Longtime AFM reader, Don, volunteered to write a post detailing his experience in dealing with medical bills and insurance companies. It would be worth your time to read this. Thanks to Don for writing this.
The financial consequences of a significant medical event.
In February of 2004, my wife suffered a thrombophilic stroke, which is a fancy way of saying she had a blood clot get stuck in her brain. This is the kind of thing that is not supposed to happen to thin healthy non-smokers in their 30s. In short, it was very rotten luck.
An ambulance took her to the emergency room early Saturday morning where she received a CAT scan and a test for meningitis. By late morning, she was transported by ambulance to a larger hospital 75 miles away. She received two MRIs on Saturday, another on Sunday and she spent the next 12 days in the hospital, about half in a neuro-intensive care unit, and half in a regular room on the neuro floor.
From the acute hospital, my wife was discharged directly to an inpatient rehabilitation hospital where she did physical, occupational, and speech therapy until the end of May. We left the rehab hospital for home and did outpatient therapy five days per week for the remainder of the calendar year (and more).
I have never added up all of the costs of my wife’s treatment, but our insurer probably made between $150,000 and $250,000 in medical payments that first year. Our personal cost was a bit over $2000 (our out-of-pocket limit), plus lots of headaches and frustrations.
It is probably no surprise that I have had more experience with medical billing than I ever desired, and from time to time people ask me for my perspective. I have had no formal training, just the sum of my experience. But I have never failed to have a legitimate medical claim paid, so I think my point of view might be worth something.
This is my (free) advice. You may get what you pay for.
1. Start off on the right foot.
The first thing you want to do once a medical emergency is stabilizing is notify your insurance company. Our emergency happened over the weekend, so I had to leave a confidential voice mail at the number on the back of my insurance card. One great tip is that hospitals employ people specifically to deal with insurance companies, and those people become your first ally in medical billing. I made sure first thing Monday morning that the hospital staff had called on my behalf to follow up with my insurance company. That way I could focus on my wife.
2. Become a cynic.
I don’t really mean you should become a cynic, but my second piece of advice will sound cynical. Buy a telephone tape recorder and record every conversation you have with anyone that concerns money (if it is legal to do so in your state). Keep a diary if you can’t record calls.
You need to start doing this right away, even though you won’t feel like it is necessary. When your medical situation is extreme and has just occurred, the insurance company will be very accommodating. But as your case continues, as it gets more expensive, there will become a point when things change. The company has to look after its bottom line, and they will attempt to cut you off. It is likely that they will be extremely unreasonable (they may even lie to you) when this moment comes, and you need that conversation on tape so you can review it later carefully.
You also need to record your other conversations (if they involve your bills or treatment). We unexpectedly received a call from a collector who very combatively attempted to get immediate payment (via credit card over the phone) for medical equipment that we had never even been billed for. I wasn’t expecting the call, and I didn’t get it on tape.
I eventually learned to start the tape, then answer the phone. If it was a friend calling, I just discretely turned the tape off. Otherwise, I kept a pad of paper next to the recorder, and I marked down date, time, and the setting of the tape counter for each call—along with a summary of the conversation.
3. The enemy of my enemy is my friend.
There are three players in the medical billing game. There is the provider (the hospital or doctor), there is you, and there is the insurance company. If you want your bills paid correctly according to your insurance policy, I recommend that you attempt to form a coalition with the provider against the insurance company. If you don’t have the cooperation of the provider, your job becomes substantially more difficult.
That means first and foremost, you do not pay your bill. If you pay the hospital, what incentive do they have to work with you against the insurance company? I am always very clear and direct about this. I will pay my portion of any bill in full as soon as it has been correctly discounted by the insurance company and applied to my deductible or coinsurance.
I also get to know the billing staff, as much as I can (and I sympathize, because their job sucks). When I have bills from the local hospital, I always go in person and I wait to talk to the same billing specialist. She knows I have never let a bill go unpaid, and that I always do my part to get my insurance to come through (to the tune of more than $100,000 by now).
When I have to talk to billing people on the phone, I always ask their name, and I ask where their office is. I do this for two reasons. One, it helps build rapport if you treat people like humans. It also helps to get the same person if you have to call again. Remember, you’re trying to build a coalition. I also like to know what state they are in so I can research the legality of taping our conversations without notifying the other party (I’m legal in Missouri, but if it is forbidden in their state that would make a difference in a lawsuit).
In my experience, billing specialists have quite a bit of influence over whether your account goes to collections or not. It is safe to assume that do not want your account going to collections. So be nice to the billing people.
4. A word about denied claims.
You are going to have denied claims. Some things are denied as a matter of routine. Ambulance charges are always denied as I understand. This is not something to get stressed over. Generally, the hospital will appeal the denial and the charge goes through the second time.
Many claims are denied over billing code numbers. If the doctor bills something under one code number, but the insurance company wants it billed under a different code number, your claim will be denied. Usually, this can be worked out with very little involvement from you. I generally check with my provider, let them know that I got a notice of denial, and ask about having the bill resubmitted.
Other claims will be denied for lack of “medical necessity,” which is a way of saying you did not need that treatment, or that it went beyond reasonable and customary care. This may be true or not. For example, many insurance companies will not pay for both a wheelchair and a walker, since both are ambulatory devices. However, if you can show evidence that each device serves a different function (because the walker gets you in and out of your house that cannot accommodate a wheelchair ramp), then you may get both claims paid.
If a denial drags out too long, you need to get involved. This means writing a letter. You can call, but you almost certainly have more rights when you write. One of my insurance plans required a physical letter within one month of a denial to retain full rights of appeal (and they tried to use that against me once).
Even if it seems that the doctor is going to handle an appeal successfully, if things looks like they will drag out beyond a month, I write a letter. The letter should be polite and it should have all of the relevant data about the claim. At a minimum, I always give the full name of the patient, the social security number of the patient, and the claim numbers and dates of services. I always state that I am writing to “appeal” the denials. I note the actions that have been taken already (say by the doctor) to resolve the matter, summarize why the claims are legitimate, and I ask for the claims to be reconsidered and paid.
Remember that coalition you formed with the medical provider? If you write a letter of appeal to the insurance company, I think it ays to call up your billing specialist (or drop by in person) and let them know. I generally never let a month go by on a bill without checking in with the provider, since I really hate working with collectors. Keep the billing people in the loop and they will (hopefully) keep your account out of collections.
6. Escalation of force.
A single letter will not always get your appeal resolved. Sometimes I have had to write a second letter and a third letter. This becomes a process of escalation.
When I write appeal letters, I always remember WWJD: What would a judge do? I imagine that somewhere down the line I might have to sue my insurance company. In practice, a suit will probably go to arbitration and not a court, but the relevant thing to remember is that some third party is going to be looking at the history of the claim and trying to decide what is the correct action.
You want to be able to bring in a set of letters that will leave the judge offended on your behalf. They should look at your letters and see that you are a patient person who made every honest effort to get this reasonable claim resolved. So, when you write your second letter, you make reference to your first letter. You lay out your claim again, in slightly stronger language. You are patient and persistent.
Your third letter refers to both your first and second letter. It may express polite exasperation. You are becoming frustrated, because you are doing everything right, and this keeps dragging on.
I personally save the word vexatious for the third or fourth letter. I once wrote, “It is impossible (for me) to distinguish between embarrassing incompetence and a vexatious business pattern designed to wear us down and thereby avoid paying our valid claim.” Naturally I was trying to express extreme frustration at the continued lack of progress. I was also letting the insurance company know, without explicitly threatening, that I was aware of Missouri’s vexatious denial law. (If an insurance company denies your claim just because they’re so damned mean, then they can be hit extra for punitive damages.)
Your insurance company may lie to you. It may be intentional, or it may just be that one representative tells you something and another representative tells your provider something different. I have found it extremely helpful on more than one occasion to go see the billing specialist in person, and we call the insurance company together. It is time consuming, but it is more difficult to lie to both of us simultaneously. It’s that coalition thing again.
8. A word about attorneys.
Don’t mention attorneys when you talk to people on the phone. It ruins the rapport that you are building with the billing specialist, insurance representative, etc. It shuts them down cold. You are talking to them because you need them to do something for you, and threats of any kind get in the way of that process.
If you need to threaten using an attorney, it would probably be best to do it in writing so you can craft the language just right. You’ll explain that you are so exasperated that you feel your only recourse will be the help of an attorney if this isn’t resolved presently. Remember, you are a reasonable person that has tried every other possible avenue first. You can only threaten this once and remain credible, so save it until you really are only one step from getting legal representation.
If you do go to an attorney (and I did once), ask around. Attorneys are good at different things. Some are good at divorces, some are good at defending insurance companies, and some are good at winning judgments from insurance companies. Be assured that your insurance company knows whom they don’t want to cross swords with. A quick success with a $100 letter from an attorney who routinely cleans the clocks of insurance companies is better than winning at arbitration or trial after an extended fight.
And don’t be intimidated by the opinions of experts (doctors) that work for insurance companies. Good doctors practice medicine. Bad doctors, who can’t make a living practicing medicine, work for insurance companies. If you have good doctors and valid claims, you should not fear going head to head with bad doctors. (One of our docs was good enough to point that out.)
9. Stress and persistence.
If this all sounds stressful, it is. During 2004 and 2005, I regularly received bills from the local hospital for amounts anywhere between $5000 and $15000 that would say (incorrectly), “Your insurance has paid their portion. The remainder is your responsibility.” Even when you know that’s a lie, it is stressful to get a bill for thousands of dollars every month.
But in my experience persistence pays off. I had one claim that I worked on from April 1 until February or March of the following year. I spent a whole day in December crafting the “vexatious” letter. Right about that time, my billing person at the hospital offered me a deep discount to just pay the bill, and it was tempting to accept her inducement just to end the stress. But I told her that I thought I was really close to winning. So she kept the bill out of collections for a bit longer, and eventually the win came a couple of months later, clearing away a $4000 bill. It saved me at least $2400 (I had been offered a 40% discount to pay it myself).
I steel myself with the expression, “Evil people shouldn’t win.” If your claims are for reasonable, medically necessary expenses, then they should be paid. That’s what you paid for when you paid your insurance premiums, and that’s the way it should work. Trying to deny you is good for the bottom line, but it is not “good.”
Insurance companies (and collection agencies for that matter) hire professional bullies, people who are good at being mean. Mean people have to work somewhere. But you should stand up to bullies.
The short summary.
You will have the most success against insurance companies if you are methodical, polite, and superhumanly persistent. Get the billing people for your hospital or doctor on your side, against the insurance company. Handle appeals in writing, with careful language that escalates over time. If your claim is legitimate, you are likely to win without needing the recourse (or expense) of an attorney.