Managing Medical Bills: How to Ensure Your Clients Aren't Overpaying for Medical Care

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Almost every American interacts with the healthcare industry (sometimes multiple times in a single month) whether from medical emergencies, routine doctor visits, prescription medications, or other healthcare needs. For most people, interacting with the healthcare industry isn’t something that can be avoided. 

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One would think that such frequent interactions mean most people have a good understanding of how their health insurance works and how much they can expect to pay for medical services. But medical bills are hard to read and digest, and they can even sometimes have mistakes.

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Even as an expert in financial planning, you may not have all the information you need to create a truly comprehensive financial plan for your client when it comes to planning for and managing their healthcare needs. And sometimes, clients don’t realize they need to integrate healthcare into their financial plan until they’ve already been hit with expensive medical bills.

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It’s important, however, to take a proactive approach when it comes to incorporating healthcare into a comprehensive financial plan. Below are a few ways you can help clients manage their medical costs and ensure they’re not overpaying on their medical bills.

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Avoid Overpayment

There are a few things you can do to help clients avoid overpaying on medical costs and save money on future bills, including simple actions such as:

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• Carefully reviewing each bill.
• Asking providers about alternative prescriptions (i.e., generics over brand names).
• Avoiding out-of-network care providers.
• Appropriately assessing urgent versus emergency care situations.

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Carefully Review Medical Bills 

The most important thing clients can do to ensure they’re not overpaying for medical care is to carefully review all medical bills they receive to catch any mistakes. The three main mistakes they can look out for are incorrect patient information, incorrect procedure information, and duplicate billing for the same medication or service. 

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Mistakes do happen, and clients can make sure they’re not being mistakenly charged for another person’s medical care or a procedure they didn’t actually receive. (A simple code error can result in this happening, and is a surprisingly common mistake.) Additionally, duplicate charges are easy to spot, but only if you’re looking for them.

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To complete a thorough review of medical bills, your client can request an itemized receipt from the hospital or healthcare provider. An itemized receipt provides a comprehensive list of each item or service the patient is being charged for, which allows patients to easily check for accuracy. If they notice any mistakes or aren’t sure about any of the line items, they can call the healthcare provider’s billing department to ask questions and possibly dispute the charge.

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If your clients are insured, they can also compare their medical bills to their explanation of benefits to ensure the insurance company is actually paying for what they said they would. If they find a procedure or medication that should be covered but wasn’t, they can communicate with the insurance provider and resubmit their claim if necessary.

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Ask About Prescription Alternatives

Prescription drugs are another area clients may be able to reduce medical costs. If prescription costs are much higher than expected or planned for, there are a couple of things clients can discuss with their provider.

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First, they can see if there is a generic option available for their medication. People often unknowingly pay more for name-brand medications that are no different in chemical composition from generic options.

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Second, your client can ask their provider or pharmacist if long-term medications are available to purchase in bulk. Sometimes, it can be cheaper to get, say, a three-month supply of medication than it is to have to pay for each month individually.

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Above all, simple things like looking for coupons or reminding clients to have conversations with their healthcare providers about their financial concerns so the healthcare providers can suggest alternatives go a long way. 

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Out-of-Network Providers

If your clients have health insurance, it is very beneficial to check and make sure they’re only going to doctors within their insurance plan’s network. They’ll likely end up having to pay much more in medical costs if they’re going to physicians outside their network, as those services won’t be covered at all. 

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If they need assistance in determining which providers are in-network, they should contact their insurance company, which will be able to provide them with a list or website where they can search specific care providers to see if they’re covered.

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Of course, there are exceptions when a client has to see an out-of-network provider, such as if they need to see a specialist in order to receive the best care. However, it’s best to avoid seeing out-of-network providers if possible and contact their insurance company in advance to understand associated costs. 

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Emergency Room vs. Urgent Care

Many people often make the mistake of going to the emergency room for issues that can be handled much more affordably at an urgent care facility. Urgent care centers can be a great option for individuals needing care outside of their primary care provider’s office hours. 

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For both insured and uninsured people, it is usually cheaper to go to urgent care as opposed to the ER. And if their insurance or healthcare providers offer it, you can also remind your clients to consider telehealth services for minor medical needs, which may be cheaper than in-person visits. 

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However, it’s important to note that for serious medical emergencies, it’s better to go to the emergency room to receive appropriate medical attention. 

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How to Deal With Medical Bills

If your client has already been put in an unfortunate financial situation as a result of high medical bills, there are a few things they can try to reduce the financial burden.

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Act Quickly

If the goal is to reduce the bill and resulting financial strain, it’s important to act quickly. Clients should explore their available options as soon as possible. The earlier they deal with a medical billing issue, the more likely they are to have positive results. As their financial advisor, you can help advocate for them and guide them through this process.

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Financial Assistance Programs

Most hospitals have income-based financial assistance programs. If a client is trying to manage an outrageous medical bill, one of their first steps should be to contact the hospital to see if they qualify for a financial assistance program. If they meet the requirements, this could be a relatively easy way to reduce a significant amount of financial strain.

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Negotiate

Although it may seem intimidating, patients can surprisingly negotiate medical bills with the hospital or healthcare provider. There are a few different ways to go about this.

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If your client is uninsured, hospitals often charge something called the chargemaster rate, which is a different (often higher) price for products and services than what they charge most insurance companies. One way to reduce a medical bill is to request a different rate. Oftentimes, people in this situation ask for the Medicare rate.

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Another negotiation option is offering to pay a decent percentage of the bill up front for the forgiveness of the remaining total of the bill. If that isn’t accepted, the client can also offer to make a down payment in return for a discount on the remaining cost. Many hospitals and other medical facilities are familiar with these types of negotiation deals. 

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It’s worth noting that once you agree to a negotiated rate, you can’t go back. This will be the amount your client is held liable for.

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Payment Plans

A frequently used option for managing steep medical bills is establishing a payment plan with the hospital or healthcare provider. Splitting up medical debt into monthly installments can make it much easier to manage. Of course, clients should be sure to consider all their other monthly expenses when determining what monthly payment they can afford. 

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Overall, medical debt is an issue many people face in their lifetimes. While medical debt is important to take care of, it’s also considered less urgent than other forms of debt. Due to this, clients don’t need to pay off medical debt with a credit card. It may seem like an easy fix, but paying a medical bill with a credit card can turn (often) interest-free medical debt into high-interest credit card debt.

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Similar to negotiated rates, a determined payment plan will lock your clients into that fixed amount owed.

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Appealing the Bill

If your client believes there’s an inaccurate charge or a service that should be covered by their insurance company, they do have the choice to appeal it. This is why having a thorough understanding of the insurance plan and what’s covered is an integral part of managing one’s finances.

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Have your client call the insurance company to understand why the charge wasn’t covered. Depending on the response, they can follow the appeal process often outlined in the summary of benefits. This process can be long and strenuous, but at times it can result in big wins.

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Partner With Caribou to Help Your Clients Plan for Medical Bills

While you may be an expert financial planner, you may not be an expert in things like medical billing, coding, and healthcare negotiation techniques. At Caribou, we partner with comprehensive financial advisors to make healthcare simpler and ensure everyone is well-informed in their healthcare decisions. 

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The next time a client has a financial medical emergency, you don’t have to wonder if you’re giving them the best advice. We can help you make sure both you and they are aware of all their options. To see if we can help you provide the best healthcare planning advice to your clients, click here to schedule a conversation today.