MONEY Health Care

The Danger Lurking in Your Medical Bills

Claire Benoist

Medical billing errors are more common—and more costly—than you might think. Here's how to give your bills a checkup.

Odds are, there’s a mistake in the medical bill that’s in your mailbox. A recent NerdWallet analysis of 2013 hospital audits by Medicare found that an average 49% of bills contained errors, and that some medical centers messed up on more than 80% of claims to Medicare.

Such errors now matter more than ever to consumers: Greater health insurance cost sharing means that a mistake can take serious money out of your pocket. “If you’re responsible for the first $5,000 or $10,000 of your care, you’re going to want to be more attentive,” says Stephen Parente, a professor at the University of Minnesota’s Carlson School of Management who studies health finance.

But billing errors can be tough to spot, and tougher to remedy. Disputes can go on for months, and if you don’t take the right steps, your account could be put into collections in the meantime—a recent report by the Consumer Financial Protection Bureau found that a whopping 52% of all debt on credit reports is due to medical bills. Follow these steps to ensure a clean bill of health:

Understand your bill

Step one is knowing exactly what you’re being charged for. Can’t tell from the bill? Ask the provider for an itemized statement, says Pat Palmer, CEO of Medical Billing Advocates of America, a professional organization that assists individuals and companies with medical costs and disputes. Doctors use standardized numerical “CPT” codes to categorize treatments, and you can Google the numbers to find out what they stand for.

Question discrepancies

If the price strikes you as high for the services rendered, “follow your gut and investigate,” says Mark Rukavina, principal at Community Health Advisors, a hospital consultancy. Your insurer may offer an online price transparency tool. If not, try, a website that shows the average cost by area for 70 non-emergency diagnoses and procedures. A big discrepancy suggests that you should start asking questions.

Next, compare the bill to the explanation of benefits you get from your insurer. If these differ on the amount you owe, that can be another red flag, says Erin Singleton, chief of mission delivery at the nonprofit Patient Advocate Foundation.

Source: Consumer Financial Protection Bureau

Diagnose errors

Even if you don’t have sticker shock, give your invoice a close read. Some common mistakes can be easy to spot. They include services that weren’t performed, tests that were canceled, and duplicate charges, says Kevin Flynn, president of HealthCare Advocates.

Palmer says one of the more frequent errors she sees is providers charging patients separately for things that are supposed to be under one umbrella, such as a tonsillectomy and adenoid removal. Ask your provider about this if you are billed item by item for something that might be one procedure.

Remedy the problem

When you spot an error, ask the billing department to start a formal dispute. Put your concerns in writing. Include any documentation you have and request that the provider support its claim as well, says Palmer. Also, notify your insurer, which can be a good ally if the company will be on the hook for part of the charge.

Typically you don’t have to pay disputed charges until the investigation is complete, but do pay the rest of the bill. And always respond promptly to billing communications so that charges aren’t sent to collections. That’s a very real risk; one in five credit reports is married by medical debt, with an average of $579 in collections. Fortunately, relief is on the way—the three major credit agencies recently agreed to institute within the next few years a 180-day grace period before adding medical debt to credit reports (now there is no official grace period) and to remove debt from a report if the insurer pays the bill.

Rukavina says that, with persistence, you should be able to resolve most disputes on your own. But if you’ve been fighting to no avail for more than a month or so, consider hiring a medical billing advocate to work on your behalf. Find one via or You’ll likely pay an hourly rate starting at around $50 or a fee of about 30% of what you’ll save. But that could be pocket change compared with what you’d owe otherwise, not to mention what a ding to your credit score could cost you.

Read Next: The Debt You Don’t Know You Have

MONEY Health Care

5 Ways to Save on the Mental-Health Care You Need

Group therapy can be 50% less expensive than one-on-one sessions.

Get the treatment you need at a price you can handle.

Affordable mental-health care has been easier to come by in recent years. Insurance coverage, once riddled with onerous caps and restrictions, is now more widely available. “Things have gotten better for many,” says Andrew Sperling, director of federal advocacy at the National Alliance on Mental Illness.

Still, paying for care can be a challenge. The high out-of-pocket costs that you’re facing for all your health care extend to behavioral coverage too. And low reimbursement rates and billing hassles have led many therapists to not take insurance. A study published last year in the journal JAMA Psychiatry found that only 55% of psychiatrists accept private insurance; for all other medical specialties, that figure is 89%.

Here’s what you need to know about finding the best treatment at the best price.


Insurance Options are Better

Under a 2008 law that took effect in 2010, health plans offered by large employers that include mental-health coverage must treat it like other medical care. So a plan can’t cap annual visits or impose prior authorization rules for behavioral health if it doesn’t do the same for other illnesses, says Jennifer Mathis, director of programs at the Bazelon Center for Mental Health Law. Co-insurance rates have to be the same too. As the graphic above shows, the parity law hasn’t discouraged employers from offering coverage.

Any individual plan you buy on a state insurance exchange must include mental-health coverage; it’s one of the 10 essential benefits required by Obamacare. The provision in the law that lets children stay on a parent’s health plan until age 26 is another boon, since most major psychiatric conditions show up in late adolescence or early adulthood, notes Debbie Plotnick, senior director of state policy at the nonprofit Mental Health America.

Medicare coverage is also better. As of 2014, benefici­aries are responsible for only 20% of mental-health costs, down from 50%.

Your Employer Can Often Help

Especially if you have a high-deductible health plan, start with your company’s employee assistance program, says Kathleen Mahieu, leader of behavioral-health consulting at benefits consultancy Aon Hewitt.

About three-quarters of employers offer an EAP. These programs typically provide five or six sessions of no-cost counseling, even for family members. That’s enough for some people to resolve their issues, says Katherine Nordal, the American Psychological Association’s executive director for professional practice. An EAP can help you find a provider or connect you with other mental-health resources. “It’s a one-stop shop,” says Mahieu. And, she adds, EAPs pride themselves on confidentiality. Your boss won’t know, and you don’t even have to give your name.

Your Bill is Negotiable

When your therapist isn’t in your insurance network, you’ll have to pay upfront and submit the bills for partial payment (assuming you have out-of-network coverage) or, if you’re in an HMO, pay in full. Even if you are reimbursed, you won’t get back, say, 70% of the bill. You’ll get 70% of what the insurer considers “reasonable and customary,” leaving you on the hook for the rest.

If you can’t find an appropriate provider in your plan, ask your insurer to negotiate what’s known as a single-case agreement with someone who’s not in your network, says Barbara Griswold, a licensed marriage and family therapist in San Jose. That would let you to pay the in-network rate.

You can also ask about a reduced fee, says Griswold. “Almost every therapist has a sliding scale,” she says. Be realistic about what you’ll be able to afford and how long you’re likely to want therapy.

You Have Other Ways to Save

A university with a graduate psychology program may have a clinic, says the APA’s Nordal. Care is provided by doctoral trainees who are supervised by licensed psychologists. In an urban area, you may be able to find postgraduate training programs in psychoanalysis or cognitive behavioral therapy for experienced psychologists, says Geoffrey Steinberg, a licensed psychologist in New York City. (Google “training clinic” and the specialty you’re looking for.)

Another option: Ask your therapist if your condition might benefit from group therapy led by an experienced psychologist, which can be 50% less expensive than one-on-one sessions. Says Steinberg, “Group is so underrated and can be so valuable.”

Know Which Treatment Is Best for You

“No single therapy works for everybody,” says Renée Binder of the University of California at San Francisco’s School of Medicine. Consider these approaches for five common conditions.

1. Mild to moderate depression: Go for cognitive behavioral therapy (CBT). “A therapist works with you to break negative thought patterns by teaching specific skills,” says Binder. You might learn, for example, to ID overly critical self-talk (“Everything I do gets screwed up”) and reframe it in a positive way (“I flubbed a presentation, but I know I can rock it next time.”)

2. Severe depression: Combining antidepressants with CBT is better than meds alone, a recent Vanderbilt University study found. You need to see an MD or a psychiatric mental-health nurse practitioner for the prescription, but you can get therapy from a social worker or a psychologist.

3. Social anxiety: Your best bet is either CBT or psycho­dynamic therapy (in which you explore how your past experiences and unconscious affect you). In a study published in July in the American Journal of Psychiatry, these methods were equally effective at easing social anxiety.

4. Panic attacks: CBT is usually the treatment of choice. Some research suggests psychodynamic therapy may also work: A Weill Cornell Medical College study found that 12 weeks of biweekly sessions significantly reduced symptoms in more than 70% of patients. Medications may also be used.

5. Trauma: Look for a therapist who offers trauma-focused CBT or EMDR, which stands for eye movement desensitization and reprocessing (you’re asked to recollect the event while doing a motor task such as side-to-side eye movements). “Antidepressants and anti-anxiety meds are helpful in the short term, but therapy works to change thought patterns long term,” says Binder.


MONEY Health Care

5 Things to Do by Year-End

Want to better protect your health and wealth as we head into the New Year? Try taking these five steps.

1. See a doctor if you’ve met your deductible …

The average deductible has nearly doubled since 2006, reaching $1,135 in 2013, reports the Kaiser Family Foundation.
If you’ve hit yours this year or you’re close, schedule elective procedures ASAP, while your insurer will pick up most of the tab. If not, push off appointments until 2014, when the costs can be applied to your presumably even larger deductible.

“It’s smart to consider what your health needs are,” says Tracy Watts, senior partner at Mercer.

2. … or a dentist if you are below the max

Dental plans typically pay out no more than $1,500 to $2,000 a year, according to the National Association of Dental Plans — a limit you can easily blow through when you’re facing any kind of serious work, like a root canal, crowns, or a full-mouth deep cleaning. So you want to space out appointments to get the most from your coverage.

Do what you can this year to reach your 2013 maximum, then go back in January or February to work on next year’s cap.

3. Don’t give up on tax breaks

Starting in 2013, medical expenses must exceed 10% of your adjusted gross income before you can write them off against your federal taxes, up from 7.5% last year.

Think you won’t qualify? Don’t toss those receipts just yet. Some states have lower thresholds — New Jersey’s is 2%, Alabama’s is 4%, and Massachusetts’ is 7.5%. And for those 65 and older, the federal threshold stays at 7.5% through 2016, notes Brian Haile, senior vice president for health policy at Jackson Hewitt.

4. Grab your wellness rewards at work

At more than a quarter of large firms, employees can earn gift cards, trips, stuff, or a few hundred dollars in cash by participating in wellness programs, such as screenings that measure your weight and cholesterol or questionnaires about your health habits, and those rewards run out at year-end. (A smaller number reward you by adding to a health savings or health reimbursement account.)

Now’s the time to see if you can nab some easy cash, says Watts.

5. Check your FSA

Health flexible spending accounts have been use-it-or-lose-it. Unless your boss gave you until March 15 to spend the money (about half of big firms do, reports WageWorks), you forfeited what was left on Dec. 31.

In October the Treasury Department revised the rules to let you carry over $500, but only if you don’t get the grace period and your company changes the plan in time. Since you can put $2,500 into your FSA, you could have a balance to spend now.

MONEY health insurance

What’s Next for Retiree Health Care

Photo: Shutterstock Fewer companies are offering retiree health care benefits. Even if you get benefits from a former boss, you'll see some changes.

When it comes to getting health coverage from your old boss, the landscape is changing fast, and not just for early retirees.

Companies have been cutting back on retiree health benefits for years. Indeed, the latest survey by the Kaiser Family Foundation (KFF) found that among large firms with employee health coverage, just 28% offer some form of retiree benefits, down from 66% in 1988. Among smaller firms, help is even scarcer.

Disappearing corporate benefits is one reason the new public exchanges created by Obamacare will be such a boon to early retirees. But even for seniors who still get help from a former boss, change is afoot, no matter your age.

Here’s what to watch for:

Early retirees: If the public exchanges succeed, firms that offer pre-Medicare coverage may give those ex-workers funds to buy a policy on one, says Tricia Neuman, director of KFF’s Program on Medicare Policy. Employers are taking a wait-and-see approach, but that could change fast.

Retirees 65 and up: About a third of Medicare recipients have supplemental coverage from a former employer, says Neuman, and some of them are already seeing changes. Several major companies, recently IBM and Time Warner (MONEY’s parent company), are shifting retirees 65 and older from company-run plans to private exchanges operated by benefit consultants and insurance brokers.

On a private exchange, you’ll be able to pick supplemental Medicare coverage from a host of options, using funds your employer contributes to a tax-free health-reimbursement arrangement, or HRA.

For now, companies making this shift aren’t necessarily cutting back on how much they’re spending on your health care, says Paul Fronstin, a senior research associate at the Employee Benefit Research Institute (though IBM capped its contribution years ago). But how you’ll fare over time will depend on the employer subsidy keeping up with premium hikes, says John Grosso, health care actuary at Aon Hewitt. If not, you’ll pay more.

You or your parents may leap at the chance for more choices, or be overwhelmed by the sign-up process. It’s similar to open enrollment, but with potentially more options.

“Make use of all the tools out there,” says Sandy Ageloff, Southwest health and group benefits leader for Towers Watson, which owns Extend Health, the biggest private exchange. Tools include phone counseling at the exchange; the typical initial call runs about 80 minutes, Ageloff says.

MONEY Health Care

Affordable Alternatives to Cosmetic Surgery

Photo: Kevin Van Aelst Minor cosmetic treatments are increasingly popular and a cheaper alternative to plastic surgery.

You don't have to go under the knife or spend a fortune to improve your appearance. Here's how to cut the price of a pretty face.

Bothered by that crease between your eyebrows? Unhappy with the shade of your teeth? For minor problems you see in the mirror, you have easy alternatives to full-fledged plastic surgery.

While the growth of cosmetic surgeries has stalled, minimally invasive — and less costly — procedures such as Botox injections and laser hair removal climbed 20% over five years, to 13 million in 2012 (1 million of which were performed on men).

To get started, ask your primary-care doctor for a referral to an experienced specialist who is trained in the procedure you want, is prepared for any complications, and can discuss the risks and benefits.

Check out these four popular spruce-up options, along with strategies for beauty on a budget:

Botulinum Toxin Type-A injections

What they do: Remove wrinkles between the eyebrows, on the forehead, and at the corners of the eyes using a paralyzing toxin injected into the face. Botox is the best-known brand. Effects last three to 4½ months, says San Francisco dermatologist Richard Glogau
The cost
: $370 a session, according to the American Society of Plastic Surgeons, compared with $3,370 for a forehead lift. (Prices are national averages.) As is the case with the other fixes, you can’t deduct them on your taxes or pay with a flexible spending account
How to save
: Your doctor may discount your next visit if you schedule it while you’re still in the office; Salt Lake City plastic surgeon Renato Saltz, for example, knocks off 17%
Best drugstore alternative:
Over-the-counter retinol creams can improve the appearance of finer lines for $20 or so, but you won’t be able to replicate the shots’ ability to smooth your deepest wrinkles.

Teeth whitening

What it does: Lightens yellow or stained teeth with the application of a high-strength gel. Results can last about two years without maintenance, says La Jolla, Calif., cosmetic dentist John Weston.
The cost: $300 to $700, based on estimates from several dentists.

How to save: From your dentist, get a take-home kit with a lower-strength gel (price: $150 to $300). Using it for an hour or so a day for about two weeks produces results similar to those of an in-office session, according to Weston.
Best drugstore alternative: Try over-the-counter strips or gels (under $40), which Weston says are plenty effective for some people.

Laser hair removal

What it does: Eliminates hair on the face or body, often for years, by zapping follicles with lasers or light pulses. The process works best on dark, coarse hair and lighter skin, but is ineffective on light blond, white, or gray hair, says Glogau.
Cost: $330 a session, reports the plastic surgeons’ trade group. Coarse hair on legs takes up to five visits, says Glogau; fine hair on the upper lip, three or four.
How to save: Ask if there are multi-session packages available for a lower per-procedure cost.
Best drugstore alternative: Lower-strength, FDA-cleared home devices will do the job but take more time, says New York City dermatologist Bruce Katz. The maker of the $449 Tria Hair Removal Laser 4X, for example, recommends weekly sessions for at least three months.

Dermal filler injections

What they do: Reduce folds and wrinkles — such as the crease between the bottom of the nose and the top of the mouth — using a gelatinous substance injected under the skin. The popular Juvéderm and Restylane brands last six to nine months, says Pittsburgh plastic surgeon Leo McCafferty
: From $430 to over $1,600 per treatment, depending on the filler. Cheek implant surgery, by comparison, runs $2,720
How to save
: Watch doctors’ websites for seasonal promotions; McCafferty, for one, runs specials ranging from $50 to $200 off. Ask the physician which product he or she recommends for your specific need — and see if there’s a longer-lasting one that will require less frequent sessions, advises Katz
Best drugstore alternative
: Moisturizers including peptides and antioxidants can somewhat improve the appearance of small wrinkles, while lip plumpers such as Too Faced ($28) can temporarily add volume.

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