When it comes to paying off debt, much of our focus is on credit card debt, student loan debt, and mortgages. Unfortunately, this leaves out the most crippling debt for U.S. consumers: medical debt, which also happens to be the No. 1 cause of bankruptcy in the United States.

Perhaps what is even more shocking is that medical bills are often riddled with errors that often have huge financial implications for patients, says Virgie Bright Ellington, M.D., an internal medicine physician, former insurance executive, and the author of What Your Doctor Wants You to Know to Crush Medical Debt.

Dr. Virgie recently joined the Talk Wealth To Me podcast and shared that somewhere between 80 to 90 percent of medical bills generated in the United States contain errors that can be financially crippling – even to those of us with “awesome insurance.”

“We think we have great insurance that we’re protected,” Dr. Virgie said in Episode 152 of the Talk Wealth To Me personal finance podcast. But the truth is that “most Americans are just one serious illness, serious diagnosis, or one accident or injury away from a lifetime of debt or bankruptcy.”

“Even if you survive it physically, you’re not gonna survive financially,” she said because the United States lacks medical financial literacy, and our healthcare system is run by for-profit publicly traded companies. 

“With this system, you risk death or early death and dying if you cannot pay their bills,” Dr. Virgie said, adding that the United States is the only industrialized country where medical financial literacy is required, yet is something 99 percent of Americans lack. 

Dr. Virgie shared on Talk Wealth To Me that the U.S. healthcare system was created by “bean counters and accountants,” which is why your doctor often has no idea about the financial burden that is being passed on to their patients. And those pricey medical bills? They often create more stress and tension, resulting in further stress, illness, and sometimes even divorce. 

“That’s the crush medical debt model, saving money, saving families, one medical bill at a time,” Dr. Virgie shared, noting that the number one cause of bankruptcy is medical bills. And the number one cause of divorce is financial problems, money problems, and money differences.

“You didn’t elect to get sick; this is not consumer debt,” Dr. Virgie stressed. “Taking advantage of people when they’re at their most vulnerable is just the most unethical, immoral. And just it’s to me, it’s a crime, it’s a sin.”

Crushing Medical Debt

Dr. Virgie first became interested in medical debt after realizing she had been financially taken advantage of to the tune of $90,000 while she was in the hospital healing from a hysterectomy. But her tipping point came when she overheard her hospital roommate being taken advantage of financially.

From a shared hospital suite, Dr. Virigie overheard her hospital roommate was required to sign documents before being discharged from the hospital. But what concerned Dr. Virgie is that the documents this woman was being asked to sign would require her to be financially responsible to the hospital for any payment that her insurance company refused to pay. 

“I saw red because I knew that she had been tricked into a lifetime of debt for her and her family just wiped out and stressed. And I thought you know what, Virgie? Don’t get angry, don’t get mad, go do something. And that’s how Crush Medical Debt was born.

“I knew that folks, even those of us with 20 years in the industry of formal education and experience in the health industry, had no clue how medical billing actually worked.” 

That experience led Dr. Virgie to research how other people could avoid crushing medical debt from crippling their financial lives and led to the creation of Dr. Virgie’s three-step process for medical debt. 

Dr. Virgie’s Three Steps for Crushing Medical Debt

Although not technically one of Dr. Virgie’s three steps for crushing medical debt, her first recommendation can be a financial game-changer when you need to visit a hospital or medical facility: Don’t sign anything.

If you sign any paperwork or a digital tablet, you’re “literally giving the medical system a signed blank check for the rest of your life,” she said. 

By federal law, every single emergency facility that provides emergency care has to stabilize you before they transfer you out for financial reasons. “They will still treat you,” says Dr. Virgie. 

But the reason medical facilities push patients to sign these documents? It allows the medical facility to collect money from consumers. 

“The 1978 fair debt collections practices act says that if you get a call from a debt collector, they have to show me my signature, or proof that I agreed to the services or that I said, I received the services period. If they can’t show you that they’re done.”

Hospital administrators or other administrative staff may push back against your refusal to sign the paperwork, Dr. Virgie says. 

“They may say, this is just your privacy notices, or this is just letting you know about our protocol to keep you safe from COVID. I don’t care. I’m not signing anything that is on a pad. You print it out for me, and I’ll sign it. Maybe when I’m able to, you hand it to me, I’ll read it. Maybe I’ll sign it. I’m too sick to read it or too scared.” 

“It doesn’t matter how many people are waiting behind you. It does not matter how long the line is, how upset they get or how nasty. It’s not your problem, not your problem. They’re not gonna be with you down the road when you get hit with a giant medical bill.”

“You’re gonna be safe. You’re gonna be okay. Don’t sign it.”

But what happens after you’ve gotten treatment and have now received a giant bill in the mail from a medical facility? What steps can you take to crush that medical debt before it crushes you?

1. Request Itemized Bill with CPT Codes

Phone the hospital or medical provider to request an itemized bill that contains CPT (current procedural terminology) codes. CPT codes are to medical services in the United States as to what bar codes are to every other product that you buy. 

These unique codes, one assigned for each medical service, determine how much Medicare would pay for medical services. Dr. Virgie estimates around 330,000 different CPT codes noting there are tons of different tests and procedures performed in the United States. 

Review this document carefully for any CPT codes, which usually contain the letters CPT in capital letters followed by five numerical digits. 

Dr. Virige says sometimes these billing codes start with the letter D or J followed by five digits but notes if that code is absent, it’s not a real bill. It’s just a statement where they’re hoping and praying you’ll just pay it because it works 90 plus percent of the time.

“I don’t call it a bill anymore I like to call it a statement because it’s really just a wishlist they’re wishing and hoping and praying that you’ll fall for it,” Dr. Virgie says. 

Typically there’s a phone number located at the bottom of the “bill” that connects you to a billing department or patient accounts department. Dr. Virgie recommends calling that number and if you didn’t receive a bill with CPT codes, ask for a “real bill” with CPT codes, as Dr. Virigie has done herself. 

But a word of warning, the person on the other end of the phone is most likely to push back against your request. And may even try to scare you into agreeing to pay off that original number they billed you for, possibly by making you feel like they are aware you can’t financially afford this bill. They may try to hustle you into a payment plan.

In Dr. Virgie’s own experience, when asking for a real bill with CPT codes, she’s been told that she would have to get that information from her insurance company, which is not accurate, as Dr. Virgie notes that a medical facility can only send CPT coded bills to an insurance company for payment. 

But the insurance company may only pay a portion of what the medical facility charged, which is why medical facilities and medical professionals often charge so much – they’re trying to get as much as they can from insurance companies.

Whatever financial amount the medical facility is unable to recoup from the insurance company, 8 or 9 out of 10 medical facilities will try to pass along that amount to the patient, Dr. Virgie explained. This is something called “balanced billing.”

For example, let’s say you have a procedure that costs $100, but your insurance only pays $70. A medical facility may try to bill you for that remaining $30 even though, technically and legally in some states, you don’t owe any additional sum.

The big takeaway: “Don’t be afraid of that huge number” on your medical bill – you may not even owe that much money. 

2. Verify CPT Codes & Pricing

Once you ensure you have a real medical bill complete with CPT codes, use an internet search engine to review and verify that the CPT codes align with the medical procedures and treatments that you received. 

You’ll also want to determine the comparative prices that are associated with that medical procedure or treatment, such as the medicare price, as you should not pay more than that number.

Medical services, every single medical service test, office visit, ER visit, hospital test, radiology test, or operation has its own CPT code. Get a brief description of the service that they’re charging you for to make sure it sounds familiar to the services you received and make sure you’re not getting double billed or something. 

For example, if you have a hysterectomy, and that’s what the doctors told you they did, but you’re getting billed for a hysterectomy and a myectomy, which is a fancy name for removing uterine fibroids, then you may want to investigate that further. You’ll also want to research what Medicare pays for each CPT code because that’s the basic rate, says Dr. Virgie. 

“Anything above that when insurance companies pay private commercial insurance companies pay, and if you don’t have insurance, the provider’s full retail rate is on average 300 to 500 percent more than what Medicare, the federal government will pay for the exact same service. And unfortunately, guys, up to a thousand to 2000 percent more than what Medicare pays for the exact same service.”

3. Negotiate an Affordable, Interest-Free Payment Plan

After you’ve determined that you’re only being billed for procedures and services you received, add up what Medicare pays for each of these procedures and services, and call back the billing department or patient accounts number from step one.

Negotiate with the hospital or provider and set up a monthly payment plan that fits your budget.

“You’re gonna say, you know, I was sent an invoice or a bill for $10,000, but I’ve been doing research, and the actual price for this is $3,000. This is what Medicare charges for the same service, and this is what I’m able and willing to pay,” Dr. Virgie said.

Ask for an interest-free payment plan within your budget, and make sure to tell them what your budget is.

For example: 

Suppose a patient has received a bill from a hospital for a medical procedure and, after getting all the CPT codes associated with that procedure, discovers that the payment range should be around $1,000, a number far lower than the $5,000 price tag on the bill. 

According to Dr. Virgie, when the patient phones the billing department, they should say something like, “Researching my case shows that the fair Medicare price is $1,000, which is the amount that I can fit into my budget at $100 a month. Can you tell me who I should speak with to get this payment plan interest-free?”

Again, expect there to be pushback.

“They’re gonna say, if everybody paid the Medicare rate, we wouldn’t be able to stay in business. You know, I had to be honest, guys, I’m not so sure that’s true. And number two, it’s not my problem,” Dr. Virgie shared on Talk Wealth To Me.

You can let the billing department know that you’re appreciative of the medical teams that provided life-saving care and stress that we’re gonna pay them, but we’re not gonna do it at the expense of shelter and utilities for our family, keeping them safe and warm and the opportunity, the ability to get to and from work. 

“So you’re not gonna miss a car payment. You’re gonna make sure your insurance, you’re not going to do anything that’s outside of your budget,” Dr. Virgie said. “That’s why it is what it is – it takes as long as it takes.” 

Again, the billing department may push back and stress that if you only pay a hundred dollars a month towards your $3,000 bill, it will take forever for them to get paid. 

If you can remember – try to laugh this part off and not get too overwhelmed thinking you’ll be paying back this debt for the next 10+ years. “Stick to your guns and say I know, I’m sorry, a little bit of something is better than all of nothing,” Dr. Virgie says, noting that the medical facility will eventually accept your offer.

“You’re being proactive, you’re reaching out to them, you’re not ignoring them, they don’t have to chase you and potentially get nothing or sell the bill to debt collectors for just pennies on the dollar. That’s why eventually, they’ll accept it. 

“Stick to your guns,” Dr. Virigie said. 

Want to learn more?

What Your Doctor Wants You to Know to Crush Medical Debt: A Health System Insider’s 3 Steps to Protect Yourself from America’s #1 Cause of Bankruptcy by Dr. Virgie Bright Ellington is available on Amazon, Barnes & Noble, and local book retailers.