Audit Cases

The Importance of Thoroughly Reviewing Medical Bills

A single visit to a hospital emergency room or the hospital outpatient department can result in a complex array of medical bills covering several services and practitioners. Some medical bills provide minimal information to justify charges while others contain codes/descriptions that make little sense to a layperson.

The complexity of the medical billing maze in healthcare continues to expand. It seems many of the same old things in healthcare are duplicated which in many aspects has not worked very well over the last decade.

While there are varying statistics out there, the Worldmetrics.Org Report 2024, shows medical billing errors account for an estimated $68 billion in unnecessary healthcare costs annually and notes, according to the American Medical Association, up to 25% of healthcare claims contain errors. Others say the prevalence of medical billing errors is estimated that up to 80% have an error in some form. Whether it’s inaccurately submitted patient or insurance information, improper reporting of procedure or diagnosis codes, data entry errors, use of outdated coding/billing information, or the lack of submitting required information on claims, the margin for error is evident. A common theme: these medical billing errors impact all of us.

Inflated Charges Raise Red Flags

A patient was seen and treated for diverticulitis in a California hospital outpatient department. ClaimDOC’s review of the claim identified the hospital charged $13,241 for a complete blood count (CBC) laboratory test (CPT code 85025). The average charge for a CBC laboratory test is $25 to $125. Was this a data entry error by the hospital on this submitted claim? Let us at least hope that is the scenario.

Additional concerns on the claim:

  • The hospital’s egregious charge for a CT scan of the abdomen and pelvis with contrast (CPT code 74177) for $15,401. The hospital’s reported cost for this imaging test was $92.26 — a significantly inflated markup by the hospital.
  • The hospital’s egregious charge for a comprehensive metabolic panel laboratory test (CPT code 80053), $728. The hospital’s reported cost for the lab test was $17.30 — a significantly inflated markup by the hospital.

Another patient was seen and treated by a New Jersey physician in the office/clinic setting for the ablation of a varicose vein in the right leg. The physician billed CPT code 36475 and corresponding charge of $43,500. The average physician charge in New Jersey for CPT code 36475 is $4,100 to $5,140 — a significantly inflated charge by the physician.

Employers partner with ClaimDOC to provide a medical plan with greater cost control and transparency. ClaimDOC’s comprehensive auditing of medical claims ensures providers/suppliers are reimbursed at a fair and reasonable rate while reducing premiums and out-of-pocket expenses to medical plan members.

Questions to Ask About Your Medical Bills

Healthcare consumers need to be routinely engaged and ask questions to confirm received services are reported and billed correctly. Billing mistakes could be the result of data entry errors or even abuse or fraud. Ask yourself the following questions so you can decipher a medical statement prior to paying any medical bill:

  • Do I recognize all charges on the bill?
  • Are the service dates of care correctly billed?
  • Are the services and/or procedures correctly billed?
  • How old is the bill? Most health plans have timely filing deadlines.
  • Are there red flags indicating a potential medical billing scam? Red flags include requests for sensitive information, charges for phony services/services not provided, unfamiliar practitioner names and more.
  • Do I need an itemized bill? Consider requesting a detailed statement if the bill comes with an expensive price tag.
  • Have I and my insurance plan been billed properly? Billed charges may be higher than discussed or expected.
  • Did I get billed for an out-of-network provider? Surprise medical bills or balance billing can occur when a member believes they are receiving care from an in-network provider, although the practitioner or hospital is not part of the network.
  • Can I negotiate payment terms?
  • Do I need help understanding and/or disputing this bill?

The Takeaway

Medical billing is complex and goes through several hands and phases of the revenue cycle prior to bill completion and reimbursement. Medical billing errors and artificially inflated bills are alarmingly common. Importantly, consumers need to scrutinize all medical bills. Abuse and fraud is real — an intent to incorrectly bill healthcare claims to generate increased/improper payment for services.

The incorrect reporting of services, coding/billing errors and egregious charges can complicate matters for patients to understand their healthcare bills and payments, impact the collection of patient balances, build a reputation of providers charging high fees, create burdens for patients having no insurance and a host of others.

When an individual receives a bill for healthcare services appearing questionable/inappropriate, an inquiry to the provider and/or health plan should be made to obtain an explanation of the services, corresponding charges and reimbursement. Erroneous charges and inaccurate medical bills end up costing everyone.

Our goal at ClaimDOC is to use benchmark charges and costs nationally to negotiate fair and ethical payments. Our high-quality and expert review of claims identifies and prevents improper medical claim payments and maximizes long-term cost savings opportunities. Employers turn to us seeking to establish fair reimbursement rates for their plans allowing them to save money and provide richer benefits to their employees. A win-win for everyone.

Background

ClaimDOC’s comprehensive line-by-line review of claims uncovers errors that basic claim repricing and auto-adjudication does not catch, leading to greater savings for health plans and its plan members. Our audit team analyzes all types of healthcare claims for a variety of potential billing concerns including excessive usual and customary charges, duplication of claims, incorrect coding, unbundling of services and numerous others. Our claim review is not intended to impact care decisions or medical practice.