The Traps

How it works:

You do everything right. You pick an in-network hospital. You verify your surgeon is in-network. You confirm with insurance.

Then you get a bill from the anesthesiologist. Out of network. $8,000.

Or the assistant surgeon. Or the pathologist who read your biopsy. Or the radiologist who interpreted your scan. You never met them. You never chose them. You had no idea they weren't covered.

Why it happens:

Hospitals contract with physician groups for certain services — anesthesia, radiology, pathology. Those groups may not be in your insurance network, even though the hospital is. You don't get to choose. You often don't even know they were involved until the bill arrives.

If it happens:

The No Surprises Act protects you for emergency care and certain non-emergency situations. You should only owe in-network cost-sharing. If you get a balance bill, dispute it.

How it works:

You see the same doctor, in the same office, for the same visit. But the bill is suddenly double.

What changed? The hospital bought the practice. Now there's a "facility fee" on top of the physician fee. You're paying rent on a building you were already visiting.

Why it happens:

When hospitals acquire physician practices, they can bill a facility fee for outpatient services — something independent practices can't do. The visit costs them the same. It costs you twice as much.

If it happens:

You can negotiate facility fees. They're often the most negotiable part of a bill because they're the most transparently inflated.

How it works:

You go to the emergency room. You're kept overnight — or for several nights. You assume you've been admitted to the hospital.

But you weren't admitted. You were on "observation status." It looks identical from your bed. The difference shows up on your bill.

Why it matters:

• • Observation is billed as outpatient. Admission is inpatient.
• • Your insurance may cover them differently
• • Medicare observation patients pay more out of pocket than admitted patients
• • Observation doesn't count toward the 3-day stay required for Medicare to cover skilled nursing care afterward

If it happens:

You can appeal observation status retroactively — but it's hard. The hospital made a financial decision disguised as a clinical one.

How it works:

Your doctor orders a treatment. Insurance says it requires prior authorization. You wait for approval. It comes.

Then you get the treatment. Then insurance denies the claim anyway — even though they gave prior authorization.

Why it happens:

Prior authorization approval isn't a guarantee of payment. The fine print says they can still deny if they later decide the claim doesn't meet criteria, or if the provider billed it wrong, or for a dozen other reasons.

If it happens:

Appeal. Point out that you relied on their approval in good faith. Cite the authorization number. They approved it — they should pay it.

How it works:

You get a bill from a doctor you've never heard of.

It's real. It might be the radiologist who read your scan (you never met them). The pathologist who looked at your tissue. The consulting specialist who reviewed your chart. The hospitalist who checked on you at 3am.

These providers bill separately from the hospital. You don't choose them. You don't meet them. But you owe them.

If it happens:

Verify the services were actually rendered. Check if they're covered by your insurance. If they're out-of-network, No Surprises Act protections may apply.

How it works:

The hospital bills $10,000. Insurance "allows" $4,000 and pays $3,200. You pay your $800 co-insurance.

Then the hospital bills you for the remaining $6,000 — the difference between what they billed and what insurance allowed.

This is balance billing. For many situations, it's now illegal. They still try.

Why it happens:

Providers want to collect the maximum amount. Some don't know the rules. Some hope you don't either.

If it happens:

Cite the No Surprises Act if applicable. File a complaint with your state insurance commissioner. Contact the hospital's billing department and tell them the bill is illegal.

How it works:

You're negotiating a bill or disputing charges. The provider (or their billing company) threatens to send you to collections if you don't pay immediately.

So you panic and pay.

The reality:

Providers use collections threats as a negotiation tactic. Actually sending you to collections is expensive and means they'll get far less (collections agencies buy debt for pennies on the dollar). Most would rather settle with you.

If it goes to collections:

You still have options. Validate the debt. Negotiate a settlement for less than the full amount. Collections agencies will often take 30-50 cents on the dollar.

How it works:

You have two insurance plans — maybe your own and your spouse's, or insurance plus Medicare.

Both insurers point at each other. "The other one is primary." "We need the other EOB first." "We're waiting on coordination of benefits."

Meanwhile, months pass. The bill sits. Then it goes to collections because nobody paid.

Why it happens:

Insurance companies have no incentive to pay quickly. Coordination of benefits is complex. It's easy for claims to stall indefinitely.

If it stalls:

Call both insurers and conference them together if possible. Document everything. File complaints with your state insurance commissioner if they're not processing claims timely.

How it works:

The provider doesn't submit your claim promptly. Insurance denies it because it's past the timely filing deadline.

Then the provider bills you for the full amount.

Why it's a trap:

This is the provider's failure, not yours. They missed the deadline. But they'll try to make you pay for their mistake.

If it happens:

Tell them clearly: "This claim was denied due to your failure to file timely. I am not responsible for your administrative error. Please adjust this bill to zero."

How it works:

You receive care. Insurance pays part of it. But one line item is denied as "not covered" — and you owe the full amount.

It might be a specific drug, a certain type of imaging, or a service they deem not medically necessary. You didn't know it wasn't covered until after you received it.

Why it happens:

Insurance plans have exclusions and limitations buried in fine print. Providers don't always verify coverage for every service before delivering it.

If it happens:

Appeal on the basis of medical necessity. If the provider didn't inform you it might not be covered, negotiate the bill down. You can't make informed decisions about care you didn't know was at risk.

How it works:

When you set up a payment plan, they ask for automatic payments from your bank account or credit card.

Seems convenient. Then they increase the payment amount. Or withdraw more than agreed. Or continue charging after the balance is paid. Or make it impossible to cancel.

If it happens:

Dispute unauthorized charges with your bank or credit card company. Cancel the auto-pay and switch to manual payments.

How it works:

You apply for financial assistance. You're approved. Great.

Then you get a bill anyway — because the approval expired, or it only covered certain dates of service, or you needed to reapply for each visit.

Why it happens:

Financial assistance approvals often have time limits or scope limits that aren't clearly communicated.

If it happens:

Reapply. Explain you didn't understand the limitations. Many programs will backdate assistance if you catch it quickly.

How it works:

You're uninsured, so you pay out of pocket. You pay the amount on the bill.

Later you learn the hospital has a self-pay discount policy — 40%, 60%, sometimes more off — but nobody told you about it. You paid full chargemaster prices when you could have paid half.

Why it happens:

Providers aren't required to advertise discounts. They're required to have charity care policies (if non-profit), but not to proactively apply them.

If it happens:

Go back. Ask for the discount to be applied retroactively. Ask for a refund of the difference. Many will comply — especially non-profit hospitals who are required to have these programs.

How it works:

A bill you didn't know about — maybe from a provider you never heard of — goes to collections without your knowledge. Your credit score tanks. You find out when you're denied a loan or apartment.

Why it happens:

Medical bills fall through cracks. Providers have wrong addresses. Bills get lost. Collections agencies don't always verify contact information.

If it happens:

New rules help: medical debt under $500 can't appear on credit reports; paid medical debt must be removed. Dispute inaccurate information. Negotiate pay-for-delete agreements where the collections agency removes the entry when you pay.