The American healthcare system is badly broken. Every year, healthcare costs continue to rise while the quality of care declines. Healthcare corporations rake in record profits by overcharging and underserving patients. Marshall Allen, an investigative reporter, says that the healthcare industry wants us to think that we can’t do anything about this unfair system. Allen, on the other hand, shows us in his book Never Pay the First Bill how to fight back and take back control of our health care.
The Problem: An Epidemic of Overcharging
Overbilling runs rampant in American healthcare. Allen cites research showing that up to 80% of medical bills contain errors and overcharges. These errors are rarely accidental. Allen reveals the sneaky tactics providers use to inflate your bills:
- Upcharging for supplies or medications, sometimes marking them up over 1000%
- Performing and billing for unnecessary procedures and tests
- Misrepresenting treatment codes to charge for more expensive services
- Simply making billing mistakes in their favor over and over
This overbilling epidemic costs Americans an estimated $760 billion to $935 billion every year. Meanwhile, insurance companies find ways to deny claims and dodge covering treatment you thought was included. Fighting these billing issues feels impossible, by design. The healthcare system uses confusion and complexity to discourage challenges to their massive profits.
Knowledge is Power: Educating Yourself is the First Step
Allen insists that while the deck seems stacked against us we can level the playing field by arming ourselves with knowledge. The first step is learning the lingo and secret codes healthcare providers use on medical bills and statements. Understanding terminology like CPT codes and CDM codes allows you to verify billing accuracy yourself.
Some other empowering education tips include:
- Learn your insurance plan details – don’t assume things are covered, verify first
- Research average costs for procedures in your area to spot outrageous overcharges
- Obtain itemized bills and full medical records to double-check billing accuracy
- Compare notes and bills with other patients to uncover inconsistencies
- Check provider networks – doctors at in-network hospitals may still be out-of-network
Simply educating yourself about medical billing practices will make you a more informed, less vulnerable consumer
Get Proactive: Put Providers on Notice
Once you know, Allen says to let healthcare providers know that you will be closely reviewing all bills and statements:
- Before receiving care, inform providers you expect fair, transparent billing
- Request the cash price for procedures upfront to compare against insurance bills
- Ask for pre-authorization of expensive tests or specialist referrals
- Negotiate caps on what you will pay out-of-pocket before receiving nonemergency care
Taking these proactive steps sets the expectation that providers can’t just carelessly send inflated charges your way. Being an engaged, assertive healthcare consumer decreases the chances you’ll be overbilled in the first place.
Challenge Everything: Contest, Negotiate, Repeat
Despite your best efforts, you’ll invariably still receive medical bills that seem inflated or just plain wrong. Allen says this is when tenacity becomes your most valuable weapon. He provides several effective tactics for contesting suspicious medical bills:
- Call patient advocates – many provide free assistance negotiating costs and identifying billing errors
- Hire professional medical bill reviewers – for complex or expensive issues, their expertise pays for itself
- Dispute every error – keep meticulous notes and aggressively push back on incorrect charges
- Negotiate lump sum settlements – offer to settle disputed bills for a percentage of the amount
- Take recalcitrant providers to small claims court – avoids hiring lawyers over smaller billing fights
Fearlessly challenging healthcare providers forces them to address errors and overcharges. Don’t take no for an answer – be prepared to escalate your fight up the chain of command until you find someone willing to investigate and correct billing issues. Persistence pays off.
Strength in Numbers: Join Forces with Other Patients
While one person may struggle to get providers to address billing complaints, a large group of patients can apply overwhelming pressure. Allen describes how patient advocacy groups have effected change in the past:
- Class action lawsuits have recouped millions for exploited patients
- Prominent social media campaigns have confronted unethical providers
- Grassroots petitions or boycotts embarrass providers by raising public awareness of overbilling practices
- Forming patient unions allows combining negotiation leverage and resources
Banding together with other victims of healthcare billing fraud multiplies the pressure on providers to reform unscrupulous practices. There is strength in numbers.
What Can Employers and Insurers Do?
While the bulk of Never Pay the First Bill focuses on equipping individual patients, Allen also has advice for employers and health insurance companies looking to tackle overbilling issues. He suggests they:
- Audit bills and flag outliers before paying
- Hire medical billing advocacy services to identify errors
- Negotiate fair pricing by leveraging their patient volume
- Structure health plans to incentivize pricing transparency from providers
- Push back against balance billing when providers won’t join networks
- Educate employees on how to be savvy healthcare consumers
By being proactive and exerting their influence, employers and insurers can drive positive reforms in healthcare billing.
The Bottom Line
The Americna healthcare system may seem rigged against us, but with knowledge, tenacity, and solidarity, we can fight back against predatory billing practices. Marshall Allen’s book Never Pay the First Bill empowers patients, employers, and insurers to regain control over healthcare costs. While the entrenched healthcare industry won’t reform itself without a fight, we can force change through education, proactive negotiations, relentlessly challenging billing errors, strength in numbers, and vocal advocacy. Don’t be a passive victim – learn your rights as a healthcare consumer. We have more power than they want us to believe.
Legal experts say just because you received care doesn’t entitle a hospital to a bonkers high price. Still, fighting an unreasonable bill takes some work.
This is part four of our series on hospital prices. Check out part 1, part 2 and part 3.
Hospitals now have to tell you their prices. That could help you plan where to get care.
But today, let’s talk about how it could possibly save you hundreds or thousands on a bill you’ve already received.
Here’s a crib sheet.
Demand a copy of the itemized bill.
Former ProPublica reporter Marshall Allen has investigated the health care industry for 15 years. His book, Never Pay The First Bill, lays out some of the best advice you’ll find anywhere on how to avoid getting ripped off.
Start with the suggestion made in the book title. That first bill you receive often shows vague totals.
Allen compares that to leaving a grocery store with a receipt that says you spent $54.50, but that won’t disclose how much you paid for the milk or anything else in your cart.
Demand an itemized bill every time, he says. You have a right to it, and can get it from the hospital or your insurer. You want to know every service, billing code and price.
Now check for errors and price gouging.
Sometimes bills are wild. Allen writes about one woman who got billed $1,200 for a pregnancy test. In another case, a biller wanted more than $300 for a medical exam that never took place.
“If it’s not accurate and if it’s not fairly priced, well, then you contest the bill,” he said. “Even to the point of suing them in small claims court if necessary.”
In the case of errors, demand that the hospital fix them. Loop in your insurer and, if you have job-sponsored insurance, your employer. After all, your employer wants to save money, too.
And request your medical records. You may find you were billed for services you didn’t receive. (Allen’s book offers more details on this.)
Next, look up prices. Start on your hospital’s website.
Pore over the site for a “price transparency” section. Try Googling the hospital name with the phrase “price transparency.” You’re looking for a page on its website where you can download the full price list.
Many hospitals don’t make this easy. They embed html code to block their price lists from web searches. I’ve also found some hospitals bury their price files under obscure headings like “Legal” or “CMS,” make the links weirdly small and inconspicuous, or tuck them into odd corners of a page.
Marshall Allen: Never Pay the First Bill Book Review
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