A Strategy to Avoid Medical Bill Rage
By Ric Edelman
If the medical community wants to help people avoid stress, high blood pressure and heart attacks, all it has to do is stop mailing indecipherable medical bills.
With services, products and procedures reduced to computer code, one keystroke error by a data entry clerk can turn a five dollar charge into a $5,000 fee. And surgery leads to bills from the surgeon, anesthesiologist, radiologist, and others. Result: Consumers find it virtually impossible to verify the accuracy of the charges, yet the bills are likely to contain at least one mistake.
To make matters worse, health insurers often pay their share of the bills without examining the charges. That leaves the chore of verification to you. So, consider the following strategy the next time you receive medical treatment.
The first step, when possible, is to review your medical insurance coverage before you receive treatment. Determine what is not covered, such as pre-existing conditions, elective surgery, or experimental procedures. Are you required to obtain a second opinion? Must you obtain a pre-approval of the charges from the insurance company in order for it to pay its share of your bill?
While receiving services, maintain a treatment diary. Log each treatment (medication, test, service, etc.) as soon as possible after it is received or performed, noting the date, hour, and the name of the person performing the service. If you are unable to do this, ask a friend or family member to do it for you.
The first piece of mail you’re likely to receive is an explanation of benefits from your insurance company, often with the message, “This is not a bill.” It will provide details of the charges, showing what your insurance should pay and what you will owe. Review the statement carefully, and call the insurance company if you don’t understand some of the charges, or if the insurance reimbursement doesn’t appear correct.
Soon, you'll start to receive bills from the hospital and related parties. Often these bills lump charges together, making them difficult or impossible to evaluate. If a bill shows only a summary, call the issuer to request an itemized statement. Most states require providers to give you an itemized bill upon request.
Keep all your bills together, and review them soon after they arrive. (If you delay payment, your medical provider may refer your account to a collection agency and credit bureaus.) When you are ready to pay bills, find your treatment diary plus the explanation of benefits provided by your medical insurer. It’ll take some effort, but you should be able to match the charges on the invoices with your treatment diary.
While deciphering the charges, watch for these common billing mistakes:
- Duplicate billing: Does the same charge for services, medicines, and supplies appear more than once?
- Time in the operating room: Compare this charge with the time the anesthesiologist charges you. Don’t see the time on any bills? Request that information.
- Cancelled work: Were any tests, treatments, or medications ordered but not performed?
- Coding error: It’s common, especially with extensive bills, to find miscoded charges.
- Incorrect charges: You may have been charged for a private hospital room, even though your room was semi-private. Perhaps you were charged for a brand name drug but a generic was administered. Or maybe you were charged for five days in the hospital, even though you were there only four.
If you conclude that dealing with your medical invoices is even more complicated than completing your tax return, consider hiring a professional to review your bill, identify errors, and negotiate lower charges for you. Some firms charge clients by the hour; others work on a contingency basis, keeping a percentage of what they save you. So before working with such a professional, make sure you understand how they get paid. To find such professionals, search on the Internet for “hospital bill review.”
If all else fails, contact your state’s attorney general’s health care-fraud division; find yours at www.naag.org. Chances are medical bills are never going to become patient-friendly, so know the steps you need to take to make sure you don’t pay more than what you actually owe.
Originally published in Inside Personal Finance September 2004