Recently, on an episode of my radio show, "Your Money," I spoke with Dr. Orly Avitzur, medical director of Consumer Reports, about how to avoid excessive and unexpected medical costs.
Many people think that if they have health insurance, they don’t have to worry about medical bills, but out-of-pocket costs can really add up, whether it be a co-pay or a portion of a medical bill that is not covered by insurance.
Consumers should review their medical bills closely because extra or incorrect charges are commonplace. In fact, Consumer Reports found that one-third of those privately insured received these types of bills. And 53 percent said the situation was not resolved to their satisfaction.
Calling your doctor’s office to ask if he or she is covered under your insurance is not enough. "A doctor might participate with your insurance for some things (products), but not others," Orly said. "They would then become an out-of-network provider. You need to call your insurance company to make sure that the doctor is IN network."
Also, don’t rely on physician websites when checking whether a doctor is in or out of network. "Unfortunately, those websites are frequently out of date," Orly said. "Some websites are better than others. There is no national standard of what it should look like."
In an effort to save time and money, patients should feel free to pepper doctors with questions before starting any treatment, such as "Is this procedure or test really necessary?" "What are the alternatives?" "Can we wait and see?" "Are there other ways to treat this?"
"To really collaborate with your physician, you should state your preference and express your feelings. Don’t be intimidated," Orly said.
One out of three consumers has received a "surprise medical bill" from a doctor -- and it happens more frequently than you think, Orly said. "Unfortunately, the health care system isn’t that transparent as to who is or is not in your network. You have to be diligent."
The most common surprise medical bill that patients receive is from the emergency room. You may visit a hospital that you are told is in network, but the radiologist doesn’t participate with your insurance. "This happens to a lot of people under the worst circumstances," Orly said.
Some states, such as New York and California, have protections in place against unexpected medical bills. But others states have yet to follow suit. "We hear horror stories about huge medical bills after routine medical procedures where the costs were never disclosed to the (patient)," Orly said.
Some of this is a result of cumbersome diagnostic codes and confusing paperwork. Some doctors simply don’t know ahead of time whether a specific kind of blood test is covered under a certain diagnostic code. Often, this leads to rejection by the insurance company and a surprise bill for the patient.
"There are so many more regulations to meet these days," Orly said. "It’s often frustrating for doctors. We spend half of our time on administrative work when we want to care for our patients."
"It’s a problem that leaves people frustrated with the medical system," Orly said. "If you have questions (on a bill), call the insurance company or your provider to find out what went wrong. Know what your deductible and your co-pay is. Many people don’t know this. If you have co-insurance, know what portion you are responsible for."
Orly says that if you call the physician, ask for the billing department and make sure to get a clear understanding of why you received the charge. Also, double check with the insurance company and see if the billing department’s answers line up.
Kent Smetters is the Boettner Professor of Business Economics and Public Policy and faculty director of the Penn Wharton Public Policy Initiative at the Wharton School of the University of Pennsylvania.