Medical Billing Errors are Truly Nightmarish

With Halloween upon us, frightful tales of medical billing gone mad have captured the news headlines.  In an October 29th Associated Press article, Nora Johnson, director of education and hospital billing compliance for Medical Billing Advocates of America, was quoted as saying that nearly 80 percent of the hospital bills she sees contain billing errors. And just today, the head of healthcare business group HFMA said that billing systems must improve in hospitals ("Medical Providers Must Upgrade Billing Systems: HFMA Chief," 10/30).

While some of the errors may be quantitatively minor, anecdotal horror stories of patients who are billed for thousands of dollars more than they really owe, charged out-of-network prices for services from an in-network provider, or burdened by erroneous requests for out of pocket payments when annual deductibles have in fact already been met are increasingly common.

So who is to blame for unleashing these gremlins into medical billing systems?

Human clerical errors are the most likely culprit.  But in extreme cases, some consumer advocates warn that insurance fraud could be a factor.  Yet on a larger scale, the antiquated and frequently decentralized record and billing systems at hospitals and physician groups across the United States may reasonably bring about a significant percentage of billing mistakes that cost consumers time and money, and, in extreme cases, materially damage their credit ratings.

If medical billing errors are beginning to reach epidemic levels as some consumer advocates suggest, the public relations fall out for the hospital industry would quickly become a nightmare.  At the same time, serious mistakes might easily send some patient accounts into a collections stream, and those errors could come back to haunt collection agencies who pursue “debtors” like 17th century “witches” in Salem.

Healthcare providers, collection agencies, insurance companies: what is your silver bullet, your stake to the heart of hospital billing and collection errors?