Struggling with hospital bills? There may be help. Here’s some good advice from Dan Sherman, an experienced hospital financial consultant who counsels hospitals and cancer patients on ways to help pay their bills. Sherman is founder and president of The NaVectis Group of Alto, Michigan and he spoke with Urban Aging News about decoding medical bills and Medicare plan offerings.
UAN: What’s the first thing a person should do if they get a big medical bill that they know they will have to struggle to pay?
DS. Even before receiving the medical bill, they should be getting information. If you are going to be having a medical procedure that you guesstimate will be a little expensive, beyond your normal lab works and doctor visits, maybe an MRI or outpatient surgery, it would be wise to begin the process by requesting an estimate. Ask, “How much will this cost me, based on the insurance I have?” This would reduce the big shock when the bill comes your way. We don’t purchase anything - cars, groceries - without looking at the price. Patients should feel comfortable requesting that information.
When a bill comes, I have two specific recommendations: First, verify that the bill is correct.
Every medical procedure billed to the insurance company has an EOB, or Explanation of Benefits. So, when you receive a medical bill, and you think this doesn’t seem right or it’s way more than you thought it would be, compare it to the EOB. It will give an explanation of what these charges are.
The EOBs used to come in the mail. Now most are provided electronically. You can log into your insurance portal and find it there. For example, sometimes the EOBs will show something was out-of-network and therefore you’ll be responsible for out of network services, or the procedure was denied for some reason. You would want to understand why the claim was denied. Verify this by comparing the bill to the EOB to make sure things are correct. That’s where you can potentially find some errors. Maybe it was an in-network procedure and with a call you can get that billing error fixed. A significant percent of medical bills have errors in them. It’s wise to verify the bill is correct.
Second, I’d also recommend that if you have a bill and you’ll struggle to pay it, ask for help on the bill. The federal government mandates that non-profit hospitals provide charity care for lower income individuals. The unfortunate thing is hospitals often don’t advertise they have this help available for patients. Therefore, it’s critical that if you are struggling with your bill, you should ask for help.
These charity programs are based on income, so not everyone will qualify for them but it’s always worth asking: “Do I meet your guidelines for assistance on this hospital bill?” Somewhere between 20-30% of patients may qualify for financial assistance from the hospital.
UAN: Whom do you contact at the hospital to ask for help?
DS. The phone number for the customer service department would be on the bill. You just want to ask: “Is there any type of financial assistance available on this?” “Do I meet the criteria to get help?” Or you can set up a payment plan.
Hospitals have payment plan programs available for their patients. It may be done internally where they set up a payment plan. Other times, hospital systems will have an interest-free loan done through a third party. Typically, it’s interest free for at least a year and most are two years. The hospital gets paid right away from this third party and the patient pays the third party whatever monthly installments they need to make. So, once it goes past that term of 12 or 24 months, then they start charging interest. Interest rates can be fairly high.
UAN: Can hospitals write off all of a bill or just some of it?
DS. Hospitals may have their own unique way of handling their charity program. However, usually there are two different categories. In one group, if you meet the financial criteria, the entire bill is written off. So, the patient would have zero responsibility for the bill. Some hospitals also may provide assistance to people at a slightly higher income level, then the hospital may provide a discount on the bill. Typically, most guidelines require you to be below 200% of the federal poverty level for your entire bill to be written off. But if you fall between 200-300% of the federal poverty level, hospitals might provide 60-70% reduction of a bill.
UAN: Should patients ask to see a special type of counselor, such as a financial counselor?
DS. If you receive a medical bill and you are calling the customer service number, you’ll be speaking to a biller. If you want to speak to a financial counselor, you need to call the hospital directly and ask specifically to be put in touch with the financial counseling office. They can help with applying for assistance like charity care or setting up a payment plan.
UAN: Can you give an example of how you have helped reduce someone’s bill?
DS. When working on reducing a patient's anticipated medical bill I focus on the person’s diagnosis and their insurance coverage. I navigate patients through the Medicare system and help them choose wisely within the system. For example, just a month ago, there was a cancer patient referred to a hospital’s infusion center. He needed expensive infusions, but he had a Medicare Advantage plan with a $7,500 maximum out-of-pocket responsibility. The patient said, “I can’t afford it.” His doctor referred him to another infusion center and they said the same thing. Then the doctor referred him to a third hospital. When I looked at his insurance, he was still in his open enrollment period to pick a Medicare supplemental plan. I educated the patient on his Medicare options which resulted in him picking a plan that left him a financial responsibility of $226 for the year for the infusion versus $7,500. His premiums increased by around $100 a month but it reduced his out-of-pocket responsibility by over $7,000. When I told him he didn’t have to pay $7,500, he began to cry. He said, “Why didn’t the other hospitals tell me this?” The answer is that some don’t pay attention to these details and look at whether there is better insurance coverage available.
UAN: If you know you have costly medical needs ahead, is there a way older people can set up help to address what’s coming?
DS. Yes, you can meet with a financial navigator who might prevent pending financial problems from developing by choosing wisely within the Medicare system. If you have a chronic medical condition, it’s advisable to get advice from a well-qualified insurance agent or a financial navigator to pick the best plan within the Medicare system. Most people don’t because Medicare is so confusing. Most people just give up and pick whatever their neighbor picked. That’s not wise. You want to pick a plan based on what your clinical needs are.
The last thing I want to emphasize is: Don’t be afraid to ask for help. Hospitals are hiring full-time financial navigators because the need is so great. That means you are not alone; you are not the only ones struggling with medical bills. A vast majority of people struggle with their medical bills. So don’t be afraid to ask for help.
Patricia Anstett is the author of a book on breast cancer surgery and former medical writer for the Detroit Free Press.
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