Medical bills can be frustrating for many reasons. It seems anyone who gets near the patient is paid independently. Few medical service providers who bill independently use the same billing cycles, explain their charges very well, or use the same policies. This blizzard of medical bills makes sorting out what was paid, what needs to be paid, and what should not be paid a part-time job for patients who undergo complicated procedures. It also makes negotiating settlements for medical bills difficult. We will give you some tips and advice below, as well as instructions on how to resolve medical debt — however, if you want to explore a service where a firm manages and audits your medical bills for you, then consult with Health CPA.
Let us look at a real-world example to illustrate my point. A hospital admits a patient for heart surgery. The hospital bill may be itemized and collected for these services:
- X-ray technician
- Blood analysis
- General physician
- Other specialists
- Hospital room
Each of these service providers generate a bill, and may invoice the hospital itself or the patient directly. If providers invoice the hospital, then it is with the expectation the hospital’s billing department will collect on the entire combined sum, which it distributes accordingly. As a result, a hospital billing department has little room to negotiate. It can offer patients to break up payments over months, but generally cannot offer discounts or settlements. The patient either pays in full or is sent to collections.
Another source of frustration is that seemingly identical medical procedures cost different amounts. Patients can compare the cost of a hospital room rate depending on the area admitted (ICU, recovery, oncology, cardiac, labor & delivery, and so on) at any hospital. However, every other bill is subject to a provider’s whims. For example, two anesthesiologists performing the same procedure may charge different amounts. Since there is no physical item attached to the cost (a hammer at Home Depot, Lowes, or Ace costs roughly the same, so you know how to budget for a hammer) it is difficult to negotiate a reasonable discount to pay an anesthesiologist.
Negotiating With Healthcare Organizations
Generally speaking, the larger the healthcare provider, the more likely it is to outsource its collections. A provider that outsources its medical collections follows a timeline that is closer to a credit card issuer than a clinic or regional provider. This means that at about 180 to 240 days, it will write-off the debt and sell the account to a collections agent. At this point, the usual rules apply for negotiating a debt. Namely, start negotiating a pay-off at about 20 cents on the dollar, and expect to settle for 40 to 60 cents on the dollar.
However, individual practitioners, clinics, or regional providers do not follow any generalizations about medical debt settlement. Some may continue to collect the debt in-house. Others follow the example set by large providers.
Many hospitals, clinics, medical offices, and healthcare systems offer hardship assistance or financial assistance programs. However, a large or unexpected medical bill is not a hardship in and of itself! Programs vary in their requirements. If you lost your job, had a change in living conditions, live near or below the poverty line, hospitals are more likely to work with you. All will require proof, meaning copies of pay stubs, credit reports, other current bills, and so on. Go to your healthcare provider to learn the requirements your healthcare provider created for its medical hardship assistance program.
Your Question About Kaiser Permanente
Kaiser Permanente is an Oakland, CA-based managed health care company that employs about 180,000 people, and serves 8.7 million patients in nine states, according to the company. Its 2009 revenues were about $42 billion, and it earned about $1.3 billion in profits. It rivals HCA, a chain of hospitals, in revenue but Kaiser offers fewer locations.
Kaiser consists of two organizations that interact with customers. Kaiser Foundation Health Plans (KFHP) offers prepaid health plans and insurance. KFHP is a non-profit. The most popular plans are managed health care plans, which are commonly known as HMOs. Permanente Medical Group is a physician-owned set of hospitals and clinics that gets almost all of its funding from KFHP. Kaiser Permanente is a for-profit entity. Because Kaiser Permanente and KFHP are considered separate, Kaiser Permanente argues that its medical decisions are made by the doctors who own and operate Kaiser Permanente’s hospitals for the benefit of patients, and not the insurance arm KFHP.
If you have a question about your insurance coverage offered by KFHP, call the appropriate telephone number found on the KFHP Contacts for member questions page. If you have a question about Kaiser Permanente’s billing, this is more complicated. There is no central billing contact telephone number or Web page Bills.com could find for Kaiser Permanente. Instead, billing seems to be handled at each of Kaiser Permanente’s nine regions:
- California - Northern
- California - Southern
- Colorado - Denver / Boulder
- Colorado - Southern Colorado
- Maryland / Virginia / Washington D.C.
- Oregon / Washington
Contact Kaiser Permanente’s member services department for your region to talk to a Kaiser Permanente billing person about the items on your bill that confuse you.
Kaiser Permanente Medical Financial Assistance
Kaiser Permanente’s Medical Financial Assistance program offers reduced-cost medical services for people who earn up to four times the national poverty level. The Medical Financial Assistance program is offered by each of Kaiser Permanente’s nine regions separately. The Web page just mentioned contains links to the programs at each of the nine regions.
If your income is low, apply to Kaiser Permanente’s Medical Financial Assistance program.
Resolving Medical Bills
If you do not qualify for Kaiser Permanente’s Medical Financial Assistance program, then you may try to negotiate a settlement for the medical debt on your own.
Here is a quick summary of how to negotiate payment options with a medical provider:
- Be Polite
This will get you further than anything else when negotiating with a creditor. After all, medical billing staff members are humans too. They spend most of their time dealing with angry and difficult customers, so you may find that by being courteous the person will be more likely to give you what you want.
- Be Specific
Ask if you can pay a certain amount each month, and name the exact amount, or negotiate a lump-sum settlement if you have the lump-sum available. They do not have to grant your request, but if you do not ask, the answer is always no.
- Be Flexible
Let the medical provider know that you are willing to accept a reasonable compromise. Billing people need to meet their objectives, too. If you present a “win-win” situation, then the creditor can feel good about the negotiation.
- Be realistic
Some medical debt collectors will refuse to negotiate. Don’t take it personally and try again at a later date.
- Be Persistent
Negotiation takes time and effort. And as with many things in life, hard work and persistence will help improve your chances of success.
- Get It In Writing
Always get the agreement in writing before sending your money, and to have them also send a letter confirming that the account is resolved and at a zero balance once they receive your final payment. This is the proof you will need in cases where a medical office fails to properly report your payment to the credit bureaus or tries to make additional claims on the account in the future. Ask them to send the agreement letter by mail or fax (or in person, if the creditor is local), which most will be happy to do to ensure your payment. Make sure their offer letter is on the office’s letterhead & signed.
- Remember: Cash-Flow is King
Medical providers care about their cash flow and would like to receive their payment quickly. You can negotiate with your medical provider by stating that you would pay immediately if you are offered a certain percentage discount now. This is usually effective. Medical providers know that there is risk in receiving full payment on a patient balance because many people take too long to pay or do not pay at all. They want to work with people who are willing to pay something.
Contact Kaiser Permanente and discuss the bill that confuses you. Try to negotiate a settlement on your own. If you cannot, consider a debt settlement program. Rather than making monthly payments to your creditors, debt settlement programs negotiate lump-sum settlements with your creditors, frequently reducing your debts by 50% to 60% of your principal balances. These programs usually take 2 or 3 years to complete, so this is a good option for many people to rid themselves of debt in a relatively speedy manner. In many cases they can also reduce your monthly payment toward your debt.
There is one major drawback to debt settlement programs — they will damage your credit significantly while you are in the program. However, if you are currently unable to afford to pay your creditors, the hit to your credit may be worth the benefit of ridding yourself of credit card debt. If you enter your contact information in this form, a pre-screened debt settlement firm will contact you to discuss your debt relief options.
I hope this information helps you Find. Learn & Save.