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Sick of Confusing Medical Bills? Here's how to protect your finances.

In May 2015, Chris Brown, a 32-year-old web developer living in Los Angeles, sought medical help for depression. He was hospitalized for four weeks. The charges for his stay and treatment at one point came to $33,415. It should have been affordable because of Chris’ health insurance coverage. But the hospital billing department sent a portion of the claim to the wrong division of the insurer. When the hospital didn’t get reimbursed, bills ranging from $140 to more than $11,000 started arriving at Chris’ home.

That simple clerical error set off a two-year medical billing ordeal for Chris, who moved to Modesto, Calif., after his hospitalization to live with his parents. His mother, Sharyn, 65, worked in medical insurance billing before retiring. So she thought she understood the system, but even she was stymied. “I knew enough to know he wasn’t getting the reimbursement he was owed,” she told Consumer Reports.

Over the next months, Chris and his mom placed scores of calls and sent as many emails to the hospital and the insurer. Sharyn kept a folder of notes that grew to be inches thick. “Every time I called it was like starting over, having to re-explain everything to a new customer-service rep, and none of them seemed to have clear information on their end.”

Meanwhile, the hospital sent Chris’ account to a collection agency, though it was eventually removed from collections after the bill was disputed. Dignity Health Northridge Hospital Medical Center, where Chris was treated, declined to comment on the case for this article, citing patient confidentiality.

In spring 2017, an exasperated Sharyn finally reached a customer-service rep in the resolution department at the insurer, Blue Shield of California, who promised to help get the issue sorted out. The rep told Sharyn to write a “special consideration” letter explaining the details of the case—something she had not previously been instructed to do. The rep also found a supervisor in the hospital billing department to look into Chris’ situation. In August that year, more than two years after treatment, the hospital acknowledged the billing error and mailed Chris, who had been making payments, a $943 refund. Sharyn says the balance is now zero. “We were very fortunate we got someone to help us,” Chris says.

A Broken Billing Process

If the Browns’ saga sounds familiar, that’s because it’s being replayed around the country, as millions of Americans struggle with medical billing problems—everything from inaccurate charges to surprise fees to wrongly denied claims. No one seems to be tracking national data on healthcare billing issues, but problems are exceedingly common. In a recent nationally representative Consumer Reports survey of 1,000 insured adults who incurred a major medical bill in the past two years, two out of three said they had at least one billing issue, such as higher-than-expected charges, unclear statements, and bills arriving months late.

And because the medical bills themselves are so confusing—filled with specialized terms and lacking clarity about whether you or your insurer is responsible for payment—millions of Americans give up trying to fight them. According to the CR survey, more than one-third of respondents said they paid bills they weren’t sure they owed—20 percent of that group paid more than $1,000. Among the reasons they gave for doing this: The bill was too confusing, they were uncertain their efforts would make a difference, and they were concerned that not paying would hurt their credit record.

“The medical billing system is so inefficient and complicated, people don’t even know how to make a dispute,” says Martin Gaynor, professor of economics and health policy at Carnegie Mellon University. “They just throw up their hands.”

Of course, few Americans can afford to pay medical bills they may not owe—let alone ones they do—and the dysfunctional system is wrecking people’s finances. Nearly two out of 10 in the CR survey said their credit score was affected by an unpaid medical bill. Nearly 3 out of 10 people in the survey said they had unpaid bills sent to collections. Of those, 61 percent said they could not afford to pay, 24 percent didn’t realize they owed, and 21 percent lost track of the bill.

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