Today, Rick Bloom is joined by Caitlin Donovan of the National Patient Advocate Foundation for a very important conversation - about medical bills.
Too often, patients just assume their medical bills are accurate and they have to pay every penny. Caitlin dispels that myth. There's so much nuance with billing codes, insurance coverage and Explanations of Benefits (EOB's), and more. Very often, you are not responsible for what you see on that first bill.
There are a number of strategies you can use, including bringing an advocate with you to appointments, trying multiple people in a billing call center, and most importantly, persistence.
You can also negotiate your bills - a hospital, for example, would rather negotiate a settlement with you than not have you pay anything at all! Rick also mentions the importance of having a medical durable power of attorney should you not be able to make decisions for yourself.
Also, Rick answers two more listener emails - regarding inheriting retirement plans and declaring bankruptcy due to credit card debt.
The National Patient Advocate Foundation is a free resource for many eligible patients. You can find them online here: https://www.npaf.org/
Note: Bloom Asset Management is now Bloom Advisors. Find Rick and the team at https://www.bloomadvisors.com/ or call (248) 932-5200.
Medical Bills
Rick: Hello and welcome. I'm Rick Bloomand welcome to Rick blooms talks money. I'm an attorney certified public accountant financial advisor. The goal of our podcast. Real simple to make sure money stays in your pocket. Cause I believe money looks better in your pocket than it does anywhere else. Independent financial advice that's going to get from this podcast at all times.
And my commitment to you is no geek speak. We're going to talk in simple everyday English. Also for those of you who have questions, topics you want me to cover email me, Rick at Rick Blum talks, money.com and also at the end of every podcast, we're going to take your question. So if you have questions you want me to handle Rick at Rick bloom talks, money.com.
Our guest today is Caitlin Donovan. She's the senior director of public relations with the national patient advocate foundation. An organization dedicated to helping eliminate the apps, the calls with regards to healthcare. And we know there are lots of obstacle. Caitlin is a nationally recognized health care policy expert, specializing the intersection of healthcare and personal finance, Caitlin.
Good afternoon. And thanks so much joining us today. Good afternoon. Thanks for having me, I guess, right off the back. Caitlin, maybe you could tell us what is the national patient advocate foundation.
Caitlin: Well really simply where advocating for patients and teaching patients, how to advocate for themselves.
And we work as the sister organization to the patient advocate foundation, and they provide free case management or services and financial relief for anyone with a diagnosed condition. So they're the ones who are going to take you by the hand and help you get through that denial, get your insurance to properly cover you and make sure they're bringing money back into your pocket.
Rick: Yeah. When you talk about needed an advocate, you do these days because there are so many minefields when it comes to the healthcare system.
Caitlin: It's crazy. And I think we've convinced people that if they just take like five minutes to shop around, they'll magically. Save thousands of dollars and the whole system will be less expensive, but it's not true because it's so complicated that for a lot of people, they just need a professional to help them.
Rick: And that's true. And, and some people, they don't want to admit that they need help, but I'll tell you one thing that I think everyone needs help with. And that's dealing with the bills of the health care. I don't remember ever getting a bill with regard to healthcare that I actually understood the bill.
Totally. I mean, they're written in some gobbly goop language at, I don't know what it is.
Caitlin: I think there are two extremes to the healthcare bills that I've seen. One is what you just described and the other is Rick, have you ever seen my cousin Vinny?
Rick: Oh yeah. I love that movie.
Caitlin: Love that movie. And the part where he goes into that diner and he looks at the menu and it says breakfast, lunch, dinner, and those are the only options.
Right. That to me is what a lot of hospital bills look like. They'll just say like hospital visit $10,000, please pay now. Like, what am I even getting charged for? And that's why I wanted the biggest thing anyone can out there do is to assume if you get a bill in the mail, that there's probably a mistake on it and to not pay it right away until you get that explanation of benefits in the mail, which is that packet that comes, that says, this is not a bill.
And usually people don't even look at it. But that's a really good, important tool for making sure that you're not paying a penny more than you're supposed to.
Rick: Now, Josh too. It's like if you get a bill from the IRS about half the invoices, the IRS sends out half the notices are wrong. I think the same thing with health care, I've read about half the bills that people get are wrong.
Caitlin: Absolutely. And a big number of those are providers sending their bills directly to you without bothering to send them to your insurance. Now, if you've ever looked at that explanation of benefits, I mean, I just, I have three kids we've talked about that and I've looked at these bills and there'll be like, $40,000 for labor and delivery.
But what I actually owe is much less than that still too much but much less. And can you imagine getting that $40,000 bill and thinking that you're supposed to pay it? That's why it's so important that you slow down and wait for your explanation of benefits, because that's going to be proof that they actually submitted to your insurance and that you're only getting that percentage of what you actually
Rick: owe.
And I don't want to give the impression that hospitals, healthcare providers are intentionally issuing wrong bills. It's just the nature of the system, because one thing I can never figure out is some of the codes that they use. Oh, my gosh.
Caitlin: So they just updated the codes and I think it more than doubled how many different coding it is.
And there's a lot of nuance here about why that is. They added, like it was going to double for some reasons, because instead of having just a blanket, hurt arm it's right arm versus left arm, but it does mean that there are now specialists. There's a job description that didn't exist a generation ago.
Of people who do medical billing codes it's really, really complicated. And those people who are doing the coding are steps removed from your actual physician. So they may make a mistake looking at those notes and end up charging you for the wrong thing. That's why it's really important to be diligent when you get these bills in the mail, because you're the only one that was there in the room.
Rick: That's right. And that's why it's important. I believe in any bill, you get, you need to review the bill. And if it's wrong, you need to contact someone. I think people are somewhat intimidated to contact their healthcare providers if there's a mistake.
Caitlin: Oh, absolutely. Cause there's two things going on. One is that we are socially it's, it's still a little bit, feels rude to talk about money. And the other one is that your doctor, you see them as an authority figure and they must know what's going on. I must be in the wrong. So making sure that you understand that you should call the bill office. You should ask questions.
It's their job to answer them and partially to me, because frankly, there's a direct connection between your financial health and your physical
Rick: health. No question about it and you have to be proactive when it comes to the medical area. And what about, I know that I, I used to help my parents when they were around, go through the bills, make sure they were accurate.
And they had meaning that families have to do for each other, especially with some of the elderly today. That's that you have to sit down and go through the bills
Caitlin: with them. Oh, absolutely. And I mean, one of the, on the flip side too, is making sure if you know someone and that's harder to do nowadays, but there's ways to do it.
If you know someone who's elderly and it's within your power, if they want you to come with them to the doctor's office, to make sure that they're. Getting across everything they need to, to their doctor. That's a really nice thing you can do for them. And one of the things we also encourage people to do is talk to their doctor about any financial concerns you have.
We talked to way too many people who don't tell their doctor that they can't afford to the pills they're being prescribed. So they don't tell their doctor. And then they either don't fill their prescription or they fill it and they don't take it the way they're supposed to. They cut their pills in half.
They only take them every other day. And then there's still sick. Whereas if you talk to your doctor, you can, they can maybe prescribe you a generic medication. They can hook you up with some free samples. They may be able to just change your treatment around, around. So you have the same exact efficacy, but just a lower cost.
Rick: Caitlin, what do you do if you find an error on the bill? And whether it's a hospital, they don't want to correct it. What's the next step. Someone should do
Caitlin: call again, hang up and call again. Get somebody else. Sincerely. I mean, I will tell you that it fluctuates from year to year. But our professionals who are the best at what they do, I think last year it took them on average 17 calls to finish a case for a person and anyone who's been on the phone with their insurer, even just once will tell you, like, they'll grow when they hear that statistic and they should, but you have to be persistent to get what you need to go over.
When I had my youngest, I had a bill and it was this comedy of errors because here are my, I'm supposed to know what I'm doing. I get this bill in the mail. I didn't get my EOB. First. I call my insurer. They told me that it was correct and I needed to pay it because I hadn't met my deductible. So I pay it.
And what happens the next day I get the bill they were actually talking about and it took me eight months to get that $250 back from that provider. I had them on three-way conversations, two or four, four times. I had, I think 22 different phone calls with them. And finally, and they kept insisting that they couldn't submit the bill.
It was a horrible thing to go through and it ended with me saying I really might need to get my attorney involved. My pretend attorney he's very intimidating. And all of a sudden I had a check in the mail for $250.
Rick: It pays to be proactive. Now you see it's something that your organization that someone can call your organization and get assistance on.
Fighting a hospital over a bill or something of that nature.
Caitlin: Yes, as long as they qualify for our assistance, meaning that they have a diagnosed condition that falls within our purview. So cancer, lupus, AIDS, diabetes there. I mean, there was over 600 diagnoses. So if you have something there's a good chance that you qualify,
Rick: and there's also professionals today that advocate for you when it comes to reviewing bills, you could hire someone, a professional medical billing advocate to help fight in the same way.
Caitlin: Absolutely. And that's gonna differ from person to person. Some of them might charge you for the percentage of what they saved you. Others might do it for free. Some have hourly rates. It just depends on who you have access to, but there's, it's a difficult job. And if you can do it yourself, that's great.
But if you need help, don't be shy about looking for, because it's worth it.
Rick: What about Kaitlin negotiating bills? I always say no problem with trying to negotiate, but do people have success, whether it's with some sort of medical service that they can't afford it to negotiate the bill?
Caitlin: Absolutely. You should absolutely do it.
And once you've gone through, if you're going through an appeals process or whatever it is, to make sure that your insurance can't pay more of your bill, Taking a look at your finances, figuring out what you can afford to pay towards it. Now, what you can afford as a monthly rate, and then figuring out using something like healthcare, blue book.com, or even now the new transparency lists that hospitals have to post online to find out what a reasonable rate is.
And calling your billing office and making an offer, or you say, I have an outstanding bill say for $10,000, but I looked at your list. I think a reasonable price is 5,000. I can give you 1000 now and pay, $400 a month until it's paid off. That's totally something reasonable. And they will jump at it sometimes because.
There's a good chance that someone with a $10,000 bill is going to just pay zero and then they're out. And another thing to do before doing any of that is calling them and asking if you qualify for financial assistance, because they may have a program that wipes the entire thing out for you. And, but they might not tell you about it unless you ask
Rick: again, you have to be proactive.
And especially when it comes to mitigating the costs of healthcare, how do people find the resources to help them dealing with these bills?
Caitlin: Well, you can always go to patient advocate.org. We have a lot of resources on there for you. There's a couple of really good ones. One are tutorials on how to do all this stuff.
We have a guide to the appeals process. We have a guided negotiations. We just even have simple vocabulary. Like if you're listening to me and saying, she just said, co-pay, she just said deductible, I don't know which one is, which. We're there for you. It is confusing. It's not your fault. And we also offer a free directory is the only one like it out there that you just put in.
I'm in Michigan, I'm 35 years old. I have breast cancer. I need help with this, this and this. And it will populate all the local and national resources that are available to you. If you need financial assistance, rental assistance, whatever it is. If we know about it, our professionals are using it. You have access to it too.
Rick: And again, people should never be embarrassed if they need financial assistance there for a reason people should take advantage of it if they can.
Caitlin: Absolutely. Absolutely.
Rick: Katelyn, what about dealing with insurance companies? I mean, the general rule of an insurance company, if you ask them anything, the answer's no.
Is this procedure qualified? No. And you have to be proactive. A few years ago, I was in the hospital and there was something I wanted the insurance company said no, and I just eventually bugged them enough to talk to the person that could say yes, but how does he average for us to deal with insurance companies, especially in today's world, where they may deny a procedure or something of that nature?
One
Caitlin: of the biggest hints I can give you is to ask them directly the question you need the answer to. I talked to people who say, I don't understand why this was denied. Can you pay it? And they'll just say no, but saying, how does this need to be resubmitted so that you will cover it? I know it's supposed to be covered and I've had insurance.
I, Oh, you just need to change the billing code to be one, two, three. So then you can call your provider and say, you need to resubmit with B one, two, three, and boom. It's cover. Of course going either. Remember that your insurer is like almost like a legal and technical organization. So approaching them in the same way, looking at the actual language that they use, maybe in your coverage documents to say, this says this, therefore you need to cover it.
Always. Documenting every interaction you have with them, asking them to send you up notes, asking them to send you a list of in network providers, just to make sure that you're covered. If they turn around and try to deny you right. And like I said, we actually provide a lot of help on how to interact with your insurer.
We have template letters you can use if you're going through the appeals process, just to make that easier for you. Because the hardest thing about all of this, it is one thing to deal with your insurer when you are healthy. And you're got a pile of work to do. It is another, if you are sick, And you don't have any energy and you don't feel well to have to go through all this.
So trying to take as much of that burden off you as possible, but keeping in mind that it is worth it in.
Rick: I agree with that because even if you're healthy, somewhat, I think people are intimidated to dealing with their insurance companies and they feel so helpless. And you just got to get over that feeling and realizing that you have rights.
And I think that's what people don't realize. I think that the insurance company is all powerful and there's nothing they can do. And
Caitlin: sometimes the best thing you can do if you're not getting the answer that you're you want is to say, thank you. Hang up, wait a couple of minutes and call back and get a new person because ultimately what you're doing sometimes if you're not going through a formal appeal is just looking for the right person.
Who's going to say yes to you. And unfortunately, sometimes it's a lucky system, but you know, play the system then
Rick: no, you have to. And that's the Wiki it's written that you have to play the game. These are the rules that were set up. We didn't set the rules up. We now have to just play their game and you should never be intimidated by an insurance company.
Remember you're paying the premium. So they technically work for you. And just because they say no doesn't mean, that's the final answer. You gotta be proactive. And, you mentioned something earlier, Caitlyn, that, a lot of times the patient doesn't have the energy. They're more worried about their health and you know what?
I've always stressed to people. The importance of having someone that can make a medical decision for you, doing medical, durable powers of attorney to give someone that power.
Caitlin: Oh, my gosh, absolutely. And one of the biggest things we're emphasizing to people, especially with COVID and everything going on is this whole idea of like, be a hero, make a plan, you get your papers in place.
Make sure you have something in writing saying, I want someone that'd be have a power of attorney. If I'm incapacitated. Here's. Funding for this. Like here's where ever my, all my documents are, is so important. Especially if you have a spouse or a loved one, that system makes sure that they're taken care of and they can get you the care that you want, if you are incapacitated.
Rick: And the thing for people to realize is. Medical durable powers of attorney. Most people can get them for free these days. You don't have to pay an attorney to do it. Michigan. We have something called the Michigan patient advocate form. There's lots of free forms that you can do to give someone the right to step in your shoes and make decisions and help you through the process because.
You never know when emergencies are going to happen. I mean, COVID should have taught everyone that you have to be prepared. And I just can't stress enough important for everyone to have a medical, durable power of attorney. And I always tell people, Kaitlin, the day you become an adult, you need a medical, durable power of attorney.
I don't care if you're 18 or 80 is still need one.
Caitlin: Absolutely. And you're also helping doctors too. They love seeing something like that. So they have a clear directive on what they're supposed to be doing.
Rick: I agree with that. And I think it just makes handling the system easier. Unfortunately, Caitlin, we've had a lot of people because of the COVID that have, lost their job and lost their health care.
They're scrambling any advice from that and what people should be doing.
Caitlin: Yes. So I've had people say to me, well, I think I'm, I have a good lead on a job. I'm just gonna wait before signing up to get insurance. I'll get it through this job. I might get. You have to look at your situation right now and plan for the now too.
So if you don't have health insurance, the marketplace is open. If you don't have a job right now, you might qualify for zero to very little premiums. It is so important to have health insurance. There's a reason it's an insurance policy is because if you don't have it and you wind up in an accident, if you're on a ventilator in a hospital, Yes a premium.
It might be more than you want to pay right now, even $5 a month, but that's way better than $200,000 hospital bill you might get hit with
Rick: otherwise. And if you want one thing that's going to destroy your financial future is to get hit with some of these bills. It just throws all financial plans out of whack.
Caitlin: Absolutely. And even if you sign up for health insurance now and you're covered, and then you get that great job. You can cancel that insurance you're done. You don't have to use it anymore, but risking it and going without it is asking for trouble.
Rick: And remember, like, the marketplace has enrollment periods, but that doesn't apply for you.
You lose your jobs because there are special enrollment times under the, the marketplace rules.
Caitlin: Absolutely. And it's a lot easier than you think to pick a plan. They walk you through which one you can figure out what you need as far as in network coverage or your favorite doctor. We even offer plan guides on our site on how to choose that plan and walk you through it with us.
So don't put it off another day, just sign up, get covered. Cause
Rick: a lot of people, what they also do, Caitlin is they'll just automatically take Cobra. They don't realize how expensive Cobra can be. Particularly when you don't factor in the subsidy that employers are making
Caitlin: Cobra is way too expensive for most people.
You can be paying over a thousand dollars a month for Cobra. When you can get an insurance on the marketplace, you might not be paying anything a month. You might be paying $200 a month for the most expensive pen, depending on what your income is. It's not worth it. If you are not certain of your income source to use a Cobra.
Rick: The only time I generally recommend Cobra is, someone's, short-term needs it for a month or something like that, but you do it for the full 18 months. That gets very, very expensive.
Caitlin: Yeah. If you're transferring between jobs and you just have a month, you have to get through and your favorite doctors are on that plan.
Sure. Use Cobra for a month. Figure health is important. Your comfort's important. Do what you need to do, but for 18 months, that's just. A lot of money, it
Rick: sure is. Particularly when someone is having financial difficulty, that's what even makes it worse. That's the problem. So Katelyn, our last few minutes, can you give people some general advice about dealing with a healthcare and.
The one thing I was going to mention before I get to that, when you advocate for someone in someone is your caregiver, they're, you're a caregiver for your parents or something of that nature. It is important to realize that takes a toll on you. And you have to make sure you take care of yourself as well.
Caitlin: I am so glad you said that, caregivers count and so much of what we do for our loved ones, we pushed down and put ourselves. Last on the care list, but making sure that you're getting the support you need both emotionally and financially is incredibly important. And I think the first step is to one, realize that you might be a caregiver and being a caregiver might mean that you're 18.
And you're checking in on your great aunt on a daily basis. It might mean that you are in your sixties and you have a spouse who just had a stroke. But you count as a person, you might have a lot of resources available to you financially. There might be benefits that you can acquire. So that's another thing you can go to our website and check out because it's really important that you take care of yourself and you get the support you need.
Rick: Caregiver stress is a major, major problem that people should do something about it because I tell you, I know from dealing with my parents, it is an, an emotional drain that, and if you don't take care of yourself, you're not going to be able to take care of your loved one.
Caitlin: Yes. And trying to get a little loan, someone else to help you too.
I have a brother and a sister, and we all have our side chats on. Who's going to check in on our parents on a daily basis because sometimes it's too much for one
Rick: person. I'll tell you this, for those of you who are caregivers to your parents It really is an honor. I always said I was lucky to have the opportunity to help my parents in their final journey.
And it is a great opportunity, but you do have to take care of yourself and that's important. So caregivers for loved ones. Don't forget. You have take care of yourself before you can take care of your loved ones.
Caitlin: And we have, like I said, in that resource directory I was talking about you can look up resources for caregivers, emotional support, financial support, whatever it is you need.
There's probably a listing in there for you. So
Rick: Caitlin, can you give us the, a website for the ne the national patient advocate foundation?
Caitlin: There's two different websites. You should be aware of. One is patient advocate.org, and the other one is N P a f.org. That's national patient advocate foundation. So between those two sites, we have all of the resources I've talked about, including financial assistance guys, to insurance appeals, how to pick a plan and even how to get involved.
If what we've been talking about makes sense to you and you want to help other people get the care they need. He can sign up to
Rick: volunteer. And that's a great, and Lynn should lead me to one other question about the foundation. You don't charge people that call you for advice, right? That's right. So how do you guys get, make your money?
Caitlin: We aren't charity. We get donations through grants like through the Robert Wood Johnson foundation, individual donors. We have some industry donors, other non-profits we collaborate with and we do some of their social services through them. So we are growing and robust. Hopefully as long as I'm employed
Rick: well, and I would tell everyone to take advantage of their resources, the more knowledge you have about the situation, the better and easier it is going to be.
So you have to be proactive in dealing with this Caitlyn. I can't tell you how much I appreciate you joining. Oh, I
Caitlin: had a blessed, thank you so
Rick: much. Have a good one. Caitlin, thank you. Caitlin Donovan from the national patient advocate foundation. I can't tell you how so it's so important that you get the knowledge to deal with things, whether you're advocating for yourself or for others, you need to do that as always at the end of every show, I want to take some of your questions and today's no different.
Rick at Rick bloom talks, money.com is our email. First question is Rick I'm inheriting a hundred thousand dollars from my uncle's estate to come from a Roth IRA or a traditional IRA. I can make my choice. Does it make a difference to me? And the answer is yes, it makes a huge difference to you. First of all, in the Roth IRA, whatever you inherit that a hundred thousand dollars, it'd be totally tax free to you.
You won't have to pay any income tax on the other hand. If it is a traditional IRA, you were going to pay tax on the a hundred thousand dollars. So that's why it does make a difference. So all things being equal. I much rather inherit the Roth IRA because I'm going to avoid the income taxes. And that's one of the benefits of a Roth IRAs.
I'm a big believer in them is the fact that when someone inherits a traditional IRA, the person who receives it is going to pay income tax on that money in a Roth IRA, zero income taxes. Dear Rick, my son is in major debt. He makes around $50,000 a year and owes over $75,000. He went to a credit counselor and they put them on a plan, but it doesn't seem to make sense to me, any suggestions.
And this is from Ben. Well, Ben, my suggestion is real simple. I'd have your son file bankruptcy. I think if he's making $50,000 a year and he is $75,000 in debt. There's no payment plan. That's going to allow him to pay that off in any reasonable time. So I would tell him that he should look at bankruptcy and I'm not a big advocate of telling people to file for bankruptcy.
However, I'm also a believer that we're a country that believes in second chances. And if someone needs a second chance, bankruptcy is one way of doing it. And particularly someone that has more debt than they make, it's just going to be very difficult to pay that debt off. So I would recommend he sit down with a qualified bankruptcy attorney and talk bankruptcy, always keep this in mind when someone goes through bankruptcy.
And I always say this all the time. Yes, you can get a fresh start, which is great. However, If you don't change your behavior, if they don't fundamentally change, they're going to be in the same position a few years down the road, and they're not going to have the opportunity to go into bankruptcy. So unless someone's willing to change their habits bankruptcy, isn't going to make a difference.
But particularly in these crazy times where people have been hit with all sorts of bills, lost jobs, Bankruptcy is something that people should consider. And what's interesting. Last year, the number of bank fees actually went down across the country, but I anticipate that moving forward, we'll see more bankruptcies.
Well, our time's just about up for Tijuana. Remind you about our email. Rick at Rick Blum talks, money.com. Any issues you have, any topics you want. I mean, to cover, love, to hear from you. Thanks so much for the company today. I enjoyed it. Hope you do too. We'll see you down the road. Bye now,
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