. Remember to sign up for our email list so that you can be notified when future articles are released.
Resources:
Lendingtree “As credit Reporting Agencies Remove Most Medical Debt From Credit Reports, Up to 45% of Americans Could Benefit” Nearly 1 in 4 Americans Have Medical-Related Debt | LendingTree
“Medical debt can be ‘a bit of a surprise,’ expert says- and 21% who have it owe $5,000 or more” Most adults with medical debt owe some of it to hospitals, study finds (cnbc.com)
Urban Institute “Most Adults with Past-Due Medical Debt owe Money to Hospitals” Most Adults with Past-Due Medical Debt Owe Money to Hospitals | Urban Institute
