Never Pay the First Bill by Marshall Allen

I enjoy finding ways to exercise my rights as a consumer and push back against corporate abuse, so this was right up my alley.

The book was eye-opening and made me infuriated with how corrupt the medical system is in the US and how much it extracts wealth by fleecing the middle class.

My wife and I recently had a child, so my family’s medical bills are atypically high. Reading the book saved me thousands of dollars by alerting me of how common incorrect medical bills are and what to look for to avoid providers from overcharging you.

What I liked 🔗︎

• It got me fired up about exercising my rights as a patient.
• It included several practical techniques for challenging unfair medical bills.
• The biggest bang-for-buck technique I’ve learned is simply comparing my medical bill to the explanation of benefits from my insurer.
  • It saved me over $3k on four separate incorrect bills.

What I disliked 🔗︎

• The author doesn’t have a good sense of which techniques are effective.
  • He sometimes says, “I’ve heard this works,” but I’d like to see a bit more information about what’s worth trying vs. what’s unlikely to get results.
• In a lot of the stories the author shares about his personal experience, he reveals to the provider that he’s an investigative reporter for ProPublica, so that gets him better outcomes with these techniques than the average person could achieve.
• It’s fairly “fluffy.” There’s about 40 pages of practical advice stretched out into a 300-page book.

Key takeaways 🔗︎

Compare your medical bill with your insurer’s EOB 🔗︎

• Compare the bill you receive from your provider with the explanation of benefits (EOB) you receive from your insurer.
  • If the provider’s bill lists a higher amount of patient responsibility than your insurer’s EOB, show the EOB to the provider and tell them to send you a corrected bill.

[Editor’s note: This has been the most effective technique for me and has saved me a total of $3k+ on four separate incorrect bills in the last six months.]

Verify the CPT codes on your bill 🔗︎

• Each charge on your medical bill requires a five-digit code called the Current Procedural Terminology (CPT) code.
• Infuriatingly, regular Americans don’t have access to the definitions of CPT codes.
  • The American Medical Association holds the copyright to CPT codes, and they make most of their money licensing the codes.
• If your provider didn’t send an itemized bill with a CPT code for each charge, ask them for a version with CPT codes.
• When you have a bill with CPT codes, search online for each CPT code on your bill.
  • You won’t be able to access the official definitions unless you buy a $15/mo subscription from the AAPC, but you can find third-party sites that give decent explanations of the criteria for each code.
  • Pay attention to objective criteria in the CPT code such as how long the provider must spend with the patient and whether they conducted a thorough history.
• If the CPT code does not match the service the provider gave, ask your provider to see the medical records for the visit that justify the code.
  • If the medical records don’t support the code, ask your insurer to work with the provider on re-coding it.
  • If the provider falsifies their medical records to upcode, there’s not much you can do to fight them.

Negotiate the price based on local market pricing 🔗︎

• As of January 1, 2021, hospitals were supposed to publish pricing in both machine-readable and human-readable formats.
• You can use hospital pricing to compare the price on your bill to the price other hospitals in your area charge for the same CPT code.

[Editor’s note: This hasn’t worked for me because all the hospitals in my area ignore their requirement to publish pricing. When I complain to their billing department, they say they don’t know what I’m talking about.]

Shop around for medical services 🔗︎

• Hospitals tend to charge the most for medical care.
• If you know the medical service you need and don’t need care urgently, you can get better a deal by asking for pricing at different clinics in your area.

Ask to pay cash 🔗︎

• Ask providers for the cash price without insurance.
  • For some services, your out of pocket costs are lower by paying cash without going through your insurance
  • The subtlety of paying in cash is that spending won’t count against your insurance deductible or out of pocket maximum, so it could come back to bite you depending on if you expect to hit your deductible or out of pocket max for the year.

Insurers want higher medical bills 🔗︎

• As a patient, you expect that your insurer’s incentives are aligned with yours to prevent medical providers from overbilling you.
• In reality, there are several factors that incentivize insurance companies to drive medical prices higher.
  • The Affordable Care Act set limits on how much insurers can profit from customer premiums, so insurers can’t make more than 20% profit.
    • This rule has the unintended consequence of benefitting insurance companies when medical costs go up nationwide.
      • e.g., if an insurer can only make 20% profit on $500M/yr in medical spending, then they make more profit in absolute terms if they allow providers to drive up medical spending to $700M/yr.
  • Insurers and providers often have intermingled businesses where the insurance company that’s supposed to be controlling costs is actually the same company providing medical services.
  • In cases where the patient is responsible for the majority of the cost, the insurer has no reason to invest resources into fighting an inaccurate bill, as the patient is the one who has to foot the bill.

Medical bills have an extremely high error rate 🔗︎

• Most people don’t know how to verify that the charges on their medical bill match the services they received or that the prices match market rates, so medical providers often bill inaccurately.
  • Insurers are supposed to keep providers from overbilling, but they don’t have strong incentives to catch errors.
• Some providers routinely “upcode” for services.
  • For example, if they spent 10 minutes with a patient, they’ll bill using a code that says they spent 30 minutes because it means they can charge more.
• Crystal Polson, an RN and professional bill reviewer Allen interviewed for the book said that when clients give her bills to examine, she finds billing errors in 80% of them.
• Providers have nothing to lose by overbilling because so many patients pay without questioning the bill.
  • The worst that can happen from the provider’s perspective is that a patient complains and only has to pay the correct amount.
  • Maddeningly, there’s no recourse for you as a patient when providers routinely bill you incorrectly and you have to waste time correcting the errors.