CNBC: Here’s a Key Way to Prevent Paying More For Your Health Care Than You Should
You know how sometimes when you’re at the grocery store, the cashier accidentally keys in your watermelon as, say, garlic cloves? Or a package of AA batteries falls on the conveyor belt and ends up on your tab? That kind of thing can happen with medical bills.
With health-care costs continuing to rise and consumers increasingly being asked to pay a greater portion of those expenses, there’s a good chance an error will cost you if you don’t catch it.
“Mistakes are rampant,” said Bridget Lipezker, senior vice president of advocacy and transparency at employee-benefits manager DirectPath. “In the complicated world of health-care billing, don’t make the assumption that a medical bill is right.”
Exactly how often errors happen is hard to come by. Research from the American Medical Association shows that 7.1 percent of all claims paid by insurers in 2013 contained a mistake, while patient advocates and other professionals who review medical claims for accuracy put the frequency of billing errors well into the double digits.
At DirectPath, which helps employees and their families at the companies that use its service, at least 50 percent of the claims reviewed on behalf of those workers contain a mistake, Lipezker said.
And then there’s balance billing — the practice of an out-of-network provider billing the patient for the amount not covered by the insurance company, which can result in a surprise bill for thousands of dollars. (More than 20 states have laws protecting consumers from balance billing, according to the Commonwealth Fund.)
Of course, before a person even steps foot in a doctor’s office, hospital or other health-care provider to use their services, they might already be paying thousands of dollars annually for insurance coverage.
For family coverage at an employer-sponsored health plan, the average yearly premium is $19,616, of which workers pay an average $5,547, according to a recent study by the Henry J. Kaiser Family Foundation.
For single coverage at an employer-sponsored health plan, the average annual premium is $6,896, the study found. Workers contribute an average $1,186 toward that cost.
Additionally, more consumers are enrolling in plans that come with a lower premium in exchange for a higher deductible — which is the amount you must pay out of pocket for your covered services before insurance picks up most of the bill.
Among these so-called high-deductible health plans that are employer sponsored, the average deductible is $2,926 for single coverage and $4,104 for family coverage, according to the International Foundation of Employee Benefits Plans. And, of course, copays and other out-of-pocket expenses can add up.
Part of keeping your outlays down means checking every single medical bill you get, Lipezker said.
“Call the billing office and ask them to explain what each of the charges are,” she said. “If an office manager can’t answer, ask to speak to a nurse or technician on staff. It really is the best line of defense.”
If there’s a mistake, it could be as simple as a routine checkup being improperly coded as an urgent-care visit. Or, you could be given the generic form of a medicine and yet charged for the brand name, or you might get charged twice for the same service.
Additionally, always make sure you receive an itemized explanation of what you owe instead of a bottom-line amount, Lipezker said. Also, be sure to check your bills against the explanation of benefits sent by your insurance company.
Errors tend to be more prevalent when you end up in the hospital. Due to the variety of doctors who tend to you and tests or procedures ordered, there can be many different individual providers that end up filing a claim with your insurance company.
The result can be a confusing mess of explanatory paperwork from your insurance company, along with bills from multiple doctors or other providers. Hang on to everything, and don’t be shy about seeking help if you need it.
The first place to turn is your company. Many firms include advocacy services as a benefit for employees who need help making sense of bills or checking for errors and getting them fixed. If your employer has this perk, take advantage of it. If you’re unsure, ask your human resources department.
There also are specialized advocacy firms you can turn to. They typically review bills for free and take a cut of whatever amount they saved you.
The bottom line is to make sure the amount you’re being asked to pay is accurate, Lipezker said.
“You might be pleasantly surprised to find that it’s correct,” she said. “But many times it’s not.
“And the more you dig in and care about what’s on that bill, the more you’ll be able to understand the next time.”
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(Sarah O’Brien reports for CNBC’s personal finance team.)