Odds are you or someone you know will receive a medical bill in the mail that is accidentally or purposefully incorrect (experts estimate between 40% – 80% of all medical bills contain errors). Consumers pay nearly $68 billion dollars in medical bills they don’t owe every year http://www.kaiserhealthnews.org/daily-reports/2010/april/05/health-care-billing-errors.aspx, with many not questioning the bills because of the trusted/authoritative source (i.e., doctor, hospital, and/or insurance company) that sent them.


Medical bills are the #1 reason for personal bankruptcy in the U.S. 78% of those who filed say they had medical insurance http://www.businessweek.com/bwdaily/dnflash/content/jun2009/db2009064_666715.htm. How could insured Americans be bankrupted by medical costs? Sadly, it’s a lot easier than you might think. One moment you’re a Vice President with a PPO health insurance plan provided by your employer, the next you’re a patient with $80,000 in bills on your coffee table from a variety of doctors and the hospital that your insurer won’t cover and the providers (and their bill collectors) demand you pay.


When a doctor or hospital sends an erroneous bill or attempts to get the consumer to pay before the insurance company has had a chance to remit payment to the provider, it puts the family’s fiscal health in danger. Most individuals don’t realize that even if they indeed owe money, the amount can often be reduced through direct negotiations with the provider(s). Instead, millions of insured Americans take the healthcare provider’s word for it and pay the debt. We quickly accept that those we entrust with our lives wouldn’t mislead us, and dive into what seems to be the logical next step: finding a way to pay. What consumers must realize is that medical overcharging is not a personal affront, but a complex business strategy driven by a desire for financial gain. Further, challenging a bill does not show weakness of character, but a commitment to fair and equitable treatment.


A couple of years ago, I received a call from a woman representing an area hospital’s billing department. My internist whom I hadn’t seen in several months had more recently closed his practice to join the hospital’s clinic. The woman on the phone said I owed the hospital $227 for my visit. I knew that was impossible, as I’d never been to the clinic and my PPO co-pay for office visits was $20.


“You owe $227 for your visit with Doctor [X].” she insisted.


“I think there’s been a mistake. I’ve never visited that clinic.”


She was not going to accept the truth as a viable answer. Her job, after all, was to collect bills from the people on her computer’s list. After speaking at length with her supervisor, I was told my claim would be submitted for internal review. A week later, I received a call from a self-identified “case manager.”


“I’ve got good news! The internal review board ruled in your favor. Your bill was lowered to $112!”


$112 for something that never happened. My professional interest well satisfied and my patience waning, I decided to warn the woman of the far too real consequences of medical billing fraud. I never heard from her or the collection agency again. I let the doctor know what had happened because the tactics used by 3rd party vendor hired by the hospital put his professional reputation in jeopardy.


Often, doctors’ practices, hospital groups, labs/imaging centers enlist 3rd party billing collection companies to see if consumers will pay beyond what they’ve received from the patient and insurance company. If the patient pays, it’s a bonus for the collector and the provider. If not, maybe a series of phone calls or an official looking document will scare the consumer into paying the bill in full. (The person who called me worked for a collection agency, not my doctor or the local hospital).


Consumers owe it to themselves to carefully review and question every medical bill and their insurance policy’s Explanation of Benefits(EOB). If a provider is trying to bill you for more than the insurance covered, demand an itemized bill. Let your insurer know that you’re receiving additional bills from the provider. If you have a PPO and are dealing with an in-network provider, the provider may not be honoring the terms of their provider/insurer contract. If you are insured as part of a group plan through an employer, you can also contact the human resources department to see if they can help find resolution.


In every instance of healthcare, the rule to follow is this: Trust, but verify (every single item on every medical charge you receive).


The perceived monster under your bed is no match for the very real one in your mailbox.