personal-finance

How to handle a bad charge on a medical bill

July 3, 2012 at 1:03 PM ET

She knew the bill had to be the result of an error. But unlike most consumers who open a medical bill sent due to a mistake, she knew where to look and what to do. Dailey, 43, runs a medical billing company in Toms River, New Jersey, and she was able to see quickly that the explanation of benefits from her insurer showed the nebulizer treatment she received to help her overcome the attack was rejected. Why? Her diagnosis was incorrectly listed as "anxiety" instead of "asthma."

She reported the error to the insurance company, physician and hospital and was able to get the diagnosis code corrected. And the costs -- about $1,500 in all -- were then covered.

Medical billing is rife with errors like this. A recent study by the American Medical Association found that while billing accuracy has improved, one in 10 bills paid by private health insurance have mistakes. And with many more Americans headed toward insurance coverage in 2014 when many of the main provisions of the Affordable Care Act take effect, that just increases the possibility of error.

All involved want to minimize billing mistakes, says Dr. Kaveh Safavi, managing director of the consultancy Accenture's North American health industry practice, but they still occur because from the medical side, it costs money to correct errors.

So, what's a consumer to do? "You should really scrutinize your bills and ask questions," says Dailey.

It isn't easy or simple, but medical billing experts, including Joshua Greenberg, chairman and president of HealthCPA -- a healthcare finance consumer advocacy firm -- say consumers need to understand their ever-changing insurance coverage.

Here are some suggestions they have for preventing mistakes and spotting them when they do happen:

  1. Be sure your provider has accurate, up-to-date information on you, Safavi says. A mistake with something as simple as a middle initial or date of birth can lead to all sorts of billing problems. If you're admitted to a hospital, the same issues can multiply -- with so many separate bills being generated from a single stay -- so patient advocates recommend you try to get a friend or family member to help check paperwork while you're being treated. 
  2. Understand your insurance coverage. Knowing your deductibles and co-pays -- things you should check before you receive treatment (if possible) -- will help you spot when something might be amiss, according to the Healthcare Billing & Management Association. For instance, your insurance might cover 80 percent of the "usual and customary charges" for an out-of-network visit. That isn't going to be 80 percent of the total bill if the provider charges more than that industry standard, Safavi notes. 
  3. Keep track of what services you have received and what you've paid and keep the records, says Greenberg. Bills can come months later and it will be difficult to rely on your memory. 
  4. When you receive an "Explanation of Benefits" form from your insurer, don't just file it or toss it in the trash. Many in the industry, including Greenberg, note the importance of that document since it explains what is being paid for and what isn't. If it isn't being paid, that's the main opportunity to find out why. 
  5. Don't just pay a bill because you received one. Be sure that what's on it are items that you or your insurance company haven't already paid, Dailey says. Use your explanation of benefits to check against bills you might receive. Also, note that some medical practices will send out statements that look like bills prior to any insurance payments being applied, Safavi notes. 

In order to resolve errors, the key is to act quickly, those in the industry say. Bring the mistake to the attention of the hospital - or, if you receive multiple bills from multiple providers - contact all of them. A phone number for the billing department will typically be on the bill if there is an issue to be raised, Dailey says. Having documentation available can make a big difference, says Medical Bill & Claim Resolution co-founder Sunni Patterson. It will allow you to demonstrate that you've already paid, were charged twice or received a bill that you shouldn't have.

In addition, there are a growing number of companies like HealthCPA and Medical Bill & Claim Resolution that offer services to consumers to help them resolve medical payment issues. And there are other, newer entries like Simplee, which offers a free online platform where consumers can have all of their medical bills and insurance payments collected online and allow software to try to discover mistakes for them.

When you appeal a bill or are told that a problem is being corrected, follow up to be sure that it has, HealthCPA suggests. And whenever you receive a medical billing notice or benefits explanation, ask about anything you don't understand. "Patients really need to get involved and they don't," says Dailey.

TOP