Errors on medical bills are a more significant problem than you might think. Experts say as many as 80% of medical bills in the U.S. contain errors, according to Derek Fitteron, CEO of Medical Cost Advocate, a medical billing review and negotiation firm focused on helping employees navigate the complexity of medical billing. For 25% to 30% of those bills, the error is a significant amount. In fact, 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 care, complex medical procedures, care delivered by a medical specialist and care delivered by providers who are outside the employee’s health insurance provider network.
A number of factors contribute to the high incidence of errors on medical bills. One key factor is the complexity of the coding system that healthcare providers use to classify diagnoses, symptoms and procedures performed, known as ICD-10-CM (International Classification of Diseases, Tenth Revision, Clinical Modification). The complexity of the coding system can lead to a variety of errors, from simple mistakes like charging for an exam of both arms when only one was examined to coding for a more expensive procedure or type of hospital care than what was provided.
How medical billing errors impact employers and employees
For employees and employers who self-insure, the obvious impact of medical billing errors is cost. And while in-network care is covered by insurance, as the average health plan deductible gets higher and higher and employees pay more to reach their deductible, they also bear more of the financial burden caused by these errors.
While employees can try to manage medical billing errors on their own by looking for red flags like rejected insurance claims, discrepancies between the insurer’s explanation of benefits and the provider’s balance bill, and checking the documentation they receive from their provider to make sure it accurately reflects the services received before they leave the physician’s office, the process can be time-consuming and confusing. When employees have to spend time trying to get errors on their medical bills corrected, they can become more distracted and less productive at work.
Most of the time that employees spend calling healthcare providers and insurers in an effort to correct errors on their medical bills occurs during the working day. For employees, their priorities are their health and the health of their family and their money. Client needs and work responsibilities may drop down that list of priorities when they’re dealing with the stress and frustration of medical bill errors.
What employers should do
To counter that lost productivity, employers can provide employees with support services and tools. Educating employees through seminars, online tutorials, and handouts about the need to check medical bills and how to spot errors can arm them with the knowledge they need to advocate for themselves more efficiently. Another approach is to offer a medical billing error advisory or advocacy service through the organization’s benefits plan. The services provided by these firms can include:
· Answering employee questions about ICD codes and what services are being billed
· Billing review and error identification
· Working on behalf of employees with healthcare providers to get errors corrected
· Negotiating costs for services provided by out of network providers with the goal of lowering the employee’s out of pocket costs
· Researching the charges for non-emergency healthcare services so that employees know how much different providers in their area charge for the same service, which may be factored into their decision about where they choose to receive care
When considering a billing advocate, employers should look for organizations with longevity and a strong professional reputation that can provide data-based reports on the cost savings achieved. It’s also essential to ensure that employees are aware of the availability of the service and know how and when to contact the advocacy firm.
Photo courtesy of: Bloomberg
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