How To Properly Dispute A Medical Bill & Save Some Money (+ Billing Dispute Sample Letter)

With my pregnancy, my husband and I have never felt more familiar to our insurance and medical billing partners. My thankfulness is still an all-time high of course, but insurance is an annoyance on my sparkling, healthy, preggo parade. Everything people complain about the unnecessarily complex insurance and medical administration system is true. It’s really freakin’ true.

Just imagine Hell. Hell has got to be…where you expected an $85 bill but now you’re trying to find someone/anyone on the other end of the phone line (on a shoddy vulnerable connection) to answer why you were billed $2,000 for a set of routine labs.

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Hopefully, this article will help put an advocate in your corner for that ridiculous medical bill charge. There are a lot of hidden bombs in the minefield of insurance and medical billing so take this with you:

Common Medical Bill Errors

According to Medical Billing Advocates of America, 80% of medical bills have some form of error. Add this to the fact that medical bills can bury someone in debt, this is a critical issue for hospitals and insurers. Here are the most common medical bill errors that are commonly encountered in the US –

1. Typo of Patient Data 

People who handle patient information can make a mistake in encoding. One of the most common causes of this mistake is when the handwriting is hard to decipher or if the one who filled the form during admission was not a relative or acquaintance. There is also a possibility that upon encoding, the encoder might’ve switched two patient’s information, although it is not as likely to happen. 

2. Coding Errors

Hospitals and insurance providers have codes for their products and services, just like in grocery stores. The three usual code sets used are Current Procedural Terminology (CPT) codes, Healthcare Common Procedure Coding System (HCPCS) codes, and ICD-9 codes. You can usually find the code before the service description or in the separate column.

An example of an error is when you are billed with a major procedure instead of just a checkup because of a one-letter difference. There are free databases online where you can look up the code in your bill to confirm if you’re properly charged.

3. Duplicate Charges

Duplicate charges happen when you pay the same things, with either the same or different code. An example of this is when you are billed with your room usage twice on the same date. Another one is when you are charged separately for services that are actually included in your room package.

4. Canceled Tests or Procedures

This happens when you request to cancel a procedure, but they included it on your bill anyway. One common reason why this happens is when your doctor forgot to update the management about your procedures.

5. Unbundled Charges

Unbundled charges happen when instead of charging as a package, you are charged with separate services that make up a bundled package. As per Catalyst, an example of a bundled package are tests to diagnose UTI, Sepsis, and Congestive Heart Failure. They’re charging you with the right items, but because it is not charged as a package, the package discount is not availed.

6. Check Your Explanation of Benefits (EOB)

If you’re the one who usually ignores EOB documents, you should build a habit to check it for information inaccuracies. This document is sent by your insurer and includes the list of treatments that they will shoulder. In addition, this document also includes the amount that you would need to pay because it is not covered by your policy. Compare your EOB to your final bill to make sure that you won’t have to pay charges that are already paid by your insurer.

7. Location of Ordering Physicians

This one was what went wrong with us. Just because of this little misstep based on the location of our ordering physician – we had a pending charge of $8,000 that insurance and our physician had to settle back and forth (which has taken months and share of it is still on-going.) It should have been no more than $100.

Apparently, if you work for a large employer with insurance in different states, the location of exact coverage differs based on tons of factors, but they don’t tell you about it during pre-authorization. It still doesn’t make sense to us, my husband was so very annoyed. In this case, the uninsured price was cheaper than the insured price charge…so we negotiated to pay the uninsured price. Logic has no place here. I don’t envy anyone dealing with medical insurance.

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Steps In Negotiating Medical Bills

1. Review Your Medical Bill & Insurance Policy

Check your medical bills for possible errors. Make sure to tally the services you received and compare it to the final bill. Watch out for the errors listed above, use free internet sources to check the codes. And lastly, verify that you have the right information written in your final bill. It is also a great idea to review your insurance policy to save time if ever your insurer refuses to pay your bill.

2. Contact Your Insurer & Hospital Billing Department

If you found some errors and inconsistencies, the first thing you should do is to call your hospital’s billing office regarding the inaccuracy in your bill. Each information in this call is important, so take note of the conversation. If the inaccuracies are easy to correct, it can be easily done during the phone call.

However, if the problem is not resolved, the next thing you can do is to contact your insurer. The insurer will likely help you in filing your claims, especially if the claim will help in reducing your bills (which could also reduce their billings, especially in cases of duplicate charges).

You should also act on fixing the bills as soon as possible because unpaid medical debt will affect your credit score and it would take at least seven years to remove it. It is suggested that you also contact a credit-reporting agency to let them know that you’re disputing a medical bill.

3. Organize Your Hospital Documents

In order to win the dispute, you need to arm yourself with evidence showing the errors of your healthcare provider. If you’re not provided, you can ask for an itemized statement of your medical bill. You should also present documents from you and your doctor’s agreement if you refuse treatment but the hospital still charged for it. Results after the treatments are also strong documents to include in your appeal.

4. File Your Appeal

The next step is to officially make an appeal for your medical bill. Make a letter regarding the error and explain all your concerns in polite but detailed contents. Attach a copy of your files and evidence, as well as include the details of the conversation you had with the billing office including the time and date of the call and the name of the representative. You should both fax the letter and send it by mail. By sending a letter as soon as found an error, and if it is sent to collection, it should be noted as disputed.

5. Negotiate Your Bill

After the medical bill has been disputed, and the error of the billing department has been acknowledged, you will be given a new medical billing with adjustments. If you think you still need help after the adjustments and after exhausting your insurance coverage, try to negotiate the amount you owe for a lower price. The hospital will more likely work with you in restructuring the amount you owe if you show that you have the intention to pay.

You can speak again with the billing office and make a payment plan that can help you pay your medical bills. Don’t be shy and ask if they could reduce the price. Explain your financial situation and be honest about the details.

6. Consider Seeking Help From a Billing Advocate

This is for when all else fails. If the hospital won’t still honor the dispute, or if your insurer will still reject to pay your coverage, you should consider seeking help from a medical bill advocate. A medical bill advocate is a person that knows the medical delivery system and should help you in negotiating your bill. Although there are medical bill advocates that offer their service for free there are others who would charge for their services. But the fee is nothing compared to the money you’ll save in negotiation. You can find a billing advocate in both NAHAC or APHA.

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Sample Letter For Medical Disputes

In order to make a strong case, your medical bill dispute letter should be detailed but concise. You should also put important information such as your name, address, and contact information. Include the date of your billing along with a billing identification number. Elaborate the error and support it with solid evidence. Mention the involved code if the error is from a coding error. If the error is excessive charging, explain your point by comparing the cost of services in another area. Also, mention how you want to rectify the errors, but as polite as possible.

Sending a letter does not only notify the hospital about your concern in your medical billing. This is also a way to make them comply with federal requirements, as written letters are strong evidence. Creating a good letter is important should you ever have a problem with your dispute.

Here is an example of a billing dispute letter about an error in upcoding:

Jon Snow

Castle Black, North of Winterfell

The North, Westeros, 11122

Date: November 18, 2019

King’s Landing Hospital

The Crownlands,  Capital City

The South, Westeros, 110021

Billing Account Number: 123-456-789

To Whom It May Concern:

This is to notify the Billing Department that I am disputing a charge on my bill, which was dated November 15, 2019. The original treatment was done last November 14, 2019, which amounts to $100. I was admitted to your hospital because I accidentally bend my knee during an unfortunate accident. This required your technicians to take x-rays to fix my injury. However, upon checking the bill, I was charged with Electrocardiogram and some blood tests which I did not take amounting to $500.

Attached in this letter is the copy of the bill that I received with an ECG and blood tests charged into my name. Also attached in this letter is a copy of the result of my knee x-ray after your staff finished my treatment. As you can see, the result sheet indicates a knee x-ray and not ECG.

I would like to request a new bill wherein the ECG and blood tests are removed. I would also like the new billing to be sent as stated by the legal collection laws, which has a 30 days limit upon receipt of this letter.

I hope to hear from you as soon as possible upon receiving this letter. Please contact me at 555-098-1238 or at [email protected].

Thank you.

Sincerely, 

Jon Snow (printed name with signature)

Billing No.  123-456-789

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What Happens If You Don’t Pay Medical Bills?

1. Late Fees and Interest

Just like any other debts, your medical bill will start ballooning after its due date. The late fees, as well as interest rates,  will start to take their toll, and the longer time that you ignore your obligations, the more obligations you would get. That sounds cliched, but that’s what happens.

2. Credit Score Damage

As mentioned before, an unpaid medical bill will be very damaging for your credit score. According to the NCLC Digital Library, some hospitals will wait for several months before reporting to a credit reporting agency about your unpaid balance. However, there are hospitals that will report after just a month or two. This would make you pay your bills via credit card, but that’s not a good thing to do because credit card companies charge even higher interest rates than hospitals. Instead, you should opt for a bill negotiation and try to make a plan for monthly payments.

3. Hospital Can Decline You Services

When your balance remained unpaid, and you still won’t make an effort to make a compromise, it is likely that the hospital will decline their services to you. Although you can always go to other hospitals, this would be a problem if there are no other medical facilities in your place. However, they cannot decline your right if you need to be in the emergency room, as per the Emergency Medical Treatment and Active Labor Act or EMTALA.

4. Involvement of Legal Action. 

Yes, unpaid medical bills can turn into legal action when the collections agency cannot get any payment, or at least an intention to pay from you. Hospitals can sue their patients for unpaid medical bills, but they cannot really send you to jail. Instead, the hospital can request for wage garnishment, in which a portion of your wage will go directly as payment for your obligations. 

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What Are The Medical Bill Collections Laws?

When the hospital cannot get you to pay your bills, it will likely send your account to a collection agency. After a while, you’ll go to receive a lot of calls from their collection agents. These agents can pressure you, or even insult you to make you pay your dues. In this case, you have the protection of the Fair Debt Collections Practices Act or FDCPA. The collection agency would get in trouble if they call you at the wrong time, if their agent harasses you, or if you’re still contacted when you have your own attorney. However, this protection doesn’t apply if the original creditor (the hospital) will be the one contacting you.

Just like other matters, the collections law depends on the state where you live. There are states where consumers are initially favored while there are other states with weak consumer protection.

There are four areas that state the coverage of the rule such as FDCPA application, homestead and vehicle exemptions, bank account exceptions, and wages. Florida (head of the family only), Texas, South Carolina, and North Carolina require 100% wage garnishment.

Most of the states will take 75% of your wages, except in Alaska, where they can get wage garnishment between $456 to $716, according to Better Business Bureau.

States such as Alabama, Delaware, Indiana, Louisiana, and Pennsylvania will require even your auto as payment with no exception. States such as Colorado, Florida, Hawaii, Kansas, Louisiana, Michigan, Minnesota, Mississippi, Montana, Nevada, Oklahoma, Rhode Island, Texas, Utah, Virginia, and Wyoming will require you to empty your bank account to pay your obligations with no exception.

Are You Liable To a Late Medical Bill?

The truth is, you can actually ignore your medical bill for the rest of your life. However, the fact that the debt is still there will never disappear. If you’re willing to spend the rest of your life with bad credit and receiving harassing phone calls every day, that might be the ideal choice. But honestly, having a bad credit score isn’t worth it.

There is actually a statute of limitations on debt collection, and it largely depends on the state-by-state rules, as well as the category of debt (oral, written, promissory note, or open-ended agreement). A myth that your medical bills will go away after seven years is just a myth. The truth is, your debt will stay, but it will not stay enforceable after a few years.

In Louisiana, Oral, Written, and Promissory Note agreements would not be enforceable anymore after ten years. Rhode Island will stop honoring oral and written agreements after 15 years while Promissory Notes and open-ended agreements will stop in ten years. Meanwhile, in California, oral agreements will stop being enforced in two years, while the rest will be stopped in four years. However, since a lot of people don’t know this law exists, collection agencies will still call them to pay their debts. (source)

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Disputing a Medical Bill

1. Spot Common Coding Errors

Virtually, medical procedures are coded to facilitate collection from insurance companies. But there are instances when codes are mismatched out of an honest mistake. This means that the codes do not line up with your diagnosis and as a result, your insurer will most likely payment upon a claim.

To catch you up to speed, here some of the most common coding mistakes that you need to know, so when you talk to the billing department, you know exactly what to say.

2. Upcoding

This happens when you are billed for a treatment that is almost similar to what you received but is actually more expensive. Ex. When generic medication is billed for a name-brand medication.

3. Unbundling

Where services that should have been billed as a package were billed individually resulting into a higher medical bill.

4. Duplicate Billing

A common computer-generated issue that happens when you’re billed multiple times for one procedure.

5. Mismatched Billing

This happens when the code does not match your diagnosis. Hence, insurance providers will deny the claim and send the bill back to you.

6. Know The Cost of Every Procedure

It is important to know all the fees for every procedure. Being 100% aware of what is legit can help you spot the mistakes in your bill.

You do not have to conduct an extensive investigation to do it. Simply approach your healthcare provider and inquire about the exact prices for each procedure and other associated services. Any provider would be willing to lift the veil on pricing especially during the payment stage.

This way, you will know whether the numbers in your bill are accurate. If there are mistakes then it is time to show your negotiating skills. Here are some steps on how you can negotiate a price dispute.

1. Visit the hospital’s billing department and inform them of the mistake and request for re-adjustment of your bill. If the hospital provides a customer hotline, then make the necessary call.
2. Submit the necessary documentation to support your claim.
3. Wait for further instruction from the billing department as they verify the price discrepancies. Depending on the severity of the mistake, the verification may take one to three days.
4. If your claim is denied, you may file an appeal to the head of the billing department or to its dispute resolution officer. Normally, they will give you a timeline to hear back on the request (typically 3-4 weeks).
5. Make sure to leave an email or a contact number to the billing department. Once adjustments are made, you will receive a notice to make the payment.

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Check If You Qualify For Discounts

There are different discounts that you may qualify for depending on your situation and location. Some hospitals offer charity care programs that allow people with low income to avail 20 to 30 percent discount after what their insurance covers. There are also hospitals that give some discounts to their own employees.

The government have more financial aid programs for people in special situations. Persons with Disabilities (PWDs), for example, are entitled to a certain discount in public and private hospitals under the Affordable Healthcare Act. The discount cover purchases of generic and branded medicines, diagnostics, hospitalization, and rehabilitation services.

Older people (60 years old and above) can avail of a financial aid that covers hospital visits, medication, and nursing home care. Here are some steps you can follow to learn whether you can qualify for a discount.

1. Inform your medical provider of your unique situation. Are you suffering from any kind of disability or have you reached the senior age? Are you a hospital employee?
2. Submit a formal letter of your intention to avail of any of these programs. Sometimes, government initiated-discounts are automatically reflected in your bill.
3. In case you did not receive the discount, do not hesitate to contact the hospital’s customer service representative or billing department then request for re-adjustment if your bill.
4. Wait for the decision and file an appeal when necessary.

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