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More than 30% of Americans have medical debt: What you need to know about negotiating a medical bill

If you've ever dealt with expensive medical bills or put off going to the doctor because you can't afford the cost, you're not alone. Nearly one in three of U.S. adults has medical debt, according to a Healthcare.com survey. In the U.S., it's estimated there is more than $140 billion worth of medical debt nationwide. There is more medical debt in collections than any other type of debt.

When you get your medical bill following an office visit, diagnostic tests or a bigger procedure, you might be surprised by the amount you have to pay, regardless of whether you have health insurance. It might seem intimidating, difficult and time consuming to contest the bill you just received, but doing so could mean saving hundreds or even thousands of dollars.

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The first step in contesting a medical bill is figuring out what you've been charged for. Interpreting a medical bill is akin to learning about how a credit card or checking account works, Allen says.

"We know we have to check our credit card statements, because errors on those can cost us hundreds or thousands of dollars," Allen says. "In health care, the errors can cost us that much more. And if you talk to experts who look at medical bills for a living, they'll tell you that most of them contain some type of error."

Some estimates claim that nearly 80% of medical bills contain some type of error. After you receive your medical bill, you'll want to request an itemized bill.

Your itemized bill will give you a list billing codes for all of the services your doctor provided. These billing codes are known as Current Procedural Terminology or CPT codes. CPT codes are five digit numbers that are used to code for and describe health-care services and procedures. They are used by public and private health insurance providers and providers of health-care services.

If you have insurance, you'll also want to make sure the claim was submitted to your insurance company and that the prices represent what you owe after the insurance company has negotiated with the medical provider. (Note: If a health-care provider is considered 'in-network' for your plan, this means that the provider has negotiated a discounted rate with your insurance company, so you'll typically end up paying less by going to providers in your network.)

In order to figure out what your CPT codes mean, you can look them up online. The American Medical Association maintains the full, copyrighted set of CPT codes. Individuals are allowed up to five free CPT code searches a day through the website. Do a search for 99395, and you'll see it's classified as a preventive medicine visit for an individual between the ages of 18 and 39. 

You'll then want to make sure the services you received align with the CPT code that's listed on the bill. Doctors sometimes 'upcode' patients, according to Allen. 'Upcoding' occurs when a patient is charged for a more complicated service or procedure than they actually received, he says. 

Office or emergency room visits may range in complexity from a level 1 to a level 5, with level 1 being the least complicated and level 5 being the most complex, he says. Typically, the higher the level, the higher the cost. 

"A level 3, 4 or 5 emergency room visit requires an extensive examination of you, and it requires an extensive history to be taken, so [the doctor] knows all your other medical conditions, all the different medications you might be on. It also requires medical decision-making that has some degree of complexity," says Allen. "In other words, it requires intensive amounts of care."

If you feel like you've been 'upcoded' or the codes on your bill don't match up with the services you've received, you should get in touch with billing department and explain to them why the services you received are not reflected in the bill you received.

In order to successfully negotiate your medical bill, you might need evidence that the care your doctor provided doesn't align with the services you're being charged for, says Allen. You can file a request for the medical records of your visit at your doctor's office or hospital. 

There may be an additional charge for your medical records, but sometimes you can negotiate with them, he says. You may also be able to ask your primary care physician directly to share them with you.

After you've gotten your medical records, you can then use them to bolster your case, says Allen. For example, you can point to the notes in your medical records to show that you were charged for a medical visit that required medical decision-making when your doctor's notes don't show any evidence of that kind of care.

If the billing department is unwilling to budge, you can escalate the issue by filing a claim in small claims court. In small claims court, individuals can sue a person or a company without a lawyer (this may vary by state). According to Allen, in some states like Texas, you can sue for up to $20,000. While you may be charged for filing a case, the fee is likely small ($30 to $40) in comparison to your medical bill.

"And when you file that case, it really flips the power balance," says Allen. "Now [the hospital] has to go in front of a judge...to justify their unfair or inaccurate prices. And they don't want to do that."

Contesting a medical bill can be time consuming and frustrating, but Allen emphasizes that, depending on how expensive the bill is, it could be worth it for you.

When it comes to actually paying off your medical bill, you shouldn't opt to use a credit card unless you're sure you'll be able to pay off your balance in full and on time when it's due. Using a credit card to revolve your balance from month to month could result in you paying a lot more money in interest. 

First, ask about a hospital or doctor's financial assistance policies. Some hospitals offer discounts if you meet certain income requirements. If you don't qualify for a discount, some hospitals may also offer you a payment plan to pay over time which are typically interest-free.

If you must use a credit card to pay for your medical bills consider using a 0% introductory APR credit card, which can give you a 0% interest rate for up to the first 21 months of card membership.

Two well-regarded options are the the Citi Simplicity® Card which has a 12 month 0% introductory period on purchases from the date of account opening (then, 19.24% - 29.99% variable) or the Wells Fargo Reflect® Card which offers an introductory 0% APR on purchases and qualifying balance transfers for 21 months from account opening; 18.24%, 24.74%, or 29.99% variable after. Balance transfers made within 120 days from account opening qualify for the intro rate, BT fee of 5%, min $5. (See rates and fees)

Another option worth exploring are a medical credit cards like the CareCredit® credit card or the Wells Fargo Health Advantage, which tend to act a bit like zero-interest period cards: they usually have a promotional period with no interest before rates are hiked up.

If you want a financing option that allows you to make monthly installment payments, there are also 'buy now pay later' options for health-care expenses. Opy is a BNPL service specifically for health care, education and auto service and repair. Before you sign up, you'll want to check with your physician's office or your hospital to make sure Opy is available to you.

Opy charges borrowers a fixed interest rate of 9.99% (or lower depending on the merchant) and payment plans can last up to 24 months. Notably, Opy has an interest rate that's lower than the rate offered on most credit cards. Unfortunately, you could still end up paying a lot in interest depending on the amount of medical debt you have to pay off.

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Information about the CareCredit card, Wells Fargo Health Advantage has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.