Understanding the Battlefield

The Provider (Hospital, Doctor, Clinic)

• • Wants to maximize revenue
• • Sets fictional "chargemaster" prices as a starting point
• • Negotiates different rates with every insurance company
• • Has a completely different cash price they rarely advertise
• • Will pursue collections aggressively — or write off the bill entirely, depending on how you handle it

The Insurance Company

• • Wants to pay as little as possible
• • Has negotiated rates with "in-network" providers
• • Will deny claims whenever there's a plausible reason
• • Makes money by collecting premiums and not paying claims
• • Has an entire department dedicated to saying no

The Billing Company

• • Often a third party, separate from the provider
• • Gets paid to maximize collections
• • May have no medical knowledge whatsoever
• • Sends bills that look official but are often negotiable
• • Will escalate to collections agencies

Collections Agencies

• • Buys debt for pennies on the dollar
• • Will accept far less than the original bill
• • Can damage your credit — but medical debt rules have changed
• • Often has no documentation of the original charges

You

• • The only party trying to pay a fair price for care you received
• • Given the least information
• • Expected to navigate a system designed to confuse
• • Often fighting while sick, exhausted, or grieving

1. The service is coded.

Every diagnosis, procedure, and supply gets a code. ICD-10 codes for diagnoses. CPT codes for procedures. HCPCS codes for supplies and equipment.

Coding is where the games begin. "Upcoding" means using a code that pays more than what was actually done. "Unbundling" means billing separately for things that should be billed together. These aren't always intentional fraud — sometimes they're just sloppy. But they always favor the provider.

2. The claim goes to insurance.

If you have insurance, the provider submits a claim. The insurance company reviews it against their negotiated rates and coverage rules. They decide what they'll pay, what you owe, and what they'll deny.

3. You get an Explanation of Benefits (EOB).

This is NOT a bill. It's the insurance company's accounting of what happened. It shows:

• • What was billed (chargemaster fiction)
• • What the insurance "allowed" (negotiated rate)
• • What insurance paid
• • What you supposedly owe

4. Then you get a bill from the provider.

This is where most people just pay. Don't.

The bill reflects what the provider thinks you owe after insurance. It may include:

• • Your deductible (what you pay before insurance kicks in)
• • Co-insurance (your percentage of allowed charges)
• • Non-covered services (what insurance refused)
• • Balance billing (the difference between billed and allowed — often illegal)

5. If you don't pay, it escalates.

First, more bills. Then phone calls. Then threats of collections. Then actual collections. Then potential credit damage.

Each stage is negotiable. Most people don't know that.

There is no real market.

In a normal market, you shop based on price and quality. In healthcare:

• • Prices are hidden until after service
• • You often can't choose where to go (emergencies, insurance networks)
• • You don't know what you need until a doctor tells you
• • Quality information is almost nonexistent

Consolidation eliminates competition.

When one hospital system buys all the others, they can charge whatever they want. There's nowhere else to go.

Insurance insulates you from prices.

When you're not paying directly, you don't shop. Providers can charge more because you're not the one writing the check.

Complexity is profitable.

If you can't understand the bill, you can't fight it. If you can't compare prices, you can't shop. Confusion benefits everyone except you.

You don't always get to choose.

• • The hospital is in-network, but the anesthesiologist isn't.
• • The surgeon is in-network, but the assistant surgeon they brought in isn't.
• • You're unconscious and can't verify who's treating you.

Emergency care.

You can't shop during a heart attack. You go where the ambulance takes you. Under the No Surprises Act, emergency care should be treated as in-network, but implementation is messy.

"Out-of-network" doesn't mean "not covered."

It means your insurance pays less (or nothing), and you may be responsible for the difference. This is called "balance billing" and it's often illegal now — but providers still try.

Upcoding

Billing for a more expensive service than what was provided. A 15-minute office visit becomes a "comprehensive consultation." A simple laceration repair becomes "complex."

Unbundling

Billing separately for services that should be bundled. A surgery that should be one code becomes five separate codes, each with its own charge.

Duplicate Billing

Charging twice for the same service. More common than you'd think, especially with complex hospitalizations.

Surprise Providers

Having out-of-network doctors appear during your in-network procedure. Technically illegal for emergencies now, but still happens.

Facility Fees

When a hospital buys a doctor's office, suddenly the same visit includes a "facility fee" that didn't exist before. You're paying rent on their building.

Balance Billing

Billing you for the difference between their chargemaster price and what insurance paid. Often illegal. Still attempted constantly.

Prior Authorization

Requiring approval before care. Delays treatment. Creates paperwork. If you don't get it, they deny the claim. If you do get it, they can still deny the claim.

Step Therapy

Requiring you to fail on cheaper treatments before they'll cover the one your doctor wants. Makes medical sense sometimes. Saves them money always.

Medical Necessity Denials

Claiming the treatment wasn't necessary — even though your doctor ordered it. They're overruling your physician without examining you.

Out-of-Network Denials

Denying coverage because a provider wasn't in-network, even when you had no choice or didn't know.

Timely Filing Denials

Claiming the provider waited too long to submit the claim. Not your problem — but they'll try to make it yours.

Coordination of Benefits

If you have two insurance plans, they'll each try to make the other pay first. Meanwhile, you wait and the bill sits.

Itemized Bills

You have the right to an itemized bill showing every charge. Not a summary — every line item. Request it every time.

Price Transparency

Hospitals are required to post prices online. Most don't comply well, but the information exists. Look for it before procedures.

No Surprises Act

For emergency care and certain out-of-network situations, you're protected from balance billing. You should only pay in-network rates.

Appeal Rights

Every denial can be appealed. First to the insurance company (internal appeal), then to an independent reviewer (external appeal). Most people don't appeal. Most appeals succeed.

Financial Assistance

Non-profit hospitals are required to have charity care policies. For-profit hospitals often have them too. But they won't tell you unless you ask.

Financial Counselors

Every hospital and most large practices have staff whose entire job is to find you financial assistance. They're called financial counselors, patient advocates, or financial navigators.

They know every program — charity care, manufacturer assistance, foundation grants, state programs. They'll help you fill out the paperwork. They'll tell you what you qualify for.

Payment Plans

Most providers will set up no-interest payment plans if you ask. They'd rather get paid slowly than send you to collections. I have several running right now.

The key: you set the terms, not them. If they say minimum $500/month and you can only do $100, counter with $100. A payment plan you can actually maintain is better than one that breaks you.

Get the terms in writing. Confirm there's no interest. Confirm they won't send you to collections as long as you're paying.

Medical Debt Protections

Medical debt under $500 can't appear on credit reports. Paid medical debt must be removed. Medical debt is treated differently in credit scoring than other debt.