The Scope of Medical Billing Errors in America
Medical billing errors are far more common than most people realize. Industry experts estimate that between 30 and 80 percent of medical bills contain errors, and the vast majority of these errors result in overcharges to patients. A single hospital stay can generate hundreds of individual line items, each representing a separate charge that may or may not be accurate. With the complexity of medical coding, the fragmentation of billing across multiple providers and departments, and the pressure on billing staff to process high volumes of claims, mistakes are virtually inevitable.
The financial impact of medical billing errors on patients is staggering. Overcharges can range from small amounts for duplicate supplies to thousands of dollars for procedures that were billed incorrectly, services that were never provided, or charges that should have been covered by insurance. For uninsured patients, who are typically billed at the highest chargemaster rates, billing errors can be particularly devastating. Even for insured patients, errors can result in higher copayments, deductibles, and coinsurance amounts than are actually owed.
This guide will teach you how to identify the most common types of medical billing errors, walk you through the process of disputing incorrect charges, and provide strategies for protecting yourself from overbilling in the future.
Most Common Types of Medical Billing Errors
Duplicate Billing
Duplicate billing occurs when the same service, procedure, or supply is charged more than once on your bill. This is one of the most common billing errors and can happen for several reasons, including data entry mistakes, system glitches that process the same charge twice, or charges being submitted by multiple departments for the same service. For example, if you received a laboratory test during a hospital stay, the test might be billed once by the laboratory and again by the nursing unit that ordered it. Always compare each line item on your bill to check for charges that appear to be duplicates.
Upcoding
Upcoding is the practice of billing for a more expensive procedure or a higher level of service than what was actually provided. This can happen intentionally as a form of fraud, or unintentionally due to coding errors. Common examples include billing for a complex office visit when a simple one was performed, billing for a brand-name medication when a generic was administered, billing for a private hospital room when you were in a shared room, or billing for a higher-complexity surgical procedure when a simpler one was done. Upcoding results in higher charges for the patient and higher payments from insurance companies.
Unbundling
Unbundling occurs when services that should be billed together under a single comprehensive code are instead billed separately at individual prices that add up to more than the bundled rate. Medical coding rules specify which services should be bundled together, and billing them separately is a violation of those rules. For example, a pre-operative workup that includes standard blood tests and an EKG might be included in the facility fee for surgery, but if the hospital bills these tests separately in addition to the facility fee, that constitutes unbundling.
Incorrect Patient Information
Errors in patient information, such as an incorrect insurance policy number, an incorrect date of birth, or a misspelled name, can cause claims to be denied by insurance companies, resulting in the patient being billed for the full amount. While these errors are typically easy to correct, they can cause significant stress and delays if not caught promptly. Review all bills and insurance correspondence for accuracy of your personal and insurance information.
Balance Billing Errors
Balance billing occurs when a provider bills you for the difference between their charge and the amount your insurance paid. While balance billing is legal in some circumstances, it is illegal in others, particularly for in-network providers and for emergency services under the No Surprises Act. If you receive a balance bill that you believe is inappropriate, check whether the provider was in-network, whether the service was an emergency, and whether the No Surprises Act or your state’s balance billing laws apply to your situation.
How to Review Your Medical Bills for Errors
Request an Itemized Bill
The first step in identifying billing errors is to request a fully itemized bill that lists every individual charge. The summary statements that hospitals and providers typically send are not detailed enough to identify specific errors. Your itemized bill should include CPT codes that identify each procedure, HCPCS codes for supplies and equipment, the date each service was provided, the quantity of each item, and the charge for each line item. You have the legal right to receive an itemized bill upon request.
Compare the Bill to Your Medical Records
Once you have your itemized bill, compare each charge to your recollection of the care you received and, if possible, to your medical records. Check that the dates of service are correct, that you recognize each service listed, that medications and supplies match what you actually received, and that the level of care billed matches what was provided. Make a list of any charges that seem incorrect, unfamiliar, or questionable.
Review Your Explanation of Benefits
Your insurance company sends an Explanation of Benefits for each claim it processes. The EOB shows the amount the provider charged, the amount the insurance company paid, any adjustments or discounts applied, and the amount you owe as your share of the cost. Compare the EOB to your itemized bill to make sure the amounts match and that your insurance has been properly applied. If your insurance denied any charges, review the reason for the denial and determine whether it should be appealed.
How to Dispute Medical Billing Errors
Contact the Billing Department
When you identify an error on your medical bill, contact the provider’s billing department to discuss the issue. Have your itemized bill, medical records, and any supporting documentation ready. Clearly explain the error you have identified and request a correction. Keep detailed notes of your conversation, including the date, the name of the person you spoke with, and any commitments they made regarding resolution.
If the billing department agrees that an error occurred, ask them to send you a corrected bill and, if applicable, to resubmit the corrected claim to your insurance company. If they disagree with your assessment, ask for a detailed explanation of why they believe the charge is correct and request any documentation that supports their position.
File a Formal Dispute
If you are unable to resolve the billing error through informal communication, file a formal written dispute with the provider. Your dispute letter should clearly identify the charges in question, explain why you believe they are incorrect, reference any supporting documentation, and request a specific resolution. Send the letter by certified mail with return receipt requested, and keep a copy for your records.
Involve Your Insurance Company
If you believe your insurance company processed a claim incorrectly, contact the insurance company’s member services department to request a review. Provide any documentation that supports your position, such as evidence that the service should have been covered or that the provider was in-network. If the insurance company maintains its position after the initial review, file a formal appeal following the process outlined in your plan documents.
Protecting Yourself from Future Billing Errors
To minimize your risk of billing errors in the future, take proactive steps throughout every healthcare encounter. Verify your insurance coverage and benefits before receiving care. Confirm that your providers are in-network before scheduling appointments or procedures. Request pre-authorization when required by your insurance plan. Keep a personal log of all services you receive, including dates, providers, and descriptions. Review every bill and EOB carefully before making any payments.
Consider requesting a cost estimate before any planned procedure. Federal price transparency rules require hospitals to provide estimates upon request, and many providers are willing to provide advance pricing information for planned services. Having an estimate in hand before the procedure gives you a baseline against which to compare the actual bill and makes it easier to identify unexpected charges.
If you are facing a large or complex medical bill that you suspect contains errors but do not feel confident reviewing on your own, consider hiring a professional medical billing advocate. These specialists have the expertise to identify billing errors that may not be apparent to the untrained eye and can negotiate with providers and insurance companies on your behalf. The cost of hiring an advocate is often more than offset by the savings they achieve through error correction and bill negotiation.