Medical Examiner

Here’s Exactly What to Do When You Get an Outrageous Medical Bill

From how to look up what your care should cost to how to fight the bill in court, if you have to.

A woman holds several 100 dollar bills, which are on fire.
Jp Valery/Unsplash

We all know the cost of health care in the U.S. is high, but it’s kind of hard to know how high, because medical bills are so opaque. Try to think of another industry where you buy something having literally no idea how much it’s going to cost. Often patients won’t even see a bill until they get it in the mail and nervously hold the envelope in their trembling hands. And then hello, sticker shock. If this sounds familiar, you’re not alone.

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That was the case for Rich, a 33-year-old living in the Midwest. Rich’s fiancée convinced him to see a gastroenterologist for some minor nagging GI issues he was having and basically ignoring. The doctor advised him to get a colonoscopy, which he thought his insurance would help cover. He turned out to be totally fine. But then he got a bill for $2,000. “I was almost like kind of pissed that they didn’t find something,” said Rich. “I mean, for this money, give me something. Tell me I’m gravely sick or something.” What’s more, he was already trying to get out of debt—and now, this bill was piled on top of what he owes.

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We covered Rich’s case on an episode of How To! that was first published last summer. As the price of, well everything, goes up, we’re sharing the advice that our expert source gave Rich here. To help with Rich’s case, we spoke to Marshall Allen, an investigative reporter, and the author of Never Pay the First Bill: And Other Ways to Fight the Health Care System and Win. Our conversation has been condensed and edited for clarity.

David Epstein: So you’ve gone to the doctor, had a procedure, and get the bill. Once you’re slapped with that eye popping invoice, what do you do first?

Marshall Allen: Usually when you go to the hospital, they give you an aggregate cost in the bill, but you really need to get that itemized bill. It’s like your receipt of all the different charges that made up the total cost. You have a right to have that as a patient. So you can get that from your hospital or your doctor or whoever is billing you.

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The other piece that you really want to make sure you get, because they don’t always offer this: You want to get the billing codes. They have codes that describe every type of service that people receive. And so if you can get those codes, then you can look up price comparisons, and you can see if you got ripped off or not. It’s really interesting when you see how these costs break down, you can go to a website called fairhealthconsumer.org, and so you can plug these billing codes in. And they will show you what the price breakdown is for a fair price within your community. So you put in your ZIP code and it’ll tell you price estimates.

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So, you get the price estimates, and you call the hospital. Say you get someone on the line who has the power to help you. What is the right way to ask?

I would be extremely polite and extremely friendly to the point that you’re trying to build a relationship with the person on the other side of the phone. You could ask them, “Hey, look I’m really set back by this bill. I’m so a burdened by this. I mean, I have all this debt already. In fact, I’ve been working so hard to get myself out of debt and then to get hit with this $1,900 bill is really frankly, overwhelming to me. And I just don’t know how I’m going to pay it. Could you help me understand how the system works on your end? And I know looking at your website and other websites of hospitals in this area, that some hospitals are taking like $1,200 for colonoscopies. So I can see that the $3,100 you guys got is already way more than you get from other plans. So is there any way we could come up with something that works out well for both of us? If I could scrounge up a few hundred dollars right now, would that be enough? Could we just pay this off? What’s the flexibility here?”

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You worked with a woman we’ll call Sarah, who was in a similar situation to Rich, but she wasn’t able to settle things with a simple phone call. Tell us about that case.

She had three stitches in her finger because she had a little kitchen accident, went to the emergency room for three stitches. And the price that her UnitedHealthcare insurance plan had negotiated for her to pay was $5,805. And her health plan paid about $3,100. And then they were coming after her for $2,700 more. And she knew that this just did not feel right.

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This young woman got blown off by the billing department for weeks and for months. So she sent a warning letter to the CFO of the hospital, was completely ignored. Didn’t hear a response. And she said, “I’ll give you two options. One, you can waive my portion of the bill and just keep the $3,100 that my health plan has already paid you. Or two, you can back out the whole bill and give me the cash price.” Because when we looked up the cash price on her hospital’s website, we found that the cash price for the examination she received was only $256.

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So does that mean she actually would’ve been better off without insurance at all?

Yes. Her insurance company’s negotiated discounted rate was $5,800, 22 times the cash amount. So she filed the case in small claims court. And a few weeks later before the court date, she gets a call from the attorney representing the hospital. They said, “Look, we will make a deal with you. We’ll cut your bill in half. So you pay us $1,350 and we’ll call it good.” She said, “I’m not going to do that.” So the attorney calls her back the next day and the attorney says, “OK, we will wipe it clean. We’ll keep the portion we got from your insurance company. But you have to sign a nondisclosure agreement where you agree not to tell anybody about what happened or the nature of the settlement.”

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So I’m unable to actually tell you what happened, but what I can tell you is before she settled that case she actually got a call from that CFO of the hospital who had blown her off. By filing that case not only did she have the attorney on the phone, she got the CFO of the entire health system to call her and deal with her bill.

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That’s a good outcome, but, who wants to go to court to deal with a medical bill? It just sounds like a huge hassle with an indeterminate outcome.

It typically only costs around $30 or $40 to file a case in small claims court. You’ve already gathered your evidence because you’ve looked at the fair prices and you’ve seen that you’re being overcharged or incorrectly charged. So you don’t have to do a lot of extra research. You don’t have to put a lot of detail when you file that case. Now the hospital has to hire an attorney for hundreds of dollars an hour to defend itself against a case that costs very little to file.

Small claims court exists for consumers who are being exploited or taken advantage of by powerful institutions to stand up for themselves. And the limits are actually quiet high in a lot of states like in Illinois, the limit is $10,000. So any bill under 10 grand, you could sue in small claims court. In Texas, the limits are $20,000. In some states, the limits are actually quiet high, and they’re high enough to accommodate a lot of these types of everyday billing disputes.

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