• Medical Billing Errors

    Note: This post originally appeared on The Finance Buff and has been cited by the Carnival of Personal Finance.

    In the past five years I estimate I’ve found nearly $2,000 worth of errors in my medical bills. It isn’t that my family uses a lot of health care (we don’t) or that we see unscrupulous providers (we don’t). It is just that I am aware that there are a lot of medical billing errors so I look for them, and I find them. Last month I found one. I questioned a $680 charge on a medical bill and followed the trail back to the source of the error. What I found amazed me: a nearly $1,000,000 hospital billing mistake!

    Health care is expensive enough without paying for services you didn’t receive or shouldn’t have been given. Medical billing errors are so common that everyone is likely to receive many erroneous bills in a lifetime. As reported by ABC News and elsewhere, medical bill error rates may be as high as 80%. Yet ordinary people are much less likely to find them. The Washington Post reported that in a survey of 11,000 people Consumer Reports found that only 5% of them had spotted a medical billing error. There are a lot of errors. Most people pay their bills without noticing them.

    As I said, I am very careful with my medical bills. The first thing I do when I receive a bill is to check that it is consistent with the explanation of benefits (EOB) sent by my health insurance provider. The EOB lists the medical provider, date of service, claim identifier, what was billed to insurance, what the insurance company paid, what costs were disallowed and why, and, finally, what the patient owes. It’s a good idea to keep EOBs until you reconcile them with bills. But if you lose or discard them you can always get copies from your insurance company.

    Checking the EOB is the first step but not always the last. Even when the bill matches the EOB that doesn’t mean it is correct. It only means that the insurance company has verified what you owe given what the medical provider billed. The insurance company is not able to catch all the mistakes that lead up to the bill, like incorrect coding. Every medical procedure has a unique code. If a coding error is made, the corresponding bill will be wrong.

    It is up to the patient to catch those mistakes. It isn’t always easy because patients don’t know the codes and the codes aren’t on the bill. You have to be persistent when you suspect an error and learn how your care was coded and how those codes correspond to charges. It can take a little time, but it can save you hundreds or thousands of dollars.

    Professional organizations, like the Medical Billing Advocates of America, can assist patients in validating medical bills. But they take a cut of the refund, as much as 50%. So if you use such a service you could end up paying a lot just to clean up bills that you didn’t owe.

    When a medical bill I received last month didn’t seem right to me I followed my usual procedure of inquiry. It was for a service provided 1.5 years prior, which itself was odd. Why was the bill so late? What also caught my attention was that the bill was sent to my old address even though I hadn’t lived there for several years. So, even without looking at the amount I was suspicious. Not surprisingly, the amount, $680, didn’t make any sense to me. I did not understand what I was being billed for. I never pay a bill until I understand it.

    My first call was to my insurance company. They validated the amount against the EOB. As I said, that means very little, but it is a good first step. Then I called the provider of the service and asked for an itemized bill, one that indicated in detail each procedure and service included in that $680 bill. I told them not to expect payment until I verified everything.

    The itemized bill seemed okay except for one entry that stood out. It was for a service that cost over $3,000, most of which the insurance company had already paid. My liability was the $680. My neighbor happens to be a physician so I showed her the item in question (I could have easily called my doctor instead). She said that the service should only be rendered if the patient has a specific disease. She said there was no way a patient could have that disease and not know it. I didn’t have it.

    This was the clincher. There was no way that I should be on the hook for any amount of that $3,000 service. It was either given in error or my care was miscoded, leading to an erroneous billing. Either way it is a medical provider error and not my responsibility.

    When I brought this to the attention of the provider they did some checking. They discovered that I was not the only one who had been billed in error for this procedure. The error was traced to a computer glitch that had caused erroneous bills to be sent to patients for three years. I estimate that the provider saw on the order of 100 patients per year who might have triggered the computer glitch. At just over $3,000 per error, over a three year period this amounts to about $1,000,000 in billing errors. Most of that would have been paid by insurance companies. But some of it was paid by patients like me.

    Apparently no other patient had questioned their bill; everyone had just paid it. When I finally reported a problem the source of the error was discovered. I saved myself, and many others, $680, not to mention all those insurance payments that we all pay for through premiums.

    In total the time it took me to challenge the bill was one hour, to save myself $680. A penny saved is a penny earned. I don’t pass up that kind of after-tax wage rate. You shouldn’t either.

    • well done.

    • Wow… just wow. Good for you!! I hate the medical world.

    • Your right, we need to go over our medical bills very well to ensure that we havn’t been billed for something twoce or get billed for a precedure that we did not even go through.

    • Oh joy! Just what we need — another for-fee “service” (Billing Advocates) to compensate for a broken system (The medical coverage quagmire).

    • Contrarian, why are you against billing advocates? Most have years of experience within the medical field and can help those don’t know where to turn. If the medical system isn’t the way it is, there would be need for health care advocates.

    • Kris, did I say I was against billing advocates? No, I said I was against the need for them. I agree that even if US Health Care gets “fixed”, there may still be need for health care advocates. I would welcome some help, even for a fee, to advise me about using an equitable and fairly-distributed health care system provided by my taxes and not subject to whether my employer chooses to keep me on for another year. But to pay good money simply to have bills examined for minutiae that I shouldn’t have to worry about? Waste!

    • My employer switched health insurance companies in April of 2012. I remember specifically providing my health care provider with the new information and remember the girl who took my card making a photo copy of said card for their records. I went to the doctor in July of 2012 and was diagnosed with bronchitis. The doctor came to the conclusion after taking a chest x-ray and blood test. I just received a bill in the mail over six months later for the entire amount ($457), citing that it had “exceeded billing limit”. I called my health insurance provider to inquire about if or why the claim was denied, or if they even recieved it. I was told they had recieved it in November of 2012, after a 90 day period was past due, therefore they denied the claim. Upon calling the health care provider and speaking with the billing dept., I was told that I had failed to provide the “new” insurance information. I argued, but they insist they had no record of me giving the new information. The problem is…I didn’t video the employee making a photo copy and I can’t even recall the EXACT date I provided the new card, but I know I didn’t dream this. After arguing, the health care provider insisted it is my burden to prove that I provided the new information, and in the meantime the insurance is insisting that they are not going to pay the claim, and that I am not responsible for the bill due to the provider failing to file in a timely manner. That sounds great, but the health care provider is now refusing to see me any longer and informed me I will be forwarded to a collection agency and a negative report will be filed with the credit bureaus. If I didn’t live paycheck to paycheck and can barely afford my electicity bill, I would just pay the 457 to avoid controversy, but I just can’t. Does anyone have any realistic advice for me? Is there anything under medical malpractice or any other type of attorneys that would be willing to help me out? I am stressed out more than anyone knows and I haven’t done anything wrong! I pay out the nose every month for healthcare insurance and no one seems to want to help me in any way. Any suggestions would be appreciated.

      • Is there a civil lawyer, or one who is versed in medical malpractice, where you live? Get a copy of that letter sent to you by the insurance company, and in a separate, certified letter to the health care provider demand that they search for the document in or around the date that you determine you provided them with the accurate insurance information. The provider should give you all documentation related to your treatment. And in the meantime, contact the Human Resources department at your workplace and explain the dilemma. Maybe they can be of assistance to you. And check the bill for errors! Best of luck.