When we last left off, Steve was facing the point where medical debts could soon become reportable to credit bureaus. Over the course of three and a half months, we had sent three requests for information. After a response to the initial query, the provider had gone completely silent.
Luckily for Steve, those three and a half months had given us something valuable: an uncontested administrative record with the door left wide open for clarification or supporting documentation at any time. This positioned us perfectly for the next step: an adjustment request.
An adjustment request, in medical billing terms, is a formal ask for the provider to reduce or eliminate specific portions of the medical debt. This is precisely why I sought an offramp from the financial aid track once it became clear that no resolution was possible from that angle. Everything from this point forward was where the actual financial recovery for Steve could be achieved.
However, something else rather subtle is happening here. Officially disputing debts often prompts primary creditors to pause all collections activity and credit reporting during the review period. This is not a strict legal requirement, but a practical compliance consideration. Many providers avoid reporting disputed items to mitigate potential FCRA issues down the line. However, this is not to be a permanent solution; the pause lasts only for the duration of the review.
For Steve, this meant a reprieve from aggressive collections efforts and the risk of a credit report entry until the process concluded, turning months of silence into meaningful breathing room at a critical time.
Before I could proceed, some research had to be done. In fact, this was perhaps the most research and data-intensive part of the whole case. Solidifying these details now would guarantee a clear glidepath through the rest of the process.
Since I knew we had to find a way to offramp or fully address items related to pricing, we performed an analysis on CMS and regional benchmarks for the same procedure or CPT code.
Secondly, we examined Explanation of Benefits, or EOBs, provided by insurance. While a detailed billing statement from the provider only outlines specific information in blocks according to account, the only line-item information they provide is how much they charge for a certain line item. We use EOBs to find out how much insurance paid for certain charges. Using simple subtraction, I can determine the patient responsibility for each line item.
What I found was interesting. The EOBs showed that many of the high-priced charge items we were arguing squarely based on price were so heavily subsidized by the insurance company that pursuing them in any real manner wasn’t viable. They were immediately dropped into Category 4.
On the other hand, the items where pricing assertions were made by the Revenue Integrity Director had largely checked out. According to regional benchmarking, or by comparing what other hospitals in the region charge for the same procedures, what the provider had charged Steve was more or less on average, or at least within 2-3%. These also were dropped into Category 4.
Based on these findings, I had another strategy meeting with Steve. I had to inform him that we needed to drop all matters related to pricing (except for one, and only because there is no CMS or regional benchmark for this item). More specifically, it wasn’t a concession, but a shift in strategy. By cleanly removing most pricing matters from the dispute, this allowed us to narrow our focus squarely on documentation issues.
I had cleanly sorted all disputed charges into four categories with detailed explanations:
Category 1 – Potential Coding / Crosswalk Deficiency
Category 2 – Potential Duplicate / Global vs. Component Adjustments
Category 3 – Charges Requiring Cost Substantiation
Category 4 – Charges Not Further Disputed (Dropped / No Adjustment Required)
Category 4, by and large, contained the most items. This was not only how we offramped pure pricing concerns, but how we effectively narrowed the dispute. While I could fight every point, there are ethical considerations in addition to matters of practicality. Narrowing helps define a clean scope for both parties.
There are two contingency clauses I had left in the PRAR.
“While courtesy or goodwill adjustments are appreciated, any such adjustment must be clearly attributed to a specific charge and documented in writing. Adjustments that do not address the underlying documentation gap or coding determination will not be considered reconciled.”
What this does is provide us some protection in case they want to make what are called “nuisance offers,” “token concessions,” or, as stated here, “goodwill adjustments.” In effect, each of these are the same thing, but under a different name. They are an attempt for the business to settle at a low cost. These are fairly common, and patients accept them, whether explicitly or most oftentimes implicitly through silence.
This is necessary because healthcare providers have wide latitude under law to make small adjustments quietly. As long as the changes are reflected in later statements, they don’t have to notify patients. The only way to sus them out is by paying close attention to billing statements for divergence. Some patients allow these to ride, allowing the provider to shut the door on further negotiations and mark the case as closed.
We don’t necessarily discourage them (who says no to free money?), but we do keep the focus narrow on total resolution through write-offs or substantiating documentation. The door is always open to receipts if they want to show them.
The second contingency is a proposal for an “Optional Review Session”: “As an alternative to providing written documentation for each line-item, we are open to participating in a controlled review session with a qualified representative who can clearly present the supporting data for the charges in dispute.”
I know that there is almost no chance they accept this offer. However, we did this because we knew that exposure was an issue for them. This option would allow them to quash the matter without having data floating out in public, thus nullifying their ability to use defenses alleging proprietary data later on.
Even if it seems a bit farfetched, this is a reasonable request. If they are documented to have rejected reasonable, low-impact requests, this has broader implications if the matter were to advance beyond the internal process.
With the most research-intensive portion of the case out of the way, I then focused on setting up a glide path to close out the internal process.
They reacted to the adjustment request with more silence.
As each day passed with no response, it became more apparent that this matter would likely drag on beyond what the internal process typically allowed, and that we would likely need to pursue resolution outside their internal process. What that meant for me is that my role would soon be coming to an end. We had one more bite at the apple: a formal administrative review. This is a request under the provider’s grievance protocol that allows high-level staff to examine the file in depth and compels them to take a position in writing.
Given the veracity with which they defended their practices in the one and only response, and given nearly four and a half months of silence up to this point, it was likely that they would continue to defer negotiation.
This is a critical juncture for me. Since I am not a lawyer, this means I would have to build a handoff packet and present it to the client while not advising him on next steps one way or another.
However, the implication would hang in the air like a thick fog—lawsuit.
Unfortunately, this is something that Steve was averse to and wanted to avoid at all costs. He is not out for blood, nor does he want any drama. And because he is so principled, this is why I took the case. I believe that my approach is the best fit for people like him who seek to handle things at the lowest level with as little noise or impact as possible.
With about a week and a half left within the PRAR timeline, something happened that would change the trajectory of the whole case.
The provider had mailed Steve a billing statement with collections language.
Stay tuned for Part 4 to learn more.