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How to Deal With the Pain of a Surprise Medical Bill

When it comes to "bill shock," a surprise medical expense can be particularly damaging.

Over the past two years, nearly one-third of privately insured Americans has received an unexpected medical bill where their health plan paid less than expected, according to a May survey from the Consumer Reports National Research Center.

For many, it's an expense that isn't so easy to handle. A 2014 Kaiser Family Foundation report estimated one in three consumers have difficulty paying their medical bills, and earlier this year, Bankrate.com found that only 38 percent of consumers had enough liquid assets to cover an unanticipated expense like an emergency room visit or $500 car repair.

Worse, whether you're disputing the charge or simply can't pay, medical debts are quick to reach collection status. One in five consumers have an unpaid medical debt on their credit report, according to a 2014 Consumer Financial Protection Bureau study. The average amount owed: $579. (Recent changes can mean such debts will have less of an impact on your credit score, but affected patients still have to deal with debt collectors.)

One of the best ways to avoid a surprise is to call your insurer ahead of a medical procedure or visit. (Check out the video above for other proactive measures.) Dig into plan specifics related to deductibles, coinsurance and maximum out-of-pocket costs, said Cheryl Fish-Parcham, private insurance program director for Families USA, a health-care advocacy group. "Deductibles can be very confusing to people," she said — there may be different figures for an individual versus his family, and for in- and out-of-network care.

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Don't assume that because your doctor or hospital is in-network, that you're all clear. Some insurers have tiered-service networks, reimbursing some in-network providers more than others, said Fish-Parcham. Other times, surprise bills come from on-site service providers — say, those doing lab work or radiology during that hospital stay — who aren't in the network, even though the hospital itself is.

If you're on the receiving end of an unexpected medical bill, ask for a detailed or itemized statement. "The (initial) statements that you get are summaries," said Pat Palmer, founder of Medical Billing Advocates of America. "A patient would have no clue what they're being billed for."

That can help you spot — and negotiate off — errors that don't match your medical record, like a medication the doctor discontinued Tuesday that was still being charged for on Friday, or discrepancies over the amount of time you were actually in the operating room (which is typically billed by the minute). "That could be an enormous amount of money saved," Palmer said.

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Check to see if any of the bill stems from your insurer rejecting a charge. "It could be a simple coding error," said Fish-Parcham — in which case you can ask the provider to resubmit the charge correctly. Or the insurer might reject care it thinks was unnecessary after a doctor said it was, a situation which a patient can appeal.

"It's worth checking with your state insurance department to see if there are any protections that might apply to you," said Fish-Parcham. New York, for example, recently enacted a law that protects insured consumers from additional charges for out-of-network emergency services in a hospital.

Still left with a balance? Ask providers if there are payment plan options or a discount if you can pay the balance quickly. "A lot of facilities, when we work with patients, will give 15 percent or so off," said Palmer.