Next time you get your medical bills, at least don't pay immediately. It's worth checking for errors first.
The wrong accounts for medical bills vary widely. Although the American Medical Association estimated that 7.1% of payment claims in 2013 contained errors, a 2014 Nerdwallet study found that 49% of medical insurance claims contained errors. Groups that review bills on behalf of patients, including healthcare billing advocates and copatients in the United States, put the error rate close to 75% or 80%.
"Don't pay for it until you understand it," says Sara Taylor, health solutions and strategy manager, Aon Hewitt, a welfare administrator.
For some consumers, it is becoming easier and easier to find and correct medical billing problems. A forthcoming Aon-Hewitt survey of 800 large and medium-sized employers found that 45% of employers provided advocacy services to help workers manage their health benefits; 43% of employers considered increasing these services within five years.
"Why" is simple, "Taylor said." The operation of the health care system is complex, confusing and difficult, and people are seeking help. "Providing publicity services helps to reduce overall planning costs and improve employee productivity."
Source: Consumer Health Experience Survey 2016
"Two-thirds of all our interactions are when people raise their hands and say,'I'm going to use the health care system,'" said Tom Spann, chief operating officer of Accolade, a health care portal that serves nearly a million consumers through employee-health partnerships. They want to know how much it will cost. The service also helps users correct bills, resubmit rejected claims and negotiate cash payments.
Usually, billing errors can lead to cash costs that exceed expectations, either due to expenses that should not exist or coding errors that affect insurance companies'processing of claims.
Dr. Liu Davis, author of The Thrifty Patient, said: "Hospitals sometimes charge for things you have never done, medicines you have never received, and services you have never received."
But maybe you shouldn't be charged at all.
Liu said that sometimes suppliers send bills in advance before they receive payment from insurance companies.
In other cases, it may be a "balanced bill," he said, and after your insurance company pays its share, the rest is not allowed to be used by network providers. Some state laws also intervene to protect insured consumers from the cost of emergency services outside the network during their hospital visits (that is, you choose an in-network hospital, but a surgeon or anesthesiologist is not in the network).
This is not just a big bill you have to consider. "Some healthcare providers still spontaneously charge a common fee for preventive care, which is usually fully covered," said Rebecca Palm, co-founder of Copatient. "This is an example of a very small bill that can bring savings opportunities," she said.
Browse problem bills
"If you can get free or cost-effective publicity through an employer or health plan, make it your first stop," Taylor said. "In many cases, the utilization of these projects is very low," she said. Many consumers don't even know they exist.
If that's not an option, "I'll call immediately for a detailed statement," says Candice Butcher, vice president of the American Medical Bill Advocate. She says line-by-line reviews at least give you a sense of accuracy. This may help you remember to undergo surgery or medication, she said.
Calling your insurance company can also help you understand why they handle claims in their way.
For large bills and complex bills, such as hospital visits, you may receive bills from different providers. Consider hiring a billing spokesperson, Liu said.
Usually, billing reviews are free, and services deduct a portion of any cost savings you can make if you succeed. (The MBAA was cut by 25%, the copatients by 35%), he said. Outsourcing processes can also save you time spent correcting bills.
Source: Consumer Health Experience Survey 2016
"Just don't wait too long to pay (or formally disputed) medical expenses," said the butcher. According to a study by the Consumer Financial Protection Agency in 2014, some suppliers acted quickly on outstanding balances, resulting in 20% of consumers having unpaid medical debts in their credit reports. Average amount owed: $579.
Credit expert John Ulzheimer said that the collection of medical debt now has less impact on the latest FICO and VantageScore credit scoring models, and once medical debt is resolved, it is completely ignored. Many lenders have not yet used the new formula.
"These changes don't make sense to anyone applying for a mortgage," he said.
Consumers will be protected more this autumn. As part of the 2015 settlement, the medical debt sent to the collection has a six-month grace period before it is shown in the consumer credit report. The three credit reporting companies will also be required to clear medical debt after the insurance company reports that it has paid or settled. (The amount you pay or settle will be retained in the report.) At present, there is no grace period, any settled medical debt can be retained in your credit report for up to seven years.
Disclosure: Customers of the award include CNBC parent company Comcast.