How to Save Money by Catching Errors on Your Medical Bills
Healthcare is expensive. In fact, Americans spent $3.5 trillion on health expenditures in 2016, the most recent year statistics are available for. As more people enroll in high deductible insurance plans, individuals’ out of pocket costs for healthcare are growing significantly. But there’s another factor that may be increasing your healthcare costs—errors on medical bills. Experts says that between 30% and 80% of medical bills contain errors and an audit by credit rating agency Equifax found that for hospital bills totaling $10,000 or more, there was an average error of $1,300.
While errors can occur on any medical bill, they are more common on bills for:
- inpatient hospital care
- complex medical procedures
- care delivered by a medical specialist
- care delivered by providers who are outside your health insurance network
There are a number of reasons for the increasing number of errors on medical bills. The system that doctors, hospitals, and other healthcare providers use to classify diagnoses, symptoms, and procedures performed, known as ICD codes, grew from 24,000 to 155,000 a few years ago. The codes were added so that more specific information could be gathered, but the change also had the unintended consequence of exponentially increasing the potential for the use of incorrect codes on medical bills.
Another contributing factor is the use of healthcare providers outside your insurance network. These providers are not bound by the fees that in-network providers have negotiated with the insurer and also frequently use different billing codes and service descriptions, making billing more subjective. Some don’t use ICD codes at all.
How to spot errors on your medical bills
Whenever you receive healthcare, ask the provider for an itemized bill so you can check it to make sure it matches up with the care you received. Compare that bill with the explanation of benefits (EOB) you receive after your claim is processed by your health insurer. Your EOB will tell you:
- what services your provider billed for
- the dates of service
- how much the provider billed the insurance company
- how much of that amount was not covered by insurance
- how much you owe the provider
When you review your medical bills and EOB, be on the lookout for these common errors:
- Being charged twice for the same service
- Being charged for tests and procedures that were cancelled
- Incorrect personal information, such as a misspelling of your name, wrong address or Social Security number, or wrong insurance ID number, which can result in your insurance claim being denied for care that should have been covered
- Charging separately for services that should have been billed under a single ICD code, for example billing separately for the incision and closure of the incision during a surgical procedure
- Balance billing for in-network care, charges you should not be responsible for because in-network providers agree to accept what the insurance company pays, although you are responsible for meeting your deductible and any copayments required by your insurance plan
- Bills for care that the provider failed to submit to your insurance first
If you do find errors on your medical bills, contact the provider and your insurance company and explain the errors before you pay the bill. If there are a number of significant errors on the bill, arrange to meet with the provider’s billing department to discuss the mistakes. There are also medical billing advocacy firms that can negotiate with providers on your behalf to get the errors corrected. Some employers offer this service as part of their benefits package, but you can also hire an advocate on your own.