The cost of healthcare in America is taking a bigger and bigger chunk out of our annual income each year and is only expected to get worse.
Here are some stats:
In 2016, U.S. health care costs were $3.3 trillion. That makes health care one of the country’s largest industries. It equals 18 percent of gross domestic product. In comparison, health care cost $27.2 billion in 1960, just 5 percent of GDP. That translates to an annual health care cost of $10,348 per person in 2016 versus just $146 per person in 1960. Health care costs have risen faster than the average annual income.
While our elected officials work on fixing our healthcare system (said with a lot of sarcasm), we can do some things to make sure we are getting what we pay for. Here are some things that everyone should do each time they get a medical bill:
- Check your personal information.
Sometimes bills get mixed up and you may end up receiving one that doesn’t belong to you, especially if you have a common last name. This actually happened to us. There is a woman that lives about a mile from us that has the same first and last name as my wife and uses the same hospital as us since it is very close to both of us. We were receiving her medical bills as well as ours!
Also, check all the identifiers, and be sure your health insurance policy number and medical record numbers are correct, otherwise you may be paying out-of-pocket when insurance ought to be covering your expenses. Again, this happens to me frequently, particularly having an incorrect policy number, which then triggers huge out-of-pocket costs. - Request an itemized bill.
Lots of medical billing companies will send out invoices with no information whatsoever about the services provided, just the amount you owe. Always request an itemized statement before you pay a dime, and double check what you’re being charged for. To make this easier for you to verify, especially if you are seriously ill or injured, have a family member or friend present with you when you go in for a procedure to document what services were performed. - Question suspicious fees and billing codes.
Your medical invoices should include the billing codes, which are typically combinations of letters and numbers, such as CPT, ICD-10-CM, DRG and so forth, which itemize the services you received. Check these to see if you have been double-charged for any items, or charged for services you may not have received. That includes tests that your doctor ordered but later cancelled. I have found many of these errors when my dad was going back and forth to the hospital during his final months. Make a list of any items with charges that seem way too high, such as a $3,500 for a 15-minute ER visit to evaluate an injured ankle or $20 for a single aspirin. You need to be especially wary of your level of service charge, which is the code that determines the severity of your case and treatment. Up-coding (the practice of entering in a higher level charge) can drastically increase your bill — and it’s illegal.
If you’re not sure what the code means, just google it. Then contact the billing office. - Follow up.
Keep careful records of when you called, who you talked to, and the time frame in which they were supposed to get back to you. It’s a pain in the butt, but the attention to detail could save you thousands. - If everything is legit, there’s still more that you can do to lower your bill.
Negotiate. Negotiate. Negotiate. You can often get a discount on your bill if you simply ask for one. Also, you can request a payment plan, interest-free, to pay off large bills. I have done both of these many times. - Be polite, but not a pushover.
Be prepared when you call the billing office or your insurance company. Explain why you are calling and what you are asking for. Personally, I find that about 65% of my family’s medical bills have some form of error that results in a higher bill for me. Incredible but true.
If you don’t have the desire or the time to do this stuff, you can always pay a professional to look over your medical bills. A good place to help you find one is through the Alliance of Claims Assistance Professionals (ACAP), www.claims.org/refer.php.
Joe Baker, CFP®
Baker Asset Management, LLC
joebaker@bakerassetmanagement.com
