Overcharged at the Hospital? Here’s How to Correct a Billing Error.

Medical bills are complicated. And while they’re the last thing you want to spend your time on, reviewing them thoroughly to understand each one could save you serious money.

In 2020, Medicare (part of the nation’s largest healthcare payer) had an improper payment rate of more than $25 billion, according to the Centers for Medicare & Medicaid Services.

Even if you’re insured and have full trust in your medical provider, billing mistakes and errors can still happen. But you have ways to protect yourself before you’re billed, as well as strategies for disputing charges.

Understanding the explanation of benefits

Before or around the time you’re billed, you’ll be sent an explanation of benefits (EOB). This is not an actual bill, but it lists key information: what your plan paid, what you might owe, and where you stand with your deductible.

“The EOB is a form from the insurance company that specifies what services were billed and paid on behalf of the insured,” says Scott Maibor. He’s a licensed insurance adviser and an expert at MedicarePlans.com.

Maibor notes that most people ignore the message of “THIS IS NOT A BILL” and likely don’t feel the need to read it or investigate further.

“That’s unfortunate, as it’s a great way to not only make sure that you’re not being charged for services you didn’t receive, but also to catch identity and medical fraud occurring in your name,” adds Maibor.

How to read medical bills

Maibor says there are three main terms that are important for you to understand: deductible, copay and coinsurance.

Deductible

Per Healthcare.gov, the deductible is “the amount you pay for covered healthcare services before your insurance plan starts to pay. With a $2,000 deductible, for example, you pay the first $2,000 of covered services yourself. After you pay your deductible, you usually pay only a copayment or coinsurance for covered services.”

Copay

The copay is “the fixed amount ($20, for example) you pay for a covered healthcare service after you’ve paid your deductible. Let’s say your health insurance plan’s allowable cost for a doctor’s office visit is $100. Your copayment for a doctor visit is $20.”

Coinsurance

Coinsurance is “the percentage of costs of a covered healthcare service you pay (20%, for example) after you’ve paid your deductible. Let’s say your health insurance plan’s allowed amount for an office visit is $100 and your coinsurance is 20%.”

• If you’ve paid your deductible, you pay 20% of $100, or $20. The insurance company pays the rest.
• If you haven’t met your deductible, you pay the full allowed amount, $100.

Adds Maibor, “It’s well worth taking the time to familiarize yourself with what you’re being charged and why, and if anything doesn’t make sense or seems wrong, to ask and to push for an explanation that’s clear and understandable.”

How to challenge a medical bill

If you need to challenge a medical bill, you might not know where to start or who to get in touch with. Here are a few tips to help you feel confident and empowered when challenging medical bills:

Tip #1: Request an itemized bill

A quick call to your insurance company can potentially save you thousands of dollars by asking for an itemized bill.

“Itemized bills will show everything being billed to you, everything paid on your behalf by the insurance company and requests from the providers to the insurance company for payment,” says Maibor. “It can be obtained by calling the billing department or using the insurance company’s online portal.”

Tip #2: Request your explanation of benefits

Maibor notes that the explanation of benefits is a less detailed overview of what has been billed/paid on your behalf, but you should still receive it.

“Medicare recipients are required to receive these as a way to check for fraudulent claims, though most people ignore them,” says Maibor. “They can be requested from the carrier but should be received automatically.”

Tip #3: Don’t throw out your explanation of benefits

Again, while these aren’t actual bills, they contain information on exactly what you’ve been charged for, and by who.

“Take the time to glance at the EOB to make sure it seems to make sense. If not — like a charge for a test when you were traveling — then dig deeper by contacting the carrier,” says Maibor.

Tip #4: Call your insurance company right away

If you find any error, you should call the insurance company immediately to open a dispute.

“This could be an overcharge to you or a provider charging you for a service that was not received,” says Maibor. “If it appears that a charge is fraudulent, it should be elevated for investigation. Start by calling the insurance company’s beneficiary number on the back of the card.”

Tip #5: If you’re on Medicare, read your annual notice of change letter

“Medical costs account for a huge portion of a senior’s expenses. Both innocent and fraudulent mistakes can unnecessarily add to these costs,” says Maibor.

“Every client receives an annual notice of change, an ANOC letter, to let them know exactly what the benefits are from year to year,” says Roseann Birch, Medicare expert at MedicarePlans.com. “Unfortunately, most clients seem to just throw this away instead of reading it, and then they’re surprised when charges for a new year are not the same as charges from the previous year.”

If you suspect Medicare fraud, you have several ways to report it, according to the Centers for Medicare & Medicaid Services:

• Call 1-800-MEDICARE (1-800-633-4227). TTY users can call 1-877-486-2048.
• Call the fraud hotline of the Department of Health and Human Services Office of the Inspector General at 1-800-HHS-TIPS (1-800-447-8477). TTY users can call 1-800-377-4950.
• Visit tips.oig.hhs.gov to file a complaint online.

Additional sources
Centers for Medicare & Medicaid Services: 2020 Estimated Improper Payment Rates for Centers for Medicare & Medicaid Services (CMS) Programs.
Healthcare.gov: Glossary of terms
Centers for Medicare & Medicaid Services: Protecting Yourself and Medicare from Fraud