How to Avoid and Fight Out-of-Network Medical Bills
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UPDATED: Mar 13, 2020
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While the government has taken great steps to make health insurance available and affordable to everyone, there’s still one major flaw.
I’m talking about out-of-network charges, which go beyond out-of-pocket maximums and can be astronomical. They really shouldn’t even exist, but until the situation is fixed, you need to take major caution to avoid them.
Imagine a situation where your original doctor was in-network and considered a “preferred provider,” but the providers he or she referred you to were not.
As a result, you receive a very large bill from said providers for charges not covered under your health insurance plan because they are considered “out-of-network.”
The problem is coverage under health care plans varies widely depending on whether the provider is participating or non-participating because the former negotiates special rates to keep costs low.
And it’s hard to know with certainty which provider is or is not in-network, especially when you get bounced around to different labs or diagnostic centers by a referring physician.
The Sky Really Is the Limit with Balance Billing
Long story short, an out-of-network provider can bill you for just about any amount they’d like and your insurance provider is only on the hook for the amount specified under your health plan. The remainder of the bill is your responsibility. This is known as “balance billing.”
So if you went to an orthopedic surgeon who referred you to an out-of-network diagnostic center for an MRI, you’d need to refer to your non-participating coverage for potential costs.
Under one particular health insurance plan, MRIs from participating providers require 10% coinsurance, so if the cost of the MRI were $1,000, you would still need to pay $100 after the deductible was met (if applicable). That’s a pretty fair deal, right?
But if you got the MRI with a non-participating provider, that coinsurance jumps up to 50%, or $500 after the deductible is met.
But wait, there’s more! This particular health care plan also has a maximum daily allowable amount of $300 for non-emergency services from a non-participating radiology center.
In other words, even though they technically offer to pay 50% of your bill, their maximum daily limit is $300, or in the case of a $1,000 MRI, only 30% of the cost. Put another way, you’re responsible for 70% of the cost, which isn’t really insurance at all.
Clearly this can lead to some pretty hefty charges, especially once the provider gives you the “insurance price,” as opposed to the significantly cheaper cash price.
In most of these situations, doctors send patients out-of-network without letting them know beforehand, despite the fact that they have to contact the insurance company to get the green light.
Amazingly, time after time no one seems to take issue with the fact that patients will be subject to non-participating pricing, which as illustrated above, is very problematic.
After all, using a relatively low $1,000 charge as an example, the difference would be $600 in costs.
What if there were multiple MRIs and other diagnostic work? What if the total bill amounted to thousands of dollars? It’s not at all farfetched, and my assumption is that this sort of thing happens on a daily basis across this country.
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How to Resolve Out-of-Network Medical Bills (Balance Billing)
First and foremost, you really need to watch your doctors and their associated providers like a hawk before the scenario above even unfolds.
If you’re reading this after the fact, the lesson going forward is to ask over and over again if the provider is covered under your plan. And double-check it yourself.
If there is any doubt whatsoever, and you have time to determine your eligibility with certainty, don’t proceed until you’re entirely sure.
For example, if your doctor wants you to go get lab work done, or get x-rays or an MRI, be 100% sure that a participating provider is conducting the services. If not, ask for alternatives.
Assuming you’ve already fallen into this trap, you’ve got to take steps to resolve the situation with your health providers.
Typically, the insurance company will cut a check early on and tell you they’ve done their part, that the rest of the bill is your responsibility.
Going back to our little scenario, the insurance company provided $300. You still owe $1,000 to the diagnostic center, or $700 net.
The key to reverse these out-of-network charges is to document what went wrong along the way.
Why were you sent to an out-of-network provider to begin with? Did anyone check your benefits beforehand? If so, why didn’t they notify you first? Why did the insurance company OK it?
If you were originally with a participating provider, and then sent out-of-network, you have a much stronger argument, as far as common logic is concerned.
After all, they should know if the providers they work with take a certain type of insurance. And this should be discussed or at least detected while making the appointments.
From there it really becomes a matter of the squeaky wheel getting the grease. You’ll have to state your case, present documentation, and let them know why you shouldn’t have to pay out-of-network charges.
If you’ve got a strong argument and provide plenty of pertinent information you should have a greater chance of reaching a positive resolution.
Unfortunately, dealing with health insurance companies and health care providers is a very bureaucratic and slow process.
You’ll likely need to complain and argue as you make your way up to higher and higher, more important contacts within the billing or health provider’s department.
Don’t give up though. It’s hard to fight for a reason (lots of money is at stake), but if you keep at it, they’ll more than likely settle. You’ll probably be offered the cash price first, which should be about 50% or more than the insurance price.
But don’t stop there – keep arguing for the price you would normally pay if the provider were in-network. It might help to mention that you’ll file a complaint. This usually gets noticed by higher-ups and leads to a quicker resolution.
Yes, it will be frustrating and time consuming, but if we’re talking about thousands of dollars, it should be worth your time. Once you do settle on an amount, make sure it serves as payment in full and get it in writing!
Lastly, I’ll mention that there will be cases when individuals want to see a certain physician or specialist, or go to a certain medical center, even if it’s not covered.
While that may be your prerogative, be sure you understand the potential costs beforehand. Good luck!
Steps You Can Take to Protect Yourself Against Balance Billing
- Ask if your doctor is a preferred provider and in-network
- Ask if associated providers/services are preferred and in-network
- Search for providers from your health care provider’s website
- If out-of-network, ask for all costs upfront
- Get everything in writing every time
- Know your heath plan’s benefits before you seek care
- Know your state laws regarding heath insurance billing and limits
- Make sure negotiated bills serve as payment in full
- Filing complaints with department of insurance and/or health provider may motivate resolution