Medical Billing Disputes and Your Legal Rights

Did you know that about 100 million Americans owe over $220 billion in medical debt? This is largely due to confusing bills, errors, and aggressive collections by third-party revenue cycle management firms under FDCPA regulations.

Complex codes and opaque billing often lead to frustration, unexpected costs, and medical billing disputes. Federal laws like the No Surprises Act (NSA) now give patients clear protections against surprise bills and unfair charges. These include requirements for Good Faith Estimates (GFE), options for Independent Dispute Resolution (IDR), and formal Patient-Provider Dispute Resolution (PPDR) processes. 

Understanding your rights, including how to spot errors like upcoding, unbundling, or phantom billing, empowers you to challenge errors, protect your credit, and demand transparency. 

What Causes Medical Billing Disputes & What Federal Protections Exist

Medical billing disputes often stem from a mix of billing errors, insurance issues, and communication gaps.  Understanding these causes is key to knowing your legal protections.”

Common Triggers of Billing Disputes

Medical billing disputes often arise from:

• Upcoding: billing for a more complex service than was performed
• Unbundling: splitting services to increase total cost
• Balance Billing: charging patients the “gap” amount not covered by insurance
• Duplicate Billing: billing twice for the same service
• Phantom Billing: billing for services not rendered
• Incorrect CPT Codes or ICD‑10 Diagnosis Mismatch: coding errors leading to inflated charges

These errors can lead patients to question legitimacy, and sometimes spur legal disputes if charges are unfair or unlawful, as per the Consumer Financial Protection Bureau.

Key Legal & Regulatory Frameworks

Federal laws and regulations that protect patients include:

• No Surprises Act (NSA): Protects against surprise out‑of‑network bills and enables dispute processes.
• Good Faith Estimate (GFE): Requires providers to give cost estimates to uninsured/self‑pay patients.
• Independent Dispute Resolution (IDR): For certain out‑of‑network insurer-provider payment disputes. 
• Fair Debt Collection Practices Act (FDCPA): Governs how debts can be collected and prevents unfair collection practices. 
• ERISA (Employee Retirement Income Security Act): Governs appeals for employer‑based health plans.
• Section 1557 (ACA Non‑discrimination): Protects against discrimination in care and billing.
• Statute of Limitations on Medical Debt & Medical Debt Transparency Laws: Vary by state, but can limit how long providers may pursue unpaid bills.
• Charity Care/Financial Assistance Policy (501(r)): Requires tax‑exempt hospitals to have financial assistance policies.

These laws work together to define when and how you can dispute charges, and they provide various forums to resolve disagreements.

What the No Surprises Act Does

Under the NSA:

• You can’t be balance billed for emergency care or certain services by out‑of‑network providers at in‑network facilities. 
• Providers must inform you of billing protections and your rights. 
• If you’re uninsured/self‑pay and billed at least $400 more than your GFE, you may be eligible to dispute the bill through a PPDR process. 

The goal of the NSA is to reduce surprise bills and give patients a structured way to resolve disputes.

Your Rights to Information

As a patient, you have legal rights, including:

• Right to an Itemized Bill showing each charge, CPT and diagnosis codes, and provider names.
• Right to an Explanation of Benefits (EOB) from your insurer detailing what was billed versus allowed.
• Right to Dispute Any Medical Charge you believe is incorrect or unfair.
• Right to Challenge Billing Errors with Credit Bureaus if a debt is reported inaccurately.
• Right to Pro Bono Legal Aid for Medical Bills if you can demonstrate financial hardship.

These rights help ensure billing transparency and accuracy.

How to Dispute Medical Bills & Protect Your Legal Rights

Here’s a structured process to dispute medical bills and assert your rights confidently.

Step‑by‑Step Dispute Process

Successfully handling medical billing disputes and your legal rights requires the following steps:

1. Review the Itemized Statement

• Compare with your EOB
• Check for duplicate billing, upcoding, unbundling, and phantom charges
• Ensure CPT codes and service dates match your records

2. Compare to Your Good Faith Estimate

For uninsured/self‑pay patients, if your bill is $400 or more above your GFE, you may pursue a formal PPDR dispute with CMS. 

3. Contact Provider Billing Office

Often disputes are resolved informally by:

• Requesting correction of obvious errors
• Asking for charity care or financial assistance
• Negotiating a reduced balance

4. File a Formal Dispute or Appeal

Formal dispute tools are especially powerful when initial negotiation fails.

5. Protect Credit & Deal With Debt Collectors

Under the FDCPA, collectors must:

• Validate debts when asked
• Stop collection until validation
• Avoid harassment or false statements

How to dispute medical debt on a credit report:

• Contact credit bureaus with documentation
• File a dispute under the Fair Credit Reporting Act (FCRA)
• Follow up in writing and keep records

Common Mistakes & How to Avoid Them

• Ignoring EOBs: Never settle bills before reviewing your EOB.
• Missing Statutes of Limitations: Some states limit how long bills can be pursued.
• Not Asking for Financial Assistance: Many hospitals have charity care (501(r)) policies that reduce or eliminate bills if you qualify.
• Failing to Appeal Insurance Denials: Use internal and external appeals under ERISA or plan rules to challenge the denial.

Good documentation and prompt action are key to avoiding mistakes.

In‑Network vs. Out‑of‑Network Impacts

In‑network providers negotiate rates with insurers; out‑of‑network (OON) charges can lead to higher bills. The NSA limits unexpected out‑of‑network billing, but bounds on allowed amounts and coordination of benefits (COB) still matter. Request EOBs early to see what insurers allow versus what is billed.

Bonus Tools for Patients

• Medical billing advocate services can review bills professionally
• Contesting a hospital lien may be possible if a provider placed a lien without proper notice
• Negotiating medical debt settlements can reduce the owed amounts
• State Attorney General medical billing complaint may be filed for systemic issues
• HIPAA Right of Access ensures you can receive records needed for disputes

Resolve Your Medical Bills with Professional Support

If you’re facing medical billing disputes and want help understanding your legal rights, negotiating bills, or resolving surprise charges, professional support can make a huge difference.
Visit Tennessee Billing Services for expert guidance on bill review, dispute resolution, appeals, and advocacy:

Our experienced team helps patients and practices tackle complicated billing issues, from GFE disputes to correcting coding errors, so you can protect your finances and peace of mind.

Frequently Asked Questions

1. What is the difference between IDR and PPDR?

IDR handles payment disputes between providers and insurers (especially out‑of‑network), while PPDR lets uninsured/self‑pay patients challenge bills exceeding their GFE.

2. Can I dispute a bill that has already gone to collections?

Yes, under the FDCPA, you can request validation and dispute inaccuracies; collectors must pause until they verify the debt. 

3. What if my insurer labels a service “not medically necessary”?

You can file an internal appeal followed by an external review if available under your plan. Legal limits like ERISA may apply.

4. Can surprise billing protections apply if I accidentally saw an OON provider?

Yes, the No Surprises Act prevents balance billing in many emergency and facility‑based situations.

5. What should I include in a dispute letter?

Include your bill, EOB, itemized charges, CPT/ICD codes, GFE, and a clear explanation of errors or legal grounds (e.g., balance billing, incorrect CPT codes), plus copies of any supporting docs.