How to Avoid and Fight Out-of-Network Medical Bills

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. In some cases, it may seem simple. You just go to certain hospitals for in-network care. The problem is when certain doctors at the hospitals you’re used to going to are not in-network. This can happen at any stage, but it’s more common among high level specialists. Ironically, it’s when you already have fewer options that insurance companies may switch it up on you without warning.

There are other common circumstances that lead to this predicament as well. 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. You might assume any specialist your in-network doctor refers you to would also be covered only to end up with extreme out of pocket cost.

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.” Then you’d have to negotiate with billing companies and the health care facility.

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.

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.

How much can medical providers charge you?

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. This doesn’t mean providers are trying to rip you off. It just means you won’t benefit from the discounts insurance companies have negotiated with them ahead of time.

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 could put you in quite the bind, especially with costly tests and procedures.

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. Unfortunately, it’s often a choice between out of network providers and no nearby provider or long wait lists. This is especially true in rural areas or other areas with a limited provider network.

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 can you resolve out-of-network medical bills (balance billing)?

First and foremost, you need to be aware of what’s going on with your care. Don’t be afraid to ask questions, even if they seem redundant. It could be the difference between an in-network benefit and paying much higher rates. If there’s not an alternate provider within a reasonable distance, your insurance may also be required to cover out of network providers with an in-network rate. You can discuss this with your healthcare facility billing professionals.

If there is any doubt whatsoever, and you have time to determine your eligibility with certainty, don’t proceed until you’re entirely sure. Of course, this would not apply in emergency situations. There are also some protections around emergency care.

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. You might be surprised how far this information can go even if there are no reasonable alternatives.

Do hospitals offer financial assistance?

While many patients do not use them, hospitals are required to offer certain types of financial assistance to patients in need. Sometimes, this involves writing a letter to your hospital. Of course, if they partner with independent surgeons and other medical providers, this may not cover all costs.

Hospital financial assistance programs offer tiered assistance based on your income. For some low-income patients, applying for financial assistance may even cancel out your out of pocket altogether. Generally, once you submit an application for assistance and get approved, it would be good for 6-12 months.

What if you don’t qualify for financial assistance?

Whether you just want to avoid a high balance in the first place or you make too much to qualify for assistance, you can do more to protect yourself.

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!

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What steps can you take to protect yourself against balance billing?

You can use the following steps to protect 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

If all else fails, you can file a complaint with the department of insurance and/or your health provider which may motivate resolution.

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