How to Avoid and Fight Out-of-Network Medical Bills

Knowing how to avoid out-of-network medical bills will save you from having to pay an expensive out-of-pocket maximum. However, it can be hard to know with certainty which provider is or is not in-network, especially when you get bounced around to different labs or diagnostic centers by a referring physician.

The only way to be certain is to call your insurance company to check if the provider you are visiting is covered under your health insurance. If your insurance company has you limited to just a few in-network doctors, you may want to switch to one of the best health insurance companies. You can use our free quote comparison tool to see which of the companies offers you the best rate on health insurance.

How Much Medical Providers Can Charge You

How much can medical providers charge you? Long story short, an out-of-network provider can bill you for just about any amount they’d like, and your insurance provider is only on the hook for the amount specified under your health plan. The remainder of the bill is your responsibility. This is known as “balance billing.”

So if you went to an orthopedic surgeon who referred you to an out-of-network diagnostic center for an MRI, you’d need to refer to your non-participating coverage for potential costs. This doesn’t mean providers are trying to rip you off. It just means you won’t benefit from the discounts insurance companies have negotiated with them ahead of time.

Under one particular health insurance plan, MRIs from participating providers require 10% coinsurance, so if the cost of the MRI were $1,000, you would still need to pay $100 after the deductible was met (if applicable). That’s a pretty fair deal, right?

Learn more: What is an insurance deductible? 

But if you got the MRI with a non-participating provider, that coinsurance jumps up to 50%, or $500 after the deductible is met.

But wait, there’s more! This particular health care plan also has a maximum daily allowable amount of $300 for non-emergency services from a non-participating radiology center.

In other words, even though they technically offer to pay 50% of your bill, their maximum daily limit is $300, or in the case of a $1,000 MRI, only 30% of the cost.  Put another way, you’re responsible for 70% of the cost, which could put you in quite the bind, especially with costly tests and procedures.

In most of these situations, doctors send patients out-of-network without letting them know beforehand, despite the fact that they have to contact the insurance company to get the green light. Unfortunately, it’s often a choice between out of network providers and no nearby provider or long wait lists. This is especially true in rural areas or other areas with a limited provider network.

What if there were multiple MRIs and other diagnostic work? What if the total bill amounted to thousands of dollars? It’s not at all farfetched, and my assumption is that this sort of thing happens on a daily basis across this country.

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Resolving Out-of-Network Medical Bills

First and foremost, you need to be aware of what’s going on with your care. Don’t be afraid to ask questions, even if they seem redundant. It could be the difference between an in-network benefit and paying much higher rates. If there’s not an alternate provider within a reasonable distance, your insurance may also be required to cover out-of-network providers with an in-network rate. You can discuss this with your healthcare facility billing professionals.

If there is any doubt whatsoever, and you have time to determine your eligibility with certainty, don’t proceed until you’re entirely sure. Of course, this would not apply in emergency situations. There are also some protections around emergency care.

For example, if your doctor wants you to go get lab work done, or get x-rays or an MRI, be 100% sure that a participating provider is conducting the services. If not, ask for alternatives. You might be surprised how far this information can go even if there are no reasonable alternatives.

Financial Assistance from Hospitals

While many patients do not use them, hospitals are required to offer certain types of financial assistance to patients in need. Sometimes, this involves writing a letter to your hospital. Of course, if they partner with independent surgeons and other medical providers, this may not cover all costs.

Hospital financial assistance programs offer tiered assistance based on your income. For some low-income patients, applying for financial assistance may even cancel out your out-of-pocket altogether. Generally, once you submit an application for assistance and get approved, it would be good for 6-12 months.

What if you don’t qualify for financial assistance?

Whether you just want to avoid a high balance in the first place or you make too much to qualify for assistance, you can do more to protect yourself. Typically, the insurance company will cut a check early on and tell you they’ve done their part, that the rest of the bill is your responsibility.

Going back to our little scenario, the insurance company provided $300. You still owe $1,000 to the diagnostic center, or $700 net. The key to reversing these out-of-network charges is to document what went wrong along the way.

Why were you sent to an out-of-network provider to begin with? Did anyone check your benefits beforehand? If so, why didn’t they notify you first? Why did the insurance company OK it?

If you were originally with a participating provider and then sent out-of-network, you have a much stronger argument, as far as common logic is concerned. After all, they should know if the providers they work with take a certain type of insurance. And this should be discussed or at least detected while making the appointments.

From there, you’ll have to state your case, present documentation, and let them know why you shouldn’t have to pay out-of-network charges.

If you’ve got a strong argument and provide plenty of pertinent information you should have a greater chance of reaching a positive resolution. Unfortunately, dealing with health insurance companies and healthcare providers is a very bureaucratic and slow process.

Learn more: How to Negotiate With Insurance Companies 

You’ll likely need to complain and argue as you make your way up to higher and higher, more important contacts within the billing or health provider’s department.

Don’t give up, though. It’s hard to fight for a reason (lots of money is at stake), but if you keep at it, they’ll more than likely settle. You’ll probably be offered the cash price first, which should be about 50% or more than the insurance price.

But don’t stop there – keep arguing for the price you would normally pay if the provider were in-network. It might help to mention that you’ll file a complaint. This usually gets noticed by higher-ups and leads to a quicker resolution.

Yes, it will be frustrating and time-consuming, but if we’re talking about thousands of dollars, it should be worth your time.  Once you do settle on an amount, make sure it serves as payment in full and get it in writing!

Lastly, I’ll mention that there will be cases when individuals want to see a certain physician or specialist, or go to a certain medical center, even if it’s not covered. While that may be your prerogative, be sure you understand the potential costs beforehand.

How to Protect Yourself Against Balance Billing

You can use the following steps to protect against balance billing:

• Ask if your doctor is a preferred provider and in-network
• Ask if associated providers/services are preferred and in-network
• Search for providers from your healthcare provider’s website
• If out-of-network, ask for all costs upfront
• Get everything in writing every time
• Know your health plan’s benefits before you seek care
• Know your state laws regarding health insurance billing and limits
• Make sure negotiated bills serve as payment in full

If all else fails, you can file a complaint with the Department of Insurance and/or your health provider, which may motivate resolution. Learn more: State Department of Insurance Contact Info 

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The Final Word on Avoiding Out-of-Network Medical Bills

Before we end our article on how to avoid out-of-network medical bills, we want to remind you to always double-check that a provider is in-network before seeing them. If they aren’t, you will be faced with out-of-network medical bills that are time-consuming to fight.

If you are having trouble finding a good health insurance provider that has plenty of in-network providers, use our free quote comparison tool. It will help you a more comprehensive look at your health insurance options and rates.

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