“Getting overcharged on a medical bill? Won’t happen to me.” Sure it’s easy to ignore, but with eight out of 10 medical bills containing errors (according to Medical Billing Advocates of America), the odds are really stacked against you. You are getting inaccurate bills, and if you haven’t yet, you likely will.
On top of this, hospitals are getting more aggressive and waste little time sending people to collections or filing liens against them for outstanding medical bills. The Federal Reserve reported in December that medical bills account for over half of all debts in collection. If that happens, your credit score could be hurt.
Also, did you know there is a lifetime cap on most insurance plans? It is often limited to $500,000 – $1 million per person, which sounds hefty enough, however continuous treatment in a hospital for several days can pile into hundreds of thousands of dollars, quickly eating through this limit.
To protect your health and your wallet, here are four steps to identify medical billing errors, and three steps to fight them:
Step # 1 Request an “Itemized” Bill
You should never pay the total summary bill. Also, never pay the total bill when you leave the hospital, even if you are told it’s mandatory. Instead, request the itemized bill. In a summary bill, you won’t be able to see if the individual services are really the one you received, nor could you spot duplicates. Always ask for the itemized bill.
If you received the summary bill in the mail, call the hospital or clinic and request to speak with the billing department and request that they send the itemized bill to you. Larger hospitals and clinics often have dedicated staff for accounting and auditing bills, so use them.
If it’s a co-pay or coinsurance that should have already been paid at the time of a doctor’s visit, you may still accidentally get a bill. This happened to me recently for a $30 co-pay, which was paid during that visit yet I later received a bill. Look over your credit card statements or your receipts for transactions paid on the same day of the treatment if you think the bill should have already been settled.
Step # 2 Look for duplicates
Every little item has a different charge, from the tools on the surgical tray, to every screw in a pacemaker. So many people are entering these individual charges within a hospital or clinic, that there are bound to be mistakes…and there are. If your see a charge for a procedure, then see additional charges for the individual items, chances are these are duplicate charges. Now that you have your itemized bill, these are easier to spot.
The most common errors: Bundled items…
Say you get charged for a surgery. Then you get charged for the tray being used for the surgery. You are probably being overbilled. Hospitals are notorious for doing things like this.
Beware of items such as:
- -Toilet paper
If you are charged for these items and also billed for “room and board” or “doctors office visits” fee, then you’re likely being double charged. Call the hospital or clinic to ask what amenities are covered under those vague terms.
Step # 3 Look for Upcharges
Sometimes your hospital or practitioner bills for a more expensive service than was actually performed. These are called upcharges and are often clerical mistakes made from office staff when entering procedure codes. This can often include services that you didn’t receive at all. By contacting your physician, you can confirm if these services were truly the ones performed.
Step # 4 Compare
In addition to the medical bill, you will also get an explanation of benefits (EOB) from your health insurance company, if you have one. Compare the two documents to make sure each has matching charges. If they match, but you believe the bill is too much, then contact the hospital or clinic. If the EOB doesn’t match the bill, then your insurance company may be overcharging you. If you have a co-pay, this will not matter much to you since you are paying a flat fee regardless, but if you have a co-insurance, you are paying a percentage of the services and will want to keep the total cost of care as low as you can.
What To Do About It
Now that you have your checklist of services you identified as being questionable, here are three steps to take that will help save you money.
Step # 1 Request a review
If the error is on the medical bill, a simple call to your doctor or hospital asking to review the bill may clear things up quickly. Among larger clinics or hospitals, this is sometimes called an “internal audit”, and they have in-house auditors who are there to do this, so make use of them.
If you notice different charges on your insurance explanation of benefits (EOB), you should call your insurance company to ask the reason for this difference. It may be an error and easily corrected.
Step # 2 Ask your physician if they ordered the service
Check with your doctor whether the services in question on your bill were indeed requested for you. You can’t be charged for a service that your physician didn’t order…in writing. When your doctor orders treatments or services, they send them directly to the labs or other facilities where your treatment takes place. Often times you will never see this order, so if you are unsure about a treatment, call your physician and ask that they confirm in your medical records.
Step # 3 Challenge health insurance denials
For any case where your health insurance has denied coverage, you should always challenge it. It could be a clerical error, wrong diagnosis code, missing modifiers. At best it will be approved, at worse you will have lost nothing by trying. Calling your insurance company could resolve the issue over the phone. If that doesn’t work, look over your insurance plan to understand the appeals process, including timelines. Request a letter from your physician explaining why it was necessary to use that facility or treatment (e.g. the only hospital with that equipment; the only specialist; etc.). Write a detailed letter of your own as to the reason why you are appealing, any details about the service charge, claims numbers, dates, doctor name, and so on. When you submit your appeal, include both of these letters to your insurance company’s appeals address. I’d recommend photocopying them, and mailing them with some type of confirmation (certified mail or equivalent), as proof you sent it if required in the future. You should also follow up if you don’t hear a response after 30 days.
Alert: Beware of 30-60 day markers
If you are not able to resolve the charges in question by the time the medical bill is due, then you should consider paying the itemized charges you are not challenging. Some hospitals or clinics have 30-60-90 day notices, but it’s best to watch them closely. After 60 days, if things are not resolved, your unpaid bill could be sent to collections, and this could hurt your credit score. If you suspect this of happening, run a credit report to see if your unpaid medical bills show up. If so, contact your credit card company to inform them of the dispute, which often will lead to them reviewing or even correcting the report.
Alert: Beware of “medical” credit cards
These are often promoted through the doctor’s office as a way to pay for pricey procedures up front. The terms are enticing, such as promising no interest for 2 years, however if you miss one payment during this time, it immediately cancels the deferred interest and you often must pay all the accumulated deferred interest up to that point. Ouch. Since the interest rates on these cards are typically higher (around 30 percent in many cases), this can be a hefty amount.
Need More Help?
If you suspect egregious errors or even fraud, then you may want to seek help from a professional reviewer. Patient advocacy groups often have reviewers on hand who are familiar with spotting medical overcharges and are there to help. A couple of good resources are the Patient Advocate Foundation and the Medical Billing Advocates of America, who have professionals on hand to help.
Rebecca Woodcock is an entrepreneur and cofounder of Cake Health, a free online tool for managing your health insurance. You can connect with her on Twitter and Facebook.