How much you can save on medical costs from using a medical billing advocate
The amount of savings a client will experience from a medical billing advocate, or third party negotiator, will vary. It depends on the exact type of health care provided, the advocate hired, and other factors. However, at the end of the day, you will almost always experience some type of savings on your medical expenses with some studies showing that advocacy can reduce a patients expenses by as much as 50%. There are some companies that will work on a contingency basis. So that means that the negotiator or advocate will not charge you anything unless they are able to successfully save you money. Many companies will also require that the total amount of your hospital or medical bills meet a certain threshold. They may not take on clients with small dollar amounts due. For example, you may need to have a minimum of $250 due on a bill in order to have them sign you up as a client.
How much can I save from an advocate?
Hiring a medical billing advocate, whether a non-profit or “private” company, can lead to substantial savings. Advocates review medical bills as well as the type of care you received, identify discrepancies, and negotiate with healthcare providers and insurance companies. Patients who enlist their services often see savings averaging between 30% to 50% on disputed bills However the exact amount of savings will vary. Even the range of 30 to 50% is wide, but some people may save less and others save more. So the range of potential savings is very wide and it may be realistic to expect something in the middle of that range - however most people will save at least some money. One of the key steps of this process is the data they have on similar procedures, operations, or medical expenses that have been incurred by others. They use that information to compare the prices for the same services at different hospitals, medical facilities, and other health providers in the same geographical area as where you received your health care services. Certain medical procedures are more prone to finding savings . Certain care is more likely to have medical billing errors or insurance disputes, making advocacy particularly beneficial for some or all of the following.
Surgical Procedures:
Complex surgeries, such as orthopedic or cardiac operations, often involve multiple billing codes, types of doctors and providers, increasing the likelihood of errors from all the different doctors or practices.
Emergency Room Visits:
The fast-paced nature of emergency care can lead to documentation mistakes or even unneeded treatments provided, resulting in inflated charges.
Out-of-Network Services:
Receiving care from out-of-network providers or a doctor your insurer does not “approve” can lead to surprise bills. Advocates can negotiate these charges down or assist in appealing them.
Some examples of the amount of typical savings include the following:
Savings of 10 – 80% at emergency and surgery centers 20-37% for radiology and imaging medical bills
- – 33% for anesthesia treatments
- – 48% on dialysis treatment
Hospital bill savings programs including charity care enrollment from ACA hospitals
Medical bill advocate success rates and outcomes
The effectiveness of medical billing advocates is well-documented. A study from the University of Southern California (USC) Schaeffer Center found that 74% of patients who reported billing errors had their bills corrected, and 76% of those unable to afford their bills received some form of financial relief after seeking assistance with details here. https://schaeffer.usc.edu/research/challenging-medical-bills-cost-study/ . According to the American Medical Association , over 80% of prior authorization appeals are successful with a medical bill advocate able to cover that. The AMA data suggests that patients who challenge health insurance denials, often with the help of advocates, have a high likelihood of overturning unfavorable decisions and saving money. As the cost of care that is insured vs not is substantial. More details is here. https://www.ama-assn.org/practice-management/prior-authorization/over-80-prior-auth-appeals-succeed-why-aren-t-there-more .
- cross-sectional survey published in JAMA Health Forum also provides information on the benefits of negioting medical bills and/or using an advocate. The survey found that among patients who self-advocated regarding unaffordable medical bills (whether from their insurance company or a medical provider), 25.7% achieved bill corrections, 15.2% secured price reductions, and 7.3% had bills canceled. Notably, 75.8% of respondents seeking financial relief received some form of assistance with information here.
https://pubmed.ncbi.nlm.nih.gov/39212978/ . Also medical billing advocates offer other benefits as well. This will be above and beyond people saving money. Some of the other benefits include the following.
Time Savings:
They handle the often time-consuming process of communicating with billing departments and insurance companies. Medical billing advocates also help with any paperwork and forms that need to be completed.
Stress Reduction:
By managing disputes and negotiations with an insurance company or provider, advocates will definitely take stress of the patient. Advocates will alleviate the emotional burden associated with medical billing issues.
Education:
Advocates educate patients on their rights, state laws or regulations and how to navigate the healthcare billing system. Potential savings are made based on insurance rates too. So what this means is that an uninsured patient may be charged $500 for a service from their doctor or hospital. However an insurance company would only be charged (and need to reimburse the hospital) say $300 for that exact same service. It means those who lack insurance are not treated the same way as patients that are fully insured and the medical billing advocate will help with those issues. they can refer people to a variety of money saving programs .
What are fees involved for medical billing advocates or negotiators?
If you signed up for a contingency payment plan, and if the negotiator or advocate was successful, you will generally split the savings with the company you employed. The split is usually 70/30. What that means is that usually you will receive 70% of the savings, and the company that negotiated the discount will receive the balance of 30%. Therefore even while 100% of the savings will not go to the patient, the fact that some savings are possible is a huge advantage. As an example , if an advocate helps reduce a $10,000 hospital bill down to $5,000, You saved $5,000. At a 30% contingency, the advocate's fee would be $1,500 (30% of the $5,000 saved). So you will still “walk away” with $3,500 in total savings. However these breakouts will vary based upon the specifics of your case and contract. What make a contingency arrangement so appealing is that if the negotiation wasn’t successful, the individual doesn’t have to pay any money for the service.
How do I sign up for savings from a medical advocate?
The process to sign up or apply to a company will also vary. Sometimes you can use the website of the negotiating company to submit your claim. There are other instances in which you may need to do a online application or even print an application and mail it or fax it in. In either case, plan on providing full details on your situations, including copies of the medical bills, information on the procedure provided, dates of service, and more. In an era where the cost of health care continues to increase at a rapid rate, and many people struggling to pay for their medical needs, medical billing advocates serve as an important resources for patients. Their expertise in understanding the industry, negotiating rates and finding errors (among other things) not only leads to significant cost savings but also provides peace of mind during often a stressful people for people as they get the healthcare they need.