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Medical Debt is the Leading Cause of Bankruptcy

Medical Debt is the Leading Cause of BankruptcyPhoto from Unsplash

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In the United States, medical debt is the leading cause of bankruptcy. And even for those who aren’t in bankruptcy, medical debt is rampant. One in five Americans has medical debt in collections.

It raises the question: how did things get so out of hand? The sad truth is that a lot of people are getting very wealthy off the medical debt of regular people, benefitting from their problems.

Dr. Virgie Bright Ellington, MD, decided that she was going to take on the challenge and fight back. Dr. Ellington is an internal medicine doctor and has worked as a healthcare executive, giving her a 360-degree view of the problem. She saw, every day, how this affected people’s lives, and she knew that she couldn’t sit idly by anymore.

But what really pushed Dr. Ellington over the limit was a hospital stay she had after emergency surgery. The woman in the bed next to her had been persuaded, while lying in her hospital bed convalescing, to sign documents that would trap her into paying enormous debt, effectively for the rest of her life.

This woman was poor, taking care of children, and her husband worked at a 24-hour diner. She wasn’t in a position to pay tens of thousands of dollars of medical debt. Yet the hospital executives had her sign her life away.

How to Dispute Medical Bills–the Right Way

Not looking at your medical bills isn’t going to make them go away–it’s just going to make them grow. But there are ways that you can dispute medical bills and hospital bills, making sure that the health system doesn’t ruin your life with endless medical expenses.

Dr. Ellington has a three-step system for billing disputes. Best of all, Dr. Ellington is not going to charge you to find out what this plan is: she is giving away the knowledge for free!

Step One: Get An Itemized Bill with CPT Codes

Every medical procedure ever done, from a flu shot to an x-ray to bloodwork, has a billing code attached to it. There are literally hundreds of thousands of these codes, known as CPT codes. This is because the codes are extremely specific. A simple surgery may have dozens, if not hundreds, of codes attached to it: one for each medication and anesthetic, one for each instrument used, and one for every incision, and every injection.

And for each CPT code, there is a dollar amount attached. But this is where the problem lies. If you don’t know the CPT codes and have a knowledge of what each CPT code bill ought to be worth, then you don’t know if you’re being treated fairly by the medical provider.

So when you get a medical bill, it will almost always lack CPT codes. Reject any bill that doesn’t have a CPT code, and call the medical clinic or hospital and ask to speak with their billing department.

When you speak with them, demand that they get you a bill that is itemized by CPT code. They may give you the runaround, but make sure they know that you are not going to pay a medical bill that doesn’t have CPT codes. If they want you to pay the bill, they are going to agree.

Billing departments are trained to push back on you, to not give you the codes, because they know what you’re going to do with them. But you push right back. Say “I need the CPT codes as per HIPAA law.” They will eventually relent and give you the itemized bill.

Step Two: Google Search the CPT Codes

Thanks to the internet, we’re able to find out the true value of every CPT code. And by “true value”, the amount we’re looking for is the amount that Medicare is willing to pay for every medical procedure. If Medicare will only pay $15 for something, but your medical clinic is charging you $30, then you know something is wrong.

Go through the entire bill, start to finish–this may take a while depending on the procedures you’ve had, but it will be worth it–and make a list of the Medicare-approved amounts for each CPT code.

Step Three: Negotiate a Payment Plan Based On This Information

Now that you’re armed with the facts, you can call that billing office back up and negotiate a payment plan. If the original bill was for $10,000 but your research has shown you that you should only be paying $3,000, tell them that it’s all you’re going to pay. And show them the receipts! Tell them that you’ve done the research, that you know the value of every CPT code, and that you are only willing to pay the correct amount.

Now, a lot of people don’t like to be confrontational, and it’s true that some billing departments will argue back with you. What you need to know is that you are in the right. You have the correct information.

And, what’s more, this is your life and livelihood we’re talking about. You cannot afford to not be assertive with them.

And the truth? They will negotiate. This is because so many people are not paying their medical bills. Those millions of people who are in medical debt and bankruptcy are not paying their bills, so if a billing department at a hospital knows they can agree to get you to pay $3000–and actually pay it–rather than default on $10,000 and never pay it, then they’ll agree. Some money is better than no money.

A Few Warnings About Medical Debt

Now that you know how to negotiate your medical debt, there are a few things that you need to keep in mind. First, you should never, ever, put medical bills on a credit card. You will always be able to negotiate your medical bills to better terms than the interest rates on credit cards.

Second, you should be aware that medical debt shows up differently on a credit report than regular debt. It isn’t reported as soon–there is a 12 month window–and it doesn’t weigh as heavily on a credit score as consumer debt.

Also, be aware that these problems are almost always going to be worse with larger medical corporations. The bigger the medical clinic, hospital, or health network, the more likely they are to give you the runaround on your bill. That’s not to say you shouldn’t always be vigilant even with small doctors’ offices, but be more mindful of large ones.

Isn’t Health Insurance Supposed to Take Care of This?

A lot of people think that the health coverage they have will be the shield to keep them from paying exorbitant out-of-pocket costs. But insurance companies don’t want to pay either, so they’ll be more than happy to pass on the costs to you. Never assume that your insurance coverage, even if you have a good company, is going to do this negotiation for you.

Dr. Ellington Has Prepared a Patient Advocacy Checklist

To get all of this information and much more, Dr. Ellington has prepared a checklist that outlines 3 simple steps to dispute medical bills, negotiate payment plans, and crush your medical debt.

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