Pre-Tax Flex Spending Acct & Hospital Bill

[Anon-e-Mouse]

Jurisdiction

Wisconsin

I was in the hospital with a sudden & unexpected severe bacterial illness (not Covid) from December 21-30.

I have health insurance & I have a flex spending account for pre-tax savings to cover things like health insurance deductibles, co-insurance, co-pays, etc.

I have $1500 in my flex spending account (MY money, that I put there via payroll deductions) which is going to disappear into thin air if I don't use it by the end of the year (the disadvantage of those pre-tax savings accounts). I have 90 days to submit bills, so roughly the end of March. If a medical bill for 2021 isn't submitted by then, my savings disappears into thin air and I can't use it to pay the bill in question.

Problem is, I asked the hospital when I might expect to receive a bill from them, and they said not until May at least. They're overwhelmed & short staffed. I explained that I needed to submit their bill to my flex spending account by the end of March. The person I was talking to from the billing department of the hospital just laughed & said, "Not gonna happen."

Is there anything I can do to make the hospital send me a bill soon enough to use MY OWN MONEY that I SAVED for this very purpose to pay my share of this hospital bill, or am I screwed because the hospital can't bill me until it's too late?

Like, I know this sounds dumb, but can I take the hospital to small claims court to force them to send me a bill before then end of March?

 

[adjusterjack]

Like, I know this sounds dumb, but can I take the hospital to small claims court to force them to send me a bill before then end of March?

No. You'll only waste your money. The judge will toss it in a heartbeat.

Here are some thoughts.

The hospital is likely to bill your insurance first then wait to get paid before billing you for the balance. They like to get the big piece as quickly as possible.

Check with your medical insurance frequently. An EOB (explanation of benefits) will tell you how much is billed and how much you might owe. Your insurance may be able to provide you with a copy of the actual bill. You should be able to pay the balance without having received your own bill.

It's also possible that you had services that will be billed by someone other than the hospital. A specialist or other doctor may not be part of the hospital and may bill separately. There may be other services not billed by the hospital. Maybe from your own doctor if your doctor attended. You may be able to get those bills sooner or also from your insurance.

Read the section on FSAs (Pages 16 and 17) of IRS publication 969, specifically Page 17 "Balance in FSA." See if your employer has elected either of the first two options. It would be in your plan's terms and conditions.

2020 Publication 969 (irs.gov)

Also read Recent Developments

About Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans | Internal Revenue Service (irs.gov)

 

[cbg]

How do you submit your flexible spending claims? Do you submit receipts on a claim form, or do you have a debit card?

i understand that you have 90 days to submit your claims. Does your employer offer a two and a half month grace period (you can incur claims for 2021 up till March 15, 2022)?

Have you enrolled in an FSA for 2022?

I'm trying to think of work arounds for you.

 

[Anon-e-Mouse]

Yes to all of those, i.e.,
Yes I can submit receipts on a claim form, and also
Yes, I have a debit card.

Yes/no to the grace period ... there is a grace period for SUBMITTING claims incurred before Dec 31, but it has to be for medical expenses before 12/31.

Also to make things more complicated, my employer changed which company processes our claims on January 1. I have pages & pages of materials on that which I haven't even read yet.

And yes, I did enroll in a FSA for 2022, but had to do that back in October & it's too late to change it now. I would have enrolled for a higher amount in my 2022 FSA if I'd known this was going to happen. Never had anything remotely like it before, didn't even know it was possible really.

 

[cbg]

Okay, thank you. FSA's are highly regulated by law, and a lot of the restrictions on them are set by law rather than your employer. Not all of them, but many. Do you have an idea how much money you'll end up owing the hospital? Just a rough estimate will do.

 

[Redemptionman]

I can make a suggestion after dealing with this, if you have the ability to pay the hospital bill online and have the account number to do that then why not just make a balance payment to them before your FSA dollars expire. This will carry a credit balance with the hospital but once they bill it most of the charges or the FSA balance will be cleared.

if this makes sense?

 

[Anon-e-Mouse]

I honestly have NO CLUE but I'm guessing it will be between $5,000 and $15,000 (just for the hospital, and just in 2021). I have a 10% co-pay on everything, capped at $2,500 per year, so I'm sure I'll hit that, and then I still have "co-insurance" payments after that, if my insurance company decides it doesn't want to pay the full amount.

Probably more bills in 2022 too, because I'm still having 'Hospital at Home" people coming in teaching me how to give myself my own IV antibiotic infusions and clean & disinfect the IV equipment.

And that doesn't count all the "out-of-network" people who looked at my test results in the hospital, etc., who will probably send their own bills.

Ugh. Happy New Year!

 

[Anon-e-Mouse]

I can make a suggestion after dealing with this, if you have the ability to pay the hospital bill online and have the account number to do that then why not just make a balance payment to them before your FSA dollars expire. This will carry a credit balance with the hospital but once they bill it most of the charges or the FSA balance will be cleared.

if this makes sense?

It does make sense if it will work. I think the debit card has a very low maximum on it, and anything else I need to pay with my own funds and then submit for reimbursement.

 

[Redemptionman]

It does make sense if it will work. I think the debit card has a very low maximum on it, and anything else I need to pay with my own funds and then submit for reimbursement.

really, that is different. If it has a CC logo on it (MC) then why would it not take? I have never heard of that most plans will allow you to either use the debit card or submit reimbursements online for direct deposit. The only thing that is not allowable is to pay a bill from the previous year with this years FSA funds.

 

[cbg]

FYI, I administer FSA and health insurance plans for a living.

This may seem obvious but if you have $1500 in your 2021 FSA, then $1500 is all you can apply to your 2021 bills is $1500. You can apply it to the hospital bill, to the doctor's bill, the radiologist's bill, or whatever other related bill you want, but the limit you can use from the FSA is $1500.

Have you talked to any of the specific providers, not the hospital but the specialist providers themselves, who might be willing to let you pay them directly?

 

[adjusterjack]

And that doesn't count all the "out-of-network" people who looked at my test results in the hospital, etc., who will probably send their own bills.

Call them and see if they billed your insurance. If yes, ask for copies.

 

[Anon-e-Mouse]

Thanks everyone. Clearly I have more homework to do here.

I was just thinking that if I wind up having to pay, e.g., $15,000 or $30,000 or $1,000,000 for bills not covered by my insurance, I'd rather not throw away $1,500 and then pay whatever the total amount is after throwing away $1,500. I'd rather be able to apply the $1,500 to the total bill, whatever it is.

I'm sure I fell short on exercising conscientious personal responsibility while I was in a feverish haze fighting off a bacterial blood infection with sepsis.

I remember signing things which I had no clue what they said, but I think they were agreeing to personally guarantee payment for various medical procedures. These "signings" happened NOT at the conclusion of a conversation with somebody explaining what my choices were, but rather after I was prepped and ready and wheeled down the hall on a gurney and laying at the entrance to some fancy machine, somebody would hand me an electronic clipboard (while I was laying down, often already mentally foggy from anti-anxiety and pain medications) with an electronic pen & say, "Sign here." I always signed and I have no clue whatsoever I obligated myself to. I guess I'll find out.

NOT trying to get out of paying whatever I owe. If I agreed to it then I owe it. Just trying not to throw away money that could be applied to the final amount owed.

It doesn't escape me that the new Federal "no medical surprises" law took effect days after I left the hospital, but unfortunately doesn't apply to the time while I was in it.

 

[cbg]

I don't think anyone has suggested that you did anything wrong, or that you're trying to get out of paying what you owe. Quite the opposite; we're trying to help you find ways NOT to lose the $1500 in your FSA account. Some of what you posted made me wonder if you fully understood how it works, and I talk to people every working day of my life who don't so I emphasized a few points. None of this is your fault and we all know that. It's just bad timing.

 

[Anon-e-Mouse]

Okay, thank you. FSA's are highly regulated by law, and a lot of the restrictions on them are set by law rather than your employer. Not all of them, but many. Do you have an idea how much money you'll end up owing the hospital? Just a rough estimate will do.

Okay, I found information listed under my hospital account that says the hospital billed the insurance company for $64,000 (plus change) and the insurance company has only agreed to pay $47,000 (plus change) so I could potentially end up owing the hospital $17,000 (plus change) PLUS whatever any out-of-network doctors, radiologists, etc. decide to bill me for. It doesn't itemize what the insurance company isn't paying for (yet) but it does sort of itemize the amounts it billed the insurance for.

It said I was in the ICU (Level B). I was never in the ICU, that was full of Covid patients. But they did put me on a non-Covid floor with my room right across from the nursing station when I first was admitted to the hospital. When I started getting better they moved me down the hall, further away from the nursing station. Is it possible that being close to the nursing station counts as being in the ICU (Level B)?

Also -- since I was just working on my 2021 income taxes (state & fed) if I do end up owing $17,000 or more, that would be above the amount of medical bills that would make it more advantageous to itemize rather than taking the standard deduction. Would I count that on my income tax returns as medical bills in the 2021 tax year, or not until 2022 or whenever I actually receive those bills? I'm guessing that out-of-network doctor bills could possibly double the amount that I'm personally responsible for paying.

Believe it or not, that is almost a relief to me. If I can take out a loan for that amount I could actually pay it off over time ... I've already paid off student loans that were more than that much, so I know it is possible. I guess my worst fear was of having to file bankruptcy. I work in a financial type of job and my employer does credit checks on people in my work unit and doesn't allow people with a bankruptcy on their credit report to work in my type of job.

 

[Zigner]

I don't know if this will help at all, but here is some info put out by the state:

Coping with Medical Bills and Debt

 

[Redemptionman]

Does your insurance policy have a MAX out of pocket? I have heard of 80/20 billing but most all these CDHP have a max out of pocket that you are not responsible for.

 

[Anon-e-Mouse]

Does your insurance policy have a MAX out of pocket? I have heard of 80/20 billing but most all these CDHP have a max out of pocket that you are not responsible for.

Thanks. I have to sit down and read my employer's health insurance policy to figure out what it does and doesn't cover. It does have a Max out-of-pocket but I'm not sure whether that also includes the co-insurance (I always have to pay 10% of every medical bill out-of-pocket with a couple of exceptions) and whether or not that includes bills from out-of-plan doctors who saw me in the hospital.

 

[cbg]

It would be unusual if the OOP Maximum did NOT include the co-insurance. I'm not saying it can't happen, but it would be an exception to the general rule.

You'll probably find that there is a separate OOP maximum for in- and out-of-network facilities.

 

[Anon-e-Mouse]

New question:

I managed to get some info from the hospital. This is not anything they've sent me yet (i.e., they haven't sent me a bill yet; I got it from their billing department by being a pest). It's a list of the charges they submitted to my health insurance company and what the insurance company has & hasn't paid. The remainder (everything the insurance company hasn't yet paid) is all designated as "Pending," with an asterisk saying that if the insurance doesn't pay it, it will be my personal responsibility.

So here's my question. I want to dispute some of the charges on the list. For example, a $7000 charge for 2 days in the ICU. I was never in the ICU. It was full due to Covid patients. Or a $4000 charge for "surgery" when they gave me a new IV portal. It took 15 minutes, total, & I was chatting with the lady who did it the whole time about how happy I was that she found a good vein on the first try.

Should I wait until I actually get a bill, or an Explanation of Benefits or something to dispute the charges? Or should I dispute them now, as soon as I know they're on the list of charges?

Thanks in advance.

 

[cbg]

I say dispute them now. Personally I think this whole issue of their not being able to bill you is a bunch of BS - if they can give you a list of charges, they can give you a bill. But I don't see any value in waiting.