For most Americans, healthcare is a top personal and financial priority. Unfortunately, provider billing mistakes combined with the skyrocketing cost of healthcare services, health insurance premiums and prescription drugs can create real financial concerns. The good news is that there are ways to keep your medical bills in check. (To begin with the basics, read How To Choose A Healthcare Plan.)
Choosing Providers and Pricing
According to the U.S. Census Bureau, the majority of Americans (nearly 86%) have health insurance coverage to pay for the majority of their healthcare services. However, even if you have health insurance, you can still comparison shop for healthcare just like any other purchase. Here are some tips on how to choose a provider and a price before getting socked with unexpected or larger-than-expected bills.
1. Use in-network care providers. If you have a PPO (preferred provider option) health insurance plan, your insurer will pay for the majority of the cost (minus your co-pay) when you use a doctor or hospital that is part of the insurance company's preferred network of providers. If, however, you use a doctor or hospital outside the provider network, you will have to pay a larger portion of the bill. PPOs typically pay only up to 70-80% of expenses incurred outside the network.
2. Research service costs online. With Americans having to pay for more of their own healthcare costs, third-party health "infomediaries", organizations that advise consumers about treatment and provider options, are coming on the scene. The approximate costs for medical services are available online from a number of locations, including: consumer websites (such as HealthGrades.com and The Leapfrog Group), individual hospitals and insurance companies, and even the federal government. When you receive a diagnosis or recommendation for a procedure, do a little online research to become a more informed customer.
3. Ask for the cost of the procedure/service. You might be surprised to know that you can ask your doctor to give you an estimated cost for a procedure or service before scheduling an appointment.
4. Ask about options. Ask your physician if all the recommended tests or procedures are medically necessary, especially if you have to meet a high out-of-pocket deductible or co-pay.
5. Ask for a discount before securing services. It is possible to negotiate a lower price for healthcare services, particularly if you are seeking a procedure or treatment offered by numerous other providers in your area.
6. Seek out a local healthcare advocate. Professional healthcare advocates can provide you with information about local care options, help you obtain care and resolve billing issues with your insurance company and/or healthcare providers.
7. Pay in cash. While doctors might pull down some impressive yearly incomes, their offices are typically cash-poor. Doctors' offices will frequently discount bills for patients paying cash because it eliminates their need to file insurance claims and pay credit card transaction fees.
Trim Prescription Drug Costs
There are several ways you can save money on prescription drugs:
8. Use generic prescription drugs. Since the FDA eased restrictions on pharmaceutical companies being able to advertise directly to consumers (called DTC advertising) in 1997, Americans have been bombarded with multi-million-dollar ad campaigns promoting name-brand drugs and treatments. According to the ConsumerReportsNationalResearchCenter, generic drugs are as effective and safe as name-brand drugs and often cost significantly less.
9. Get drugs by mail order or from big-box retailers. You can sometimes find prescription drugs at reduced rates at warehouse club stores like Sam's Club even if you're not a member. Several large retail chain stores also offer significant discounts (without health insurance) such as $4 for a 30-day supply or $10 for a 90-day supply on 300-400 popular generic drugs. You can also ask your doctor to recommend a mail-order pharmacy where you can get a larger prescription package (e.g., a three-month supply instead of a typical one-month supply) for less.
10. Ask your doctor if there is an effective over-the-counter (OTC) alternative. Your doctor or pharmacist can let you know if there is an OTC drug that can treat your symptoms for less money.
The next section will show you how to save by watching for billing errors and working the system.
Watch For Billing Errors
When was the last time you actually reviewed your medical bills? An incredible 9 in 10 hospital bills contain overcharges, according to a New York Times article based on a U.S. Government Accountability Office report. Reduce the likelihood of paying too much for your medical care by doing the following:
11. Ask for itemized bills. The explanation of benefits (EOB) statement you get in the mail does not contain a detailed breakdown of all costs charged to you for services and/or inpatient stay. Specifically ask for an itemized bill so you know exactly what you are being charged for.
12. Review bills for errors. Make sure that you actually received all of the services, medications and other items that you are being charged for. If you notice a discrepancy or error, request copies of your medical chart and/or pharmacy ledger so that you can compare the doctor's orders for services with what you were billed for.
13. Ask the healthcare provider's billing office and your insurance company to audit your medical bills. Insurance claim processors can make mistakes resulting in incorrect billing even for services and medications that you did receive. Your healthcare provider's claim managers can review your case and correct any billing errors.
14. Review your insurance coverage benefits manual. Your health insurance policy manual outlines which charges are "covered" versus "not covered". All covered expenses should be paid for by the health insurance company. The EOB form you receive from your insurance company will note if a service was covered or not. (To get a grip on your health insurance policy, see Understand Your Insurance Contract.)
15. Establish a relationship with the billing office staff. Most doctors' offices have a professional billing staff or finance department that handles all patient billing questions and concerns as well as interactions with insurance companies. If you are having difficulty with your medical bills, schedule an appointment with your doctor's billing office. They should be able to review your bills, explain your health insurance benefits, direct you to other resources to maximize your insurance benefits and help you obtain less-costly drugs and services.
16. Seek the assistance of a professional bill reviewer. If you just can't make heads or tails of the bills' codes and costs, contact a professional bill reviewer who knows hospital diagnoses and procedure codes and can determine if you have been incorrectly billed or overcharged for the care you received. (To find out how to handle your bills from a medical emergency, read Steering Clear of Medical Debt.)
Managing Medical Bills
Reducing your medical bills or restructuring your payment schedule can be fairly simple if you're willing to take an active approach.
17. Negotiate with your doctor's office. You can often get a discount on services simply by asking. In today's increasingly competitive healthcare industry, keeping customers is in a provider's long-term interest. It can't hurt to ask for a discount to get your business.
18. Create a payment plan. If you can't pay your bill in full and on time, ask the billing-office staff if they will work with you to create a plan enabling you to make smaller, more manageable payments over an extended period of time.
19. Talk to your insurance company. If you're having trouble paying your medical bills, there may be a different health insurance plan that is better suited to your needs.Co-pays, deductibles, annual maximums and other fees can vary significantly between plans.
20. Establish a health savings account. If you have a high-deductible health plan, you should consider opening a health savings account to save for items your health plan won't cover. The money you or your employer contribute to the account is tax deductible, it grows tax free and money you withdraw from the account is tax free, too, as long as it goes toward a qualified medical expense. (To learn more, read Health-y Savings Accounts.)
By taking the time to familiarize yourself with your insurance benefits, seek discounted services and drugs, review your bills and work closely with your healthcare providers' billing or finance staff, you can manage and even significantly decrease your medical bills.
Health savings accounts can be another way for some people to reduce healthcare costs. Some employers also offer cafeteria plans or flexible spending accounts that can help to offset various medical expenses.