Several new reports have indicated that, facing rising healthcare costs and high-deductible health insurance or no insurance, patients and consumers are increasingly negotiating lower medical bills directly with their doctors, hospitals, and other health care providers. And, new resources are becoming available to help individuals negotiate lower medical bills or find lower cost but high quality health care services.
According to an April 6 CNN report, with medical and health insurance costs constantly rising and people struggling to pay their health care bills, “Increasingly, medical providers are willing to negotiate with patients on the cost of care, particularly when the alternative is the risk of not getting paid at all.”
Americans Struggling with Rising Healthcare Costs & Less Insurance
A national survey from the Center for Studying Health System Change and the Robert Wood Johnson Foundation found that “one in five Americans reported trouble paying medical bills last year.”
Approximately 50 million Americans do not have health insurance, according to Congressional findings based on U.S. Census data cited in an Appendix (p.10a) to the Government’s Brief to the Supreme Court on the health care law. This will be remedied in large part by the new health reform law, the Patient Protection & Affordable Care Act (“Affordable Care Act”), but not before 2014. Assuming the Supreme Court does not strike the law down, “The Congressional Budget Office (CBO) has projected that, by 2017, the Affordable Care Act will reduce the number of non-elderly individuals without insurance by about 33 million,” according to the Government’s Brief to the Supreme Court (p. 5).
Meanwhile, however, studies have shown that those who do have insurance increasingly have high-deductible plans in which the first $1,000 per year, and often up to the first $5,000 or more per year, of medical bills is not covered by insurance and must be paid by the patient.
These factors are causing more and more patients to struggle with paying medical bills, and increasingly, to forego needed care.
The other option, which is now receiving increasing attention, is to negotiate, preferably in advance, with your doctor, clinic, hospital, or other health care provider for lower prices.
“The era of health insurance covering everything is disappearing,” John Santa, director of the Consumer Reports Health Ratings Center, a research arm of Consumer Reports, told CNN. “All of us are going to need to evaluate what role we can play in negotiating about our health care and its cost.”
Tools and Resources to Help You Determine a “Fair Price” for Medical Services in Your Area
“Healthcare Blue Book,” a new website created by Jeffery Rice, a Nashville-based MD, provides resources to help consumers determine the true cost of a treatment in their geographic area, so they can better negotiate fair prices with their health care providers.
The “Healthcare Blue Book” is searchable by zip code and health care service or procedure to find the “fair price” for medical services of that type in your area.
According to the site, “The Healthcare Blue Book price represents a fair price to pay for a service or product when the patient is paying cash at the time of treatment. It represents a payment amount that many high-quality providers accept from insurance companies as payment in full, and it is usually less than the stated “billed charges” amount.” “The fair price is calculated from billing and medical payment data. It is usually the average fee that providers in your area accept as payment from an insurance company for a particular service,” the website explains.
“Begun by a team of E-Health experts, Healthcarebluebook.com is dedicated to helping people better manage their healthcare by providing them with the knowledge and tools they need to shop for and receive a fair price for their healthcare services,” the site explains.
According to its founders, “The new web site, the first to offer pricing data for healthcare services on a national basis, provides pricing and treatment information for surgery, hospital stays, doctor visits, medical tests and much more. It allows people to search by type of doctor, procedure, hospital, and other criteria to find out what a fair price for treatment is in their area. The Healthcare Blue Book fair price is based on an average of the negotiated price that health plans pay to their network providers for a service in a specific market.” “The fair price is calculated from billing and medical payment data,” the site states.
In a section with consumer resources, the Healthcare Blue Book explains how health care providers often set prices, and what prices consumers can expect to pay:
Most providers have a standard fee that they ask for their services. This standard fee is frequently called the billed amount. You can think of the billed amount as the list price, or the “sticker price”. Insurance companies negotiate with providers to pay a fee that is usually far less than the billed amount. The negotiated fee is frequently called the “allowed amount” for services.
Providers’ billed amounts are typically 2 to 5 times higher than the allowed amount they accept from the insurance company as payment in full. The allowed amount sounds like a great deal for consumers, but there is a catch. Insurance companies often negotiate a different allowed amount with each provider for the same service. For example, a recent Thompson Healthcare study reported that insurers frequently pay an allowed amount of between $500 and $3,000 for the same MRI. With such a large difference in cost, most consumers should ask their doctors about price before receiving treatment!
Patients without insurance are often charged the sticker price with no discount off of the billed charges.
How much should I pay for my service?
Regardless of whether you have health insurance or are uninsured, you should pay a fair price for healthcare services.
Uninsured patients should never have to pay the full billed amount for healthcare services. The good news is that if you are uninsured and are paying cash for your healthcare services, many providers will accept a price that is lower than the standard billed amount. But, in order to receive the lower price you have to ask your provider for the discount.
The Healthcare Blue Book will help you identify the fair price for services.”
“Healthcarebluebook.com is new, and as it grows, we envision a network that will help people learn about, evaluate, price and select their healthcare options,” its founders state. “Think of it as a site that will match patients with qualified doctors and other providers who charge affordable prices. Models of this type of service in other industries include Lending Tree (home loans), ServiceMagic (home improvement) and Expedia (travel).”
Advice on How to Negotiate Prices with Medical Providers
“If you go in and ask a doctor or hospital how much something costs, they are going to tell you their highest price,” John Santa, the director of Consumer Reports Health Ratings Center, a research arm of Consumer Reports, told CNN. To negotiate a much lower price “you have to ask,” Santa said.
Here are some steps that Healthcare Blue Book suggests that employers offering high deductible health plans should share with their employees to help them get lower health care prices, according to a press release issued by the company:
- Ask the doctor to clearly explain the healthcare service you need. “Don’t be afraid to ask your doctor, or another medical professional in that office, to be specific about the procedure or test and discuss it in plain language,” the release advises.
- Determine what a fair price is for your treatment or test in your market. Check the “Fair Price” listed by Healthcare Blue Book for that treatment or procedure in your area.
- Find out how much your provider charges, and compare it in advance to the Healthcare Blue Book “Fair Price” for your area.
- Compare prices from several providers. “Call provider offices and request the price for the service. Compare prices from three to five providers. And remember to consider different types of providers that can provide your service.” the release advises.
- Get the agreed upon price in writing. “If you are using out-of-network providers or if your provider quoted you a price that is different from its plan agreement, you should get a copy of the agreed upon charges in writing. This way you have a record of what you should be charged in case you receive an incorrect bill.”
WebMD offers some additional tips:
- “Simply speaking up about money can make a difference in what you’ll ultimately pay,” according to John Santa, the medical expert with Consumer Reports. “When people are stressed financially, that’s helpful information [for a doctor] in terms of taking care of them medically,” he says. “That communication to some degree ends up being a negotiation.”
“Most doctors will be responsive, Santa says, and may offer you less expensive alternatives. For example, a watch-and-wait approach, as opposed to rushing into costly tests and specialist visits, can save a lot of money without necessarily sacrificing quality. So can generic drugs.”
- “Doctors can also use their relationship with local hospitals to help with big bills. ‘In most cases, if a physician gives the hospital a call and says my patient is struggling with a bill and asks them to help, they’ll do that,’ Santa says.”
- “Prescription prices vary widely from one pharmacy to another, so be sure to shop around for drugs, too. If you can’t afford your medications, talk with your doctor about programs that help patients get the drugs they need for free.”
- To help whittle down hospital bills, WebMD suggests:
- Insist on Efficiency. Ask to be admitted to the hospital on the morning of the procedure rather than the night before, and to be discharged as soon as medically safe and advisable.
- Demand focus. “Be clear that you want your care to focus on the particular procedure for which you were hospitalized. “Let them know, I don’t want anybody ordering another X-ray or set of blood tests. My doctor will take care of that when I’m discharged,” Santa says.”
- Don’t pay for mistakes. “Billing errors are common. Insist on an itemized bill and a copy of your medical record after treatment, and make sure they’re consistent. Don’t pay for any service, device, or drug you didn’t use. If hospitalization led to an infection, demand that any extra hospital days needed to treat it be removed from your bill.”
In this video, Consumer Reports offers encouragement and tips on how to negotiate down your costs of health care services:
Information on Free or Low-Cost Health Care Services Available
Many preventive care services are now offered free by Medicare and required to be offered free, to women and others, without patient co-pays or cost sharing, under insurance policies written under the Patient Protection and Affordable Care Act.
You can learn about what preventive services are covered at HealthCare.gov, and take advantage of these free services. However, if a free preventive service leads to other care, be sure to clarify the cost with your provider in advance.
In addition, if you don’t have and are unable to afford health insurance, you may have other options to receive free or low-cost care. HealthCare.gov provides information about several such other options, such as private insurance options, Medicaid, Children’s Health Insurance Program (CHIP), and Community Health Centers.
Planed Parenthood also provides low-cost health care services for women, including routine visits with a health care provider such as pelvic exams, Pap tests, and screenings for breast cancer.
See related HelpingYouCare™ reports on:
- Health Insurance & Long-term Care Insurance
- Medicare Coverage
- Medicaid Coverage & Asset Planning for Qualification
- Veterans Administration Benefits
- Other Financial Issues
- See the CareHelpFinder™ section for help finding a Financial Advisor
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