S1: I’m not saying never pay your bills, what I’m saying is never pay the first bill until you have confirmed that it’s accurate and that it’s fairly priced and then go ahead and pay it. But if you determine that it’s inaccurate and not fairly priced, then my what I would urge patients to do, if they’re able, is to fight back.
S2: Welcome to How to. I’m science writer David Epstein. We all know the cost of health care in the US 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.
S3: My name is Rich. I’m thirty three years old. I live in the Midwest. I work as a consultant.
S2: This past year, Rich’s fiancee convinced him to see a gastroenterologist for some minor nagging GI issues he was having and basically ignoring.
S3: You know, I went to go see this doctor. We talked about some of my GI history and some of the issues I was having. And he recommended I get a colonoscopy, which, you know, is a good idea, I think. And yeah, I mean, I was told that my insurance would cover it. I mean, I was anticipating some out of pocket cost. You know, they did have a deductible for a thousand. So I thought, well, you know, worst case scenario, I just have to pay, you know, a grand for this whole thing and then that should be it.
S2: At that point, Rich didn’t really think about it again. And then a few weeks later, he and his fiancee went on a trip. And when they got back, they checked their mailbox.
S3: You know, we were gathering up the mail and I saw that there’s a letter from the the hospital system. I was like, oh, no, this is it. This is the bill. And when I opened it, I was just like, oh, God, she was in the kitchen watching me. She’s like, what’s wrong? Is something wrong? Something happened. I’m like, I was like, well, that colonoscopies cost me two thousand dollars. And I was just I was just like, man, two thousand dollars to just find out there’s nothing wrong with me. Like I was I was almost like kind of pissed that they didn’t find something. It’s like I mean, for this money, give me something like, you know, tell me I’m gravely sick or something.
S2: So it’s like double your worst case scenario.
S3: Yeah. And more so. Yeah, I just didn’t really know what to do. I mean, I and it really came out of nowhere.
S2: Rich says if you really had to, he could go on a payment plan and eventually pay off the bill. But he’s been working hard to get out from under other debt he’s already got. And this would really screw up those efforts.
S3: It’s just that feeling of like, man, you know, I’m taking some steps forward, making significant progress. But now I’m I’m going to have to, like, add this to my my debt snowball, so to speak, in like kind of you know, it’s something where I think about it. It’s like I have friends, I have family that, you know, if they got hit with this bill all of a sudden that they might not be able to just make a plan to pay it off.
S2: On today’s episode, how to fight outrageously high medical bills or any medical bill, really, because riches story is all too common, according to our expert Marshall Allen,
S1: I’ve talked to lots of people who review medical records for a living. They would tell you that most of them contain some kind of an error. So I would assume that that bill is incorrect in one form or another or it’s overpriced in one form or another.
S2: Marshall says the thing most of us don’t realize about our medical bills is not only can you fight them, but often you can win. Stay with us. Our expert Marshall Allen started sticking it to the man early in life, his first battle came when he was just 16 years old.
S1: This was one of the most like, monumental moments in my life, to be quite honest. It really shaped me as a person because I worked at a dinner theater and I was the meat carver. So I stood at the end of the buffet line and I wore a hat and I carved roast beef. And I love this job. One day we show up and they have closed the dinner theater and they said, I’m sorry, we have no money to pay you guys. And we were all upset because the owner of the dinner theater had started another dinner theater across town and that one was still open and it was the same company. And so we were young kids, but we weren’t stupid. We were like, if you have money to operate your dinner theater, then you have money to pay us.
S2: So Marshall decided to take his former employer to small claims court.
S1: My mom actually told me about small claims court and I it blew my mind. I was like, I can barely even drive. You mean I can sue somebody? So I filled out the paperwork. I wrote a nice little narrative and I filed the case. Then, to be quite honest, I forgot about it until a few weeks later I got a notice in the mail that said we had a court date. I put on my nice, you know, Sunday church clothes and I went into court geared up, ready to fight this thing. Right. But I go in there and lo and behold, the owner of the company and his attorney are sitting there at the table opposing me. I could not believe it. I had never talked to the owner of this company. So I’m mustering up my energy to go Perry Mason on this guy. Right. The judge just read my complaint and then he looks at Bill, the owner of the company, and he goes, hey, Bill is what this kid is saying true? And Bill goes, Yeah. And the judge says, well, then you need to pay this kid his money. And on the spot, I got a check written. They didn’t even bang a gavel. I couldn’t believe it.
S2: Marshall now digs into injustices for a living as an investigative reporter, and his new book is called Never Pay the First Bill and Other Ways to Fight the Health Care System and Win Marshall become the guy to call if you get an Outrageous medical bill. In fact, that’s actually how we found Rich.
S1: Sadly, the colonoscopy, I mean, I hate to make a joke, but it’s the perfect metaphor for what’s happening to working Americans right now with our health care costs. We we are paying as working Americans two to five, even sometimes ten times more than what a Medicare patient would pay.
S2: The first thing to know is that when you go to the doctor or any other medical practice, there isn’t actually a single set price. Instead, the price is determined by a number of factors, including who’s negotiating on your behalf. When a person is on Medicare, for example, the government is negotiating the rate and setting the price in advance.
S1: But in the employer sponsored health plan space, which is where Rich is operating, those prices are set by a series of behind the scenes like haggling and horse trading between insurance companies and hospitals and doctors and pharmaceutical giants. They set the prices behind closed doors and then they basically just tell the patient, OK, you pay it. And it’s really an unfair system because the variation is so extreme in prices for something like a colonoscopy, you could pay anything from 12 hundred dollars if you were on Medicare, up to ten thousand dollars on some health plans and you don’t ever know what that price is going to be because they don’t generally give you the prices up front.
S2: So in our insurance companies negotiating on our behalf, they’re fighting for those lower prices for us, the patient, right? Actually, no, not even close.
S1: So insurance companies love to say our profit margins only about three percent, as if they don’t make a lot of money. Right? Well, so their incentive actually, when you look at the overall cost of health care, they they really want that cost to go higher because they’re three percent margin gets bigger as health care costs go higher. And so they’re not the fierce guardians of our health care dollars that we think that they are. We assume they’re operating on our behalf. But the insurance companies have more loyalty to the doctors and the hospitals in their networks than they do to the employers and the working Americans who are paying the bills.
S2: So they’re trying to make that pie really big. So they’re three percent is really
S1: the bigger the pie, the bigger their slice. That’s right. They would love to pretend like a lot of medicine is really variable, but it’s a little more like an assembly line, especially for something routine, like a colonoscopy or a knee replacement or just the kind of nickel and dime procedures that are done all the time. Those costs are quite predictable.
S2: Here’s a quick cost saving tip. If you’re having a routine procedure done, don’t get it done at a hospital and especially don’t get it done at the hospital. That’s on every billboard you pass unless, you know, you enjoy paying extra for their fancy advertising.
S1: And that’s just because hospitals jack up the prices. They add facility fees to everything that they do. And so if you’re going whether it’s a colonoscopy or like an MRI or a CT scan or some type of an imaging test, or maybe you need lab work done, it’s always going to cost more at a hospital than it is at a facility that’s not a hospital. You just you’re just going where your doctor tells you to go. You don’t know that the hospitals are overpriced. You could get the same colonoscopy, maybe for less somewhere else.
S2: But even avoiding extra hospital fees might not spare you an excessive bill, so once you’re slapped with that eye popping invoice, what should you do then?
S1: 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 were 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 and 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. So they have codes that describe every type of service that people receive. And so if you can get those codes, then you can look at 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 Fair Health Consumer Dawg.
S2: Again, that website is Fair Health Consumer dot org. It’s a nonprofit that gathers payment information from insurance companies all over the country, will make sure to link to it on our show notes.
S1: And so you can plug these billing codes in or you can also look up procedures like colonoscopy is common enough that you can just look it up 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.
S2: So this is our first rule. In order to know if you’re being overcharged, you need to know what you’re being charged for in the first place. Call your doctor or call the hospital at the clinic and ask for an itemized bill. Rich, can you walk us through the your itemized bill like some of the things that jumped out to you?
S3: I mean, there’s two that really stand out to me. One, it’s basically it looks like a charge for 30 minutes of recovery room time. They put everything under quantity. So, like, I got two quantities of that to 30 minute intervals of time spent in the recovery room, and that comes to nine hundred forty four dollars.
S2: I hope that was that nice, really nice room. No room service.
S3: Didn’t even have a door knock on the door instead of a
S2: service you think for nine forty for you least get a door for goodness sake. You know, it
S3: had a curtain and the robe. Nothing to write home about. But it’s just funny because I think, you know, one of my first times living by myself, like years ago, I had a one bedroom apartment in Philadelphia and I spent seven seventy five a month for rent. And I’m just like, wow, this costs more than one month of living in South Philadelphia.
S1: Wow, that’s amazing. Who can anticipate what kind of charges they’re going to throw on there? Right. The standard has been like that. We would all just pay the bill blindly without even thinking about it. But what’s happened is we have had these deductibles go up and up and up and up over the last 10 years. So Rich’s deductible of a thousand is actually quite low. I mean, there are people with three thousand dollar deductibles, five thousand, even ten thousand dollar deductibles. And so if you have a deductible that’s that high, you’re functionally uninsured, you know, for anything that’s just a routine type of treatment. So now patients have more incentive than ever to start looking at these bills.
S3: This next one is to me, it’s just really funny and it is sort of borderline oversharing on my part. But I’m going to get to share it anyway. After the colonoscopy, my you know, my my butt is just in a lot of pain. The doctor asks for light Akane to put down there to help cool it. That is just essentially Vaseline. The cost for light. A Can on this bill was one hundred and five dollars. So I could have brought Vaseline from home that I was using the day prior. I could have just brought that to the recovery room and did it myself. But instead I paid. I got the red carpet Vaseline
S2: in addition to an ambulatory center. You need to need to pick like a BYOB place, BYOB.
S3: Definitely. When I saw that charge, I couldn’t believe it. I’m like one hundred and five dollars and they didn’t even, like, send me home with it either. Like, I only got one swipe right. It was it was quantity.
S2: One was what was the total itemized charge.
S1: I have it here. It’s six thousand five hundred and nine dollars.
S2: Yikes. All kidding aside, this is why it’s so important to have more information, not just the itemized bill, but also those billing codes Marshall mentioned that describe the services you were given. If the provider doesn’t give those to you, you should be able to get them from your insurance is customer service department.
S1: If you have the itemized bill with the billing codes, you can go a couple of places for price estimates and comparisons. One of them, like I mentioned, is fair health consumer. Again, another one that we have now that’s a really powerful tool for consumers is hospital websites. There’s a new rule that the federal government put into effect that says hospitals are required to post their prices for different procedures on their websites. So a lot of hospitals have been non-compliant with this federal rule. But what it’s showing is absolutely amazing because you see the price variation between insurance companies at the same hospital and between insurance companies at different hospitals.
S3: When Marshall told me about that, that I could find prices on the hospital site, I tried to look on the hospital, the system that I went to, and it was like a maze to find it. It’s buried under different pages. I finally was able to find like an Excel file that maybe had a quarter of the information. It felt like I just happened upon treasure.
S2: That’s our second rule, once you know what you’re being charged for. Compare that to the typical cost for the same procedure in your area, Marshall looked up. The typical price of a colonoscopy enriches zip code and found that Rich was paying at least 1500 dollars more than usual. So now we know, but knowing is only half the battle. So how do we fight and actually win? That’s after the break. We’re back with Rich and our expert Marshall Allen before Marshall help Rich fight his high medical bill, Marshall worked with a woman we’ll call Sarah, who is in a similar situation, and she didn’t take it lying down.
S1: 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 United Health Care insurance plan had negotiated for her to pay was fifty eight hundred and five dollars and her health plan paid about thirty one hundred dollars. And then they were coming after her for twenty seven hundred more dollars. And she knew that this just did not feel right. So 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 30. One hundred 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 two hundred and fifty six dollars.
S2: OK, so does that mean she actually would have been better off without insurance at all?
S1: Yes. Her insurance companies negotiated discounted rate was fifty eight hundred dollars twenty two 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 thirteen hundred and fifty dollars 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. And 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
S2: for three stitches. You can get the quality stitches.
S1: She gets the CFO involved. And it’s because of the power of the justice system. It is very effective.
S2: The health care system can be intimidating. Where do you go if you know there’s an obvious problem, but nobody’s helping or even responding to you? Who are you even supposed to pick a fight with? But Sarah got the CFO on the phone and presumably got a fair price. And you can, too, which leads us to our next rule.
S1: Everything is negotiable in health care, especially when you’re the one being ripped off. Here is where the power of this new price transparency comes into play and give someone like Rich a lot of possible leverage if he wants to use it.
S2: After you have the information in front of you, your next step is to talk to the hospital billing department and you should consider communicating in writing and recording any calls you have with them. Sarah simply informed billing department representatives that she would be recording calls for her own records that left her with excellent documentation of her negotiations.
S1: But let’s say Rich goes to them and says, hey, look, folks, 30 minutes in the recovery room and you all charge me. Nine hundred and forty four dollars for two units of that. Come on, people, that’s Outrageous. You need to strike that from the bill. That is crazy. I can’t pay that. You can negotiate these different things. And that’s where you can use something like fair health, consumer drug. And you can say I’m looking at the fair health consumer price. And it’s estimating for an in network colonoscopy, it should be under four thousand dollars in a hospital and even less in a freestanding surgery center. And they’re going to say, oh, nice to talk to you, Rich. We can put you on a payment plan for this. That’s always their solution. It’s not a great solution. In fact, one in six Americans right now has medical debt in collections.
S2: One in six.
S1: Wow, one in six. That’s according to the Urban Institute. And they did an analysis of credit reports. So just like Rich is saying, he’s trying to pull himself out of debt for other expenses. Now, the health care system is frankly exploiting his sickness to make a profit.
S2: Rich, did you did you talk to the billing department and sort of say, hey, I know, you know, you’re overcharging me?
S3: I did. I have talked to a lot of people. There was a point in the conversation where I said I. I don’t understand what it is I’m paying you for. I said, why do I have insurance? She was like, Oh, OK, yeah, yeah. But like, there is a sense of powerlessness. Like this is just a woman working from home who’s just answering my questions, like I’m not going to be able to win with you know, she’s not going to like, you know what, let me call my boss. Yeah. Yeah. It just feels like you’re a cog in the machine talking to another cog in the machine and the people operating the machine aren’t don’t care and they’re not listening.
S2: We may all be cogs in the big machine, but Marshall says sometimes that person on the other end does actually have the power to help you. You just have to know the right way to ask.
S1: 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. But you could ask them, hey, look, I’m really set back by this bill. I’m so 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 nineteen hundred dollar 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, there’s some hospitals are taking like twelve hundred dollars for colonoscopies. So I can see that that the thirty one hundred dollars you guys got is already way more than 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? Like if I could scrounge up a few hundred dollars right now, would that be enough? Could we just pay this off? I don’t want to enter a payment plan. I’m already in debt. Tens of thousands of dollars. I know that you all would like to close this out on your end. So what what’s the flexibility here?
S2: And so here’s our next set of rules, first, tell the billing department that that high bills really a big problem for you and you won’t accept the payment plan. Next, ask them to compromise. And if you do happen to have cash on hand, offering a quick solution in return for a discount, it sometimes works. It’s worth a shot. Finally, if they still don’t budge, threaten very politely to take them to small claims court. You can do this over the phone. And by writing a warning letter, Marshall says that the prospect of small claims court is sometimes enough to get them to bend. But even if it isn’t small claims court, it isn’t as scary as you think it is as Marshall found out when he was just 16. It can actually be kind of awesome.
S1: So it typically costs around 30 or 40 dollars to file a case. 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. But 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 quite high. And a lot of states like in Illinois, the limit is ten thousand dollars. So any bill under 10 grand, you could sue. In small claims court in Texas, the limits are twenty thousand dollars. So in some states the limits are actually quite high and they’re high enough to accommodate a lot of these types of everyday billing disputes.
S2: Our final rule is to not be afraid of small claims court, honestly. I mean, who wants to go to court? It just sounds like a huge hassle with an indeterminate outcome. But small claims court is a system designed to give consumers power. It’s there to help you and it often works. Take advantage of it. Did you think about small claims court?
S3: I did not. You know, it’s it’s just like the idea of going to court. I think it just has this idea. Like, it’s it’s like, oh, this is going to be a very painful, time consuming process. But it only seems that way because you haven’t actually done it yet. It’s only 30 or 40 bucks to do it and then show up. It doesn’t feel like impossible.
S1: It can seem overwhelming or not worth the hassle or inconvenience or a pain. But let’s say Rich got this done in under ten hours, which I think is very realistic. In fact, I think he could do it. He’s done most of the legwork already because he’s got all the details he needs to understand the case. So let’s say it took him ten hours total. Well, then if he could get this thing waived, even if it took going to small claims court, he would be paying himself the equivalent of two hundred dollars an hour by saving his money instead of giving it to someone else. I would encourage people to think about it that way.
S2: The last thing to remember is that a high medical bills aren’t an issue of one hospital or one insurance company. It’s a symptom of the system. Systems get the results they’re designed for, and corporatist health care is designed for profit. But if you do decide to challenge your bill or maybe even go to small claims court, you’re doing more than just saving yourself a few bucks. You’re throwing a punch in the fight against excessive health care costs.
S3: At the beginning of this year, we switched insurance plans because usually I opted for a lower premium. But I was like, you know what? I’m going to have a little bit more money taken out of my paycheck in order to have a low deductible. And I thought, you know, I’m safe. Like this is going to be great. And then to get a bill for roughly two grand. Yeah, total shock.
S1: David Richards hitting on something that that is another observation that I have about the injustice to our younger generation of of working Americans. Right. They right now have to carry a much heavier burden of health care costs than their parents did or their grandparents did. And it’s a greater anchor around them as a younger generation as they’re trying to build some equity in pay off their student debt and get their feet under them financially as adults. And it’s really unfair. It’s my hope that they’ll come to an understanding of this injustice that’s been foisted on to them. And I hope that they will rise up and educate themselves and fight back.
S2: Thanks to Rich for sharing your story with us and a Marshall Allen for all of his great advice. Make sure to look for his brand new book, Never Pay the First Bill and Other Ways to Fight the health care system and Win. Is there something Outrageous in your life you need to fix or any other problem that needs solving? Send us a note at how to at Slate Dotcom or leave us a voicemail at six four six four nine five four zero zero one. We might have you on the show. And if you like what you heard today, please give us a rating in a review and tell a friend that helps us help more people. How TOS executive producers Derek John, Rosemary, Belson, Margaret Kelly and Rachael Allen produced the show. Our theme music is by Hannis Brown, remixed by Margaret Jacob, our technical director. Charles Doohickeys, host emeritus. I’m David Epstein. Thanks for listening.