Tuesday, March 5, 2013

Investigate The Hype

The healthcare industry has received quite a bit of unwarranted flack due to recent articles published in the +New York Times and +Time Magazine   basically stating that the reason that healthcare costs are so high is because hospitals are over charging and someone needs to do something about it. Having worked in the medical billing industry for over a decade, and having a written a book for patients based on that experience, I will be the first to say it's obvious that these articles were written by people with very limited sight that don't have a clue how the healthcare business operates. Heck, half the people that work in it don't have a full grasp which is why I wrote my book in the first place! 

The problem with these types of high profile articles that get everyone on the 'legislate the hospitals' bandwagon is that they fill patient's heads with wrong information and cause them to focus somewhere other than the true issues at stake. These articles should be informing the patient about how the healthcare system operates so that they can figure out why they were billed the wrong rate in the first place. In regards to politics should look at why healthcare expenditures are higher than they ever have been.

While I could spend hours arguing the true reasons for high healthcare costs, suffice it to say that instead of holding up a hospital bill and yelling that it's high, maybe someone needs to dig a little further and ask the right questions that obviously these journalists know nothing about.

So what are some of the questions that should have been asked and should be asked by patients themselves?

Does the hospital or provider have a contract with the patient's healthcare insurance? If so, that in itself limits what the provider can bill a patient. Providers sign contracts agreeing that they can collect a certain rate per service. This is called the "Allowed" rate. A provider can charge what they want to but they can only COLLECT from the insurance and the patient what they have agreed upon in the contract.

Most personnel in medical billing do not have a good grasp of what an "Allowed Amount" is. That lack of understanding is one of the top contributors to patients being billed wrong amounts.

Another question to ask is if all the amounts add up? An "Allowed Amount" should always equal charges minus discounts or adjustments, -or- insurance payments and patient responsibility.

It's not at all uncommon for an insurance explanation of benefits (EOB) to not add up. In my experience, this has been due to a software glitch in the insurance company's software system. Another cause is that the insurance company has the provider loaded incorrectly in their provider records.

One simple question to ask is if the insurance EOB matches the provider's bill. Most insurance payment remits are sent electronically. Formatting issues between the insurance company's system and the provider's software can often cause incorrect discounts or patient's balances. Most of the time this type issue is never caught unless the patient calls with a question about their bill.

Another question to ask is if the services were actually done. Due to the high volume of data entry and the pressure of deadlines imposed for charges to be entered, it's not uncommon for typos to occur on a frequent basis. Everything in healthcare is done by numbers. It's easy for numbers to be transposed and when that happens, wrong codes are billed or charges are put on the wrong patient's accounts. When software incorporates logic that links family accounts or links guarantors with patients and the chances double.

Software system glitches, typos and human errors are the main contributor to erroneous healthcare bills that are higher than they should be. These issues can cause a patient to be billed $500.00 when they should have been billed $200.00. The truth of the matter is that these errors often are undiscovered due to the sheer volume of data entry that is involved and the lack of personnel to do audits. An even larger truth is patients pay them without question the majority of the time.

Instead of buying into the hype that providers are evil and are just over charging to make a high salary, dig a little deeper and verify what you're being billed first. Remember that errors occur, people may not understand how your insurance works, and sometimes a lot of questions need to be asked to find out what is correct.