When medical bills go bad: Fixing costly insurance errors (2024)

Each year, the American Medical Association issues its health insurer report card, which reports on the costs and efficiency of health care billing. In 2013, they found that commercial health insurers made mistakes on 7.1% of submitted claims and denied coverage on another 1.8%. The numbers have been improving over time, but they still represent huge costs and headaches for all involved. The AMA analyzes billing from a physician’s perspective. Hospital billing is even more complicated. Sometimes, it seems like no one knows what anything in health care is supposed to cost and who is supposed to pay it.

Many people hope that one of the results of Obamacare will be simpler billing because health care plans will be more standardized. For example, the AMA study shows that Medicare is the most accurate of all insurers, with 98.1% of all claims being accurate. In the meantime, we all have to wade through the complex paperwork that goes with even simple procedures.

The American Academy of Family Physicians has some good information on understanding medical bills. As you read through them, look for errors. Typical problems on bills from providers include double-billing for a single procedure, billing for treatment that was not provided or using the wrong code for a procedure. On the insurance company side, problems include considering an in-network provider as out-of-network, not covering a treatment that should be covered under the plan, or not crediting spending toward the deductible.

Many people assume that if the Explanation of Benefits says you own money toward a medical bill that you should pay it. But many of those forms are often wrong, so it’s important to know what your policy covers and where your responsibilities lie. You can’t depend on the insurance company to get it right.

Health insurance is so complex that many of these problems are due to simple human error, but some are made more or less intentionally by a provider trying to receive more money or an insurance company trying to pay out less. Once you spot a problem, here are some tips for getting it fixed.

Figure out who made the mistake: With many bills, there is a doctor, there is another provider such as a hospital or imaging center, and there is the insurance company. Any one of these parties may screw up, honestly or in an attempt to game the system. If the doctor’s office staff made the mistake, call them before you call the insurance company.

Do research on the condition being treated: A few years ago, one of my family members was diagnosed with a heart condition that is usually genetic. His doctor recommended that his relatives be tested. My doctor agreed and ordered a workup for me. The insurance company rejected the claim. I made the case that it should be covered, citing guidelines from the National Institutes of Health that recommend testing for close relatives of people with this condition, and the insurance company covered the tests. Make sure you use a recognized medical authority as backup; an offhand comment someone made on a message board won’t convince the insurance company.

Stay calm: This is the hard one. How can anyone stay calm when calling the insurance company to find out why a claim was denied, only to learn that the insurance company doesn’t know why it is denying the claim? The sad reality is that it is in the insurance company’s interest to be difficult. The harder it is for you to press your case, the more likely it is that it won’t have to pay. If you can stay calm on the phone, you may have an easier time. Before you call, write out the facts so that you know what you want to say.

Use social media: I recently had a problem with a prescription claim that was being denied, and the pharmacy could not figure out why. I called the insurance company, and the person I talked to wasn’t sure why the claim was being rejected, either – she suggested that I call the doctor. I put something on Twitter about how annoyed I was, and in no time, someone from the insurance company’s social media team responded. I finally received an explanation. It’s sad that insurance companies care about customer service only when someone complains publicly, but at least they will pay attention.

Have someone else do it: The worst part about these problems is that they crop up when you or someone you love is seriously ill. You get to worry about how you will deal with the bills on top of everything else that is happening. That’s why this may be a good task to farm out to an organized and patient friend or relative who wants to know how to help your family through a difficult time. Your helper may not be able to call the providers or insurance companies directly because of confidentiality issues, but he or she may be able to pinpoint problems, do the research and outline your phone call. An alternative is to hire a medical billing resolution firm to help, for a fee. There are several services out there; if you need referral, talk to a friend who has been through this, a patient support group or your doctor’s office.