Patient, Heal Thy Bill
It didn’t take long for Pam Brown and Kathleen Cordova to find glaring errors in the bill faxed from a client who recently was discharged from a hospital.
The hospital had charged the man $17 an hour for a pulse meter--57 hours in one day. He also was billed $44 per hour for a ventilator--this time for a 36-hour day. But the mistakes didn’t end with the troubling time warp.
He was charged doubly for a spectrum of pharmaceutical supplies and was billed for a private room, even though he received less-expensive semiprivate accommodations.
Within a few hours, Brown and Cordova had shaved more than $1,100 off the bill. They’re now in the process of investigating an additional $4,500 to $5,000 in suspected overcharges for the same client and the same bill.
Although this overcharge is bigger than the average, it is indicative of a disturbing trend, says Brown, co-owner of Cordova-Brown in La Canada Flintridge.
Since the two started their medical bill-review service last year, they’ve found that their average $10,000 hospital bill contains overcharges ranging from $900 to $1,300. And that experience doesn’t appear to be unusual.
A host of studies conducted both by private companies and the General Accounting Office, the investigative arm of Congress, indicates that errors in hospital bills are relatively common, particularly on large bills that list several procedures and pharmaceutical charges. There are no industrywide statistics on how often errors occur--all the studies have concentrated on just segments of the market--but they all agree on one troubling fact: Billing errors are common and are far more likely to go in favor of the medical provider than the consumer.
The hefty overcharges notwithstanding, they are likely to occur because of honest mistakes, Cordova says.
The maze of paperwork associated with medical care would challenge the most organized providers. Indeed, a key argument made for health maintenance organizations is that there is less billing confusion.
There are many procedural issues that make accurate medical billing difficult.
Typically, a doctor checks a procedure code and scribbles a few notes. The top copy of the bill may be legible, but the carbon copies that are sent to medical billing clerks--who are often off-site subcontractors--frequently are not. If the bill is unclear, the clerk is likely to charge for the more expensive procedure.
With hospital stays, the billing problems multiply for other reasons.
Doctors often order--or authorize--services that aren’t actually received. For instance, a doctor may prescribe medication for pain before leaving the hospital. That allows a nurse to administer drugs when necessary, but if the patient doesn’t need the drug, he or she can turn it down. Nonetheless, the authorization is already on the chart, and a billing clerk may charge for it when it’s not clear whether the patient has received the treatment or service.
And there is a plethora of mysterious code numbers--procedure codes--that spell out just what was done for any given patient. Juxtapose one number and a cancer surgery might be read as cosmetic surgery. The end result: Your insurer denies the claim, Brown says.
“We had one client whose insurer denied her claim for a heart operation, saying it was not a covered service,” Brown notes. “It turns out the hospital has miscoded it. The insurer thought it was a sex-change operation.”
Cordova and Brown are among a handful of entrepreneurs across the country who have launched bill-review businesses that aim to spot and reverse errors in doctor and hospital invoices.
With Cordova-Brown and many similar firms, consumers aren’t charged for the review unless the examination uncovers an overcharging. In that case, the consumer is charged a contingency fee equating to half the savings.
However, because the business is mainly based on contingency fees, many medical-review firms won’t check bills that are for less than several thousand dollars. That doesn’t mean that bills for lesser amounts are always accurate. It simply means there wouldn’t be enough profit for the review team to bother.
No matter how large or small your bill, consumers should make an effort to scrutinize their bills. If you’re going to do it yourself, that requires at a minimum that you read through the entire bill and ask questions when you don’t understand a charge or think there may be a mistake.
Kathy M. Kristof welcomes your comments and suggestions for columns but regrets that she cannot respond individually to letters and phone calls. Write to Personal Finance, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053, or message Kathy.Kristof@latimes.com on the Internet.
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Checking Up on Charges
Here are a few tips on auditing your own hospital bills.
* Be prepared. If you are going in for a nonemergency procedure, you can make your hospital visit far less costly and certainly less confusing by calling your insurer first. Your doctor’s office often can give you an idea of what to expect as well.
Ask for advice on ways to save money. For instance, the insurer might make it clear that it won’t pay for certain extra services, from a private room to an “overnight pack”--sometimes just a toothbrush and pair of slippers.
Since a good portion of the savings will be passed on to your insurer, it’s likely to try to help.
* Study the bill. If it appears out of whack, get a detailed version. Most consumers get only a bill summary, which lumps together a host of charges.
* Check the obvious. The detailed bill may seem overwhelming--it could span 20 to 40 pages--but it’s more manageable if you start by looking for simple things first. For instance, review the dates of your stay. If you’re paying an hourly rate for some medical service, make sure the hourly charges are realistic.
* Review “bundled” services. Many bills include bulk charges for standard supplies that either all hospital patients need--or that all patients in similar circumstances need. Make sure you got those bulk charges or that you are not charged individually for the items.
* Call for help. If you can’t make out your bill but suspect you’ve been overcharged, consider hiring a firm that specializes in reviewing medical bills. Be certain you understand how they are paid: either a flat fee or on a contingency basis. Billing review services are normally listed in the “Medical” section of yellow page directories.
