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'Never Pay the First Bill' author and medical bill expert: Top tips to make sure you're not being overcharged

"You should assume when you get a medical bill that it might contain some type of an error."

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"You should assume when you get a medical bill, that it might contain some type of an error. That would be a safe assumption," says Marshall Allen, author of the new book "Never Pay the First Bill: And Other Ways to Fight the Health Care System and Win." In fact, he says, "When I talk to experts who review medical bills, they say that most of them contain some type of error."

Allen, an award-winning ProPublica reporter who has spent 15 years investigating the health-care industry, wrote the book to help consumers learn how to fight for fairly priced medical treatment. "When I say, 'Never pay the first bill,' I'm obviously not saying never pay your bills, but what I'm saying is never pay the first bill until you have checked it to make sure that it's accurate and to make sure that it's fairly priced," he says.

Here are some of his top tips to help you spot medical billing errors and avoid being overcharged for treatment.

1. Make sure your insurance company was billed

In the summer of 2020, Allen and his 17-year-old son were on a road trip when his son had a case of swimmer's ear. They went to an urgent care facility for treatment. A few weeks later, "I got a bill in the mail for $250, and it said, 'Pay now, to the responsible party Marshall Allen,'" he recalls.

After looking at the bill, Allen realized his insurance company had never been billed for the visit. "I thought that was weird at the time because I had very expensive insurance premiums, and a very, very low deductible."

Never pay the first bill until you have checked it.
Marshall Allen
Author, "Never Pay the First Bill"

Receiving a bill with such urgent wording can scare anyone into paying a bill they don't actually owe, Allen says. But before you make a payment, do your due diligence.

Allen called the urgent care facility's billing department and said they needed to submit the bill to his insurance company. Despite the stern wording on the bill, the facility simply said, "OK." After they forwarded the bill to his insurance provider, the cost of the treatment was covered.

2. Review the itemized bill

"To make sure they [medical bills] are fairly priced, the first step is to get an itemized bill," Allen says. "That just means a breakdown of all of the charges that were combined to create that bill."

A complete itemized bill ought to include the billing codes, "a standard set of codes that are used to translate the medical records into the claims that get sent to insurance," he says.

"To understand the codes, just Google the code number with the term 'medical billing code' and read the descriptions," Allen writes in his book.

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Earlier this year, Allen was contacted by a New Jersey woman named Gabby who received a $2,607 medical bill after slicing her finger while cutting an avocado and receiving three stitches at the emergency room.

Under the Affordable Care Act, hospitals were required to post all of their prices online, beginning January 1, 2021. While many hospitals aren't complying, some are. Luckily for Gabby, the insurer's negotiated rate, which is how much insurance companies pay the hospitals for procedures, was posted on the hospital's website. Her insurance company paid the hospital $3,101 and she was billed $2,607, Allen says.

"We looked up the billing code that made up the biggest chunk of the charges, the CPT code 99283, for a level 3 emergency room visit," Allen writes. On the hospital's website, Allen and Gabby were able to see that her insurance company negotiated a rate with the hospital for that billing code that equaled $5,805. "Which explains why her bill was so massive. But the cash price for the same level 3 code was $256.84. In other words, her insurer's negotiated rate was twenty-two times higher than what the patient would have paid in cash," Allen writes.

Gabby was able to obtain the price her hospital negotiated with her insurance company because of the Affordable Care Act's new requirement. "Using that knowledge, she was able to contest the bill," and reach a resolution with her insurance carrier, Allen says.

3. Compare costs for your medical procedure

Another way to see if you're being charged a fair amount is by using the website fairhealthconsumer.org, a nonprofit organization that gathers what insurance companies are paying in communities all over the country, Allen says.

"So let's say it's an emergency room visit and you can see, 'OK, so I was charged for a level 3 emergency room visit at $700 for that visit. Fairhealthconsumer.org tells me that a fair price would be around $400," Allen says.

Once you've investigated what the fair price is, "you can then push back on these prices and contest them," Allen says. "So if you find inaccuracies or overcharges, that's when you should push back and say, 'Look, this bill is inaccurate or this bill is overpriced.'"

Millennials are 'some of the biggest victims'

When it comes to navigating the health-care billing system, "millennials are, first of all, some of the biggest victims here, because like a lot of things, millennials are paying for the sins of their previous generations." Allen says.

Allen, who is 49, says medical costs are "about twice as high now compared to what I was paying when I was a young adult." On top of that, millennials have so many other expenses: "You're trying to build your family, you're trying to build your career, and maybe you're trying to pay off your student debt," he says.

Advocating for fair health-care prices and accurate billing is an important step towards fixing the flaws, Allen says. "These are frankly injustices that have been foisted upon [millennials], and they can stand up for themselves and they have a lot of power to bring about change."

To help more Americans navigate the complex health-care billing system, Allen is currently raising money through an Indiegogo crowdsourcing campaign to turn his book's advice into a video series called "The Never Pay Pathway." He's also creating a smartphone app. The idea is to get that same knowledge "into the pocket of every patient who needs it," he says.

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