Can I sue over incorrect or excessive medical bills?

Medical Billing Disputes: Understanding Your Legal Options

Medical billing errors and surprise bills are among the most common financial disputes Americans face. Studies have consistently found that a significant percentage of medical bills contain errors — from duplicate charges and upcoding to bills for services never rendered. When these errors result in inflated bills, collections activity, or damage to your credit, you may have legal options to challenge them. This guide explains the legal framework for medical billing disputes, the protections available to you, and what steps to consider if you receive a bill you believe is incorrect or excessive.

It is important to understand that every billing situation is different, and this information is educational only. Whether you have a viable legal claim depends on the specific facts of your situation, applicable federal and state law, and a variety of factors that an attorney or patient advocate in your area could evaluate.

Common Types of Medical Billing Errors

Medical billing errors take many forms. Understanding the most common types can help you identify problems on your own bills:

• Upcoding: Billing for a more expensive service or procedure than what was actually provided. For example, a routine office visit billed as a comprehensive evaluation, or a simple procedure coded as a complex one.
• Duplicate billing: Being charged twice for the same service, test, or procedure. This can happen when a claim is resubmitted or when different departments at the same facility bill separately for the same service.
• Unbundling: Separately billing for services that should be billed together under a single code at a lower cost. Certain procedures include associated services in the code, and billing them separately inflates the total.
• Charges for services not rendered: Billing for procedures, tests, or supplies that were never actually provided. This may result from clerical errors or, in some cases, intentional fraud.
• Incorrect patient information: Errors in insurance identification, diagnosis codes, or patient demographics that cause claims to be denied or processed incorrectly, resulting in bills being sent to the patient.

The No Surprises Act: Federal Protection Against Surprise Bills

The No Surprises Act, enacted as part of the Consolidated Appropriations Act of 2021 and effective January 1, 2022, provides the most significant federal protection against unexpected medical bills. The Act addresses three specific situations where patients previously had little protection:

Emergency Services

When you receive emergency medical care, the No Surprises Act prohibits out-of-network providers and facilities from billing you more than your in-network cost-sharing amount. This applies regardless of whether the facility is in your insurance network. The rationale is clear: patients cannot shop for in-network providers during a medical emergency.

Non-Emergency Services at In-Network Facilities

When you schedule a procedure at an in-network hospital or surgery center, you may reasonably expect that all providers involved will be in-network. However, the anesthesiologist, radiologist, pathologist, or other specialist involved in your care may be out-of-network without your knowledge. The No Surprises Act protects you in this situation — these out-of-network providers at in-network facilities may not balance bill you for the difference between their charges and what your insurance pays.

Air Ambulance Services

Out-of-network air ambulance providers may not balance bill patients beyond the in-network cost-sharing amount. Ground ambulance services, however, are notably excluded from the Act's protections — a gap that Congress has acknowledged but not yet addressed.

Good Faith Estimates for Uninsured and Self-Pay Patients

The No Surprises Act also requires healthcare providers to give uninsured and self-pay patients a "good faith estimate" of expected charges before providing scheduled services. If the final bill exceeds the good faith estimate by $400 or more, the patient may initiate a patient-provider dispute resolution process. This provision gives uninsured patients — who historically had the least leverage in billing disputes — a meaningful mechanism to challenge excessive charges.

Insurance Claim Denials and the Appeals Process

Many medical billing disputes arise not from provider billing errors but from insurance claim denials. Your insurance company may deny a claim for various reasons: the service was deemed not medically necessary, the provider was out of network, prior authorization was not obtained, or the claim was not submitted correctly. When a claim is denied, you — not the provider — typically receive the bill for the denied amount.

The Affordable Care Act guarantees you the right to appeal claim denials through a two-step process:

1. Internal appeal: You submit a written appeal to your insurance company, including any supporting documentation such as your physician's letter of medical necessity, relevant medical records, and published treatment guidelines. The insurer must review the appeal and issue a decision within specified timeframes — typically 30 days for non-urgent pre-service appeals and 60 days for post-service appeals.
2. External review: If the internal appeal is denied, you have the right to request an external review by an independent, accredited third-party reviewer. The external reviewer's decision is binding on the insurance company. External review is a powerful tool — studies have found that a meaningful percentage of externally reviewed denials are overturned in favor of the patient.

Balance Billing: When Providers Bill You for the Difference

Balance billing occurs when an out-of-network provider bills you for the difference between their full charges and the amount your insurance company paid. For example, if a provider charges $5,000 for a procedure and your insurer pays $3,000 based on the network-negotiated rate, the provider bills you for the remaining $2,000 — in addition to any deductible or copay you owe.

The No Surprises Act prohibits balance billing in the specific situations described above. Outside those protected situations — for example, if you voluntarily chose to see an out-of-network provider for non-emergency care at an out-of-network facility — balance billing may still be permitted under federal law, though your state may have additional protections.

Medical Debt and Credit Reporting

Unpaid medical bills can be sent to collections and may affect your credit. However, recent changes to credit reporting practices have improved protections for consumers with medical debt:

• The three major credit bureaus (Equifax, Experian, TransUnion) implemented a one-year waiting period before medical debt appears on credit reports, giving patients more time to resolve billing disputes and insurance claims.
• Medical debts under $500 are no longer reported on credit reports.
• Paid medical collection debts are removed from credit reports.

These changes do not eliminate the underlying debt, but they reduce the credit impact of medical billing disputes while you work to resolve them. If a medical debt collector contacts you, you have the right under the Fair Debt Collection Practices Act to request written validation of the debt within 30 days and to dispute the debt in writing.

When Medical Billing Errors May Constitute Fraud

Some medical billing errors cross the line from mistakes into fraud. Healthcare fraud — the knowing submission of false claims for payment — is both a civil and criminal offense. Common forms of healthcare billing fraud include:

• Systematically upcoding services across many patients to increase revenue
• Billing for services that were never provided ("phantom billing")
• Unbundling services that should be billed together to inflate total charges
• Billing for medically unnecessary services
• Kickback arrangements where providers refer patients for unnecessary tests or procedures in exchange for payment

If you suspect healthcare fraud, you may report it to the HHS Office of Inspector General. Under the False Claims Act, private citizens may file qui tam lawsuits on behalf of the federal government against providers that submit fraudulent claims to Medicare or Medicaid. Successful whistleblowers may receive a percentage of the government's recovery.

State Consumer Protection Laws and Medical Billing

In addition to federal protections, most states have consumer protection statutes — often called "unfair and deceptive acts and practices" (UDAP) laws — that may apply to medical billing abuses. Some states have enacted specific medical billing transparency laws requiring providers to disclose prices, provide itemized statements, and offer financial assistance programs before pursuing collections.

State laws vary significantly in their applicability to healthcare billing. In some states, UDAP laws broadly cover healthcare providers; in others, healthcare is partially or fully exempt. An attorney familiar with your state's consumer protection framework can advise on what state law remedies may be available in addition to federal protections.

Practical Steps for Resolving Medical Billing Disputes

Most medical billing disputes can be resolved without litigation. The following steps, taken in order, provide the strongest foundation for resolving disputes and preserving legal options:

1. Request an itemized bill. You have the right to a detailed statement showing every charge, procedure code, and diagnosis code. An itemized bill is essential for identifying errors.
2. Compare the bill to your medical records. Request copies of your medical records for the visit or procedure in question. Compare what was documented in the records to what was billed. Look for services billed but not documented, duplicate charges, and coding that does not match the documented level of service.
3. Contact the billing department in writing. Clearly identify the specific charges you dispute, explain why you believe they are incorrect, and request a review. Keep a copy of all correspondence.
4. File an insurance appeal if applicable. If the dispute involves an insurance claim denial, follow the internal and external appeal process described above.
5. File regulatory complaints. If the provider does not resolve the dispute, file complaints with the appropriate agencies: your state insurance department for insured claims, CMS for No Surprises Act violations, or your state attorney general for consumer protection violations.
6. Consult a patient advocate or attorney. For significant disputes, a patient billing advocate or healthcare attorney can evaluate your options and, if appropriate, pursue legal remedies including litigation.

Negotiating Medical Bills

Even when a medical bill is technically correct, you may be able to negotiate the amount. Many hospitals and large provider groups have financial assistance programs (sometimes called "charity care" programs) for patients who meet income eligibility requirements. Non-profit hospitals are required by the ACA to have financial assistance policies and to make reasonable efforts to inform patients about them before pursuing extraordinary collection actions.

For self-pay patients, providers may offer a cash-pay discount or be willing to negotiate a reduced amount, particularly if the alternative is a lengthy collections process. Payment plans are another common option — many providers will agree to interest-free monthly payments rather than sending the account to collections. Any negotiated agreement should be documented in writing before you make payment.