Having surgery is one the quickest ways to rack up several thousand dollars in medical bills. This article describes some general concepts applicable to all types of surgery.

1) Ask your employer about disability benefits

You may have a short-term or long-term disability insurance benefit through your employer. This is a great benefit to have if your recovery time from surgery will consume a significant portion of your vacation time or paid-time off. Short- and long-term disability insurance are commercial insurance benefits that you can use to pay bills when you cannot work for medical reasons. AFLAC is one example of short-term disability insurance. You may be entitled to payments equal to 60%-70% of your salary while you are recovering from surgery and unable to work.

This is not the same as worker’s compensation. Worker’s comp is a state-funded plan that covers your medical costs when you are hurt in a work-related accident.

2) Learn your health insurance benefits

If you are going to have a major surgery that will involve spending at least one night in the hospital, you need to get an understanding of your inpatient hospital benefits ahead of time. Dig up your benefit plan coverage documents from you last enrollment period and look for the patient deductible, coinsurance, and copays for surgeries and hospital stays. Deductibles of $500-$3,000 or more are pretty standard depending on your benefit plan. A patient’s coinsurance could be anything from 10%-40% of the medical costs or more.

Also look-up your maximum annual out-of-pocket liability limit. Depending on your benefit plan, your maximum annual out-of-pocket could limit your patient liability to anything from $1,500 to $1,000,000 a year. Read the fine print because sometimes your deductible or copays may be excluded from the out-of-pocket max.

3) Consider costs by site-of-service

Outpatient surgery costs in an ambulatory surgery center are almost always lower than going to a hospital. If you have coinsurance, you want the total costs to be lower because your coinsurance portion increases as total costs increase. Insurance companies tend to pay hospitals more than surgery centers to offset the cost of all the homeless and indigent patients hospitals see for free.

Determine if you would pay a better price by going to an ambulatory surgery center with a lower overall costs or by going to a not-for-profit hospital with higher costs and a financial aid policy that will ultimately result in a lower price to you as the patient.

It is my opinion that most insurance companies do a pretty poor job of informing their high-deductible enrollees of how to identify the lowest cost providers. There may be anywhere from 5 to 25 facilities in your area that perform the surgery you need and accept your insurance. However, I have not yet found an insurance company that provides enrollees with a comparison tool so they can compare the prices among all these providers in a meaningful way. Unfortunately, you still have to call all the providers yourself and ask them to tell you the total price you must pay with if you are a self-pay patient or high-deductible patient.

Your total surgery costs as the patient will have a physician component and a facility fee component for the surgery center or hospital. You can shop for the lowest physician’s fee for the procedure as well.

Outpatient surgery costs can vary widely among in-network physicians and facilities even within the same health insurance plan. If you have a high-deductible or if you are a self-pay patient, then you want to seek out the cheapest in-network provider because the first $2,000-$5,000 of any services rendered is your out-of-pocket cost and your responsibility to pay.

Patients may or may not have to pay down their entire deductible for these procedures depending on where they have it performed. You have to pay 100% of your deductible costs, before the insurance company will begin paying anything. So if you have a $2,000 deductible, and you or a family member needs an outpatient procedure like a colonoscopy, you may or may not have to pay your entire $2,000 deductible based on whether you can find a low-cost facility.

The coinsurance coverage rate may differ between ambulatory surgery center and hospital setting or the coverage rate may be the same.

4) Enroll in online access to your health insurance portal

All major insurance carriers give their enrollees online access to their benefit plan, a list of in-network providers, and the Explanations of Benefits (EOBs) for all services they have received. I strongly encourage you to sign up for internet access to these services. It is always free and normally only takes a few minutes to set-up. All you need is your benefit card.

Having access to all your EOBs in one place is pretty important because it allows you to see the correspondence between the insurance company and your healthcare provider, how the insurance company applies your benefits to the hospital bills, and how they calculate the patient liability portion. As I demonstrated in an earlier chapter, your EOB if often the key to understanding your statements and identifying errors.

5) Verify in-network providers

As with all types of surgery, if you have a high-deductible, double-check to verify that you are seeing an in-network physician and going to an in-network facility. If you are treated by an out-of-network physician or facility, the out-of-pocket costs you must pay will be significantly higher. For example, you may have a completely separate deductible for out-of-network and you coinsurance coverage rate may be much worse than in-network. If your in-network coinsurance was 20% of the total colonscopy costs, I’d expect your out-of-network coinsurance to be 40% of the total colonoscopy costs.

You can log into your own personal insurance portal through the website listed on your health insurance card to verify that your providers are indeed in-network with your insurance company.

6) Apply for financial assistance

If you can apply for financial assistance before your surgery even happens, you can give yourself a really good headstart. The application is usually one to three pages long. You may have to attach your last two pay stubs or your tax return for last year. The application is the hospital’s tool for assessing your ability to pay your bill.

I advocate for completing this before the surgery whenever possible. The sooner they apply charity care, hardship discounts, and waivers, the sooner you can lock in a payment plan with the new balance.

7) Understand your post-operative healthcare needs and coverage

You can minimize surprises later by being pro-active in finding out what happens after you leave the hospital. For example, if your recovery will require physical therapy, you should probably find out how many visits are allowed in your benefit plan and what your patient copays will be for each one. Ask your physician about the post-op protocol and prescription drugs you should expect to need.

Many insurance companies are also offering free treatment cost estimators to their enrollees through their online health insurance portals. This is another good reason to get online.

8) Make a plan for paying for all your care

Medical episodes can be very frustrating because unexpected medical bills tend to “pop up” six months to a year after the event. Using the first seven steps will give you a good picture of your total financial liabilities in advance of your treatment. Once you have an overall target cost, you might want to add in another 5% to 10% for contingency money in the event something else “pops up” or in case of an unforeseen complication. This process will allow you to determine the best monthly payment amounts for you situation and also determine if you need to make adjustments to any other personal finances in order to meet your medical liabilities.

Author Bio: Contributed by Nicholas Newsad, M.H.S.A., author of Medical Bill Help and The Medical Bill Survival Guide.

Category: Medical Business
Keywords: medical bills,surgery