Does Anyone Really Understand Medical Bills?
I would bet that few if any people, including health care professionals and business types, fully understand the medical bills they get in the mail. I have been thinking about this issue for some time and until recently I did not think the subject was worth blogging about. Two things changed my mind. The first was my recent experience in dealing with a medical bill I received for anesthesia services provided to me in January 2012 (I had cataract surgery). The second was two articles published in the NYT. One of the articles was published several months ago and entitled, “Why medical bills are a mystery,” and written by two academic types from Harvard University, Robert S. Kaplan and Michael E. Porter. The other article, published just the other day, was entitled, “Getting lost in the labyrinth of medical bills,” and written by Tara Siegel Bernard.
My medical bill
About a month ago I received a bill for $136.00 from a group of anaesthesiologists for services performed during my cataract surgery. The bill was impossible to understand. It showed a charge of about $2000.00 which was denied payment by Medicare, followed by a “credit readjustment” of $2000.00, followed by a new charge of $2000.00, and finally, payment by my secondary insurance of all but $136.00, which I was told I should pay immediately or else. I called the customer service number on the bill and explained that I did not undertand my bill. The billing specialist informed me that she also did not understand the bill and would have to get back to me. I waited and waited, and never heard back, but I received a new bill the other day. It was identical to the first bill I received except that the bill had bold lettering that said, “past due.” I called the customer service number again and explained my concerns. The billing specialist (not the same person as the previous time) exclaimed, “oh my,” and told me she did not understand the bill and asked if I would be willing to be put on hold for a little bit while she investigated. I agreed, assuming that this would be another one of those “terminal holds.” To my shock and awe, the billing specialist came back on the line after about 4-5 minutes and told me that she had figured things out. She first apologized and told me that they had “screwed up” and that I never should have gotten a bill, let alone, two bills. The details are not important, except that but for my problem in understanding the bill, I would have been out $136.00 (good thing the bill wasn’t for $136,000.00). This experience got me thinking that maybe I should write an entry about medical bills and my mind was made up when I saw the Tara Siegel Barnard piece in the NYT the other day.
The NYT article written by Kaplan and Porter addressed the question of how medical services are valued, that is, how a price tag is put on this or that service. Their take on things, which is backed up by lots of data, is that there is little rhyme nor reason to medical billing. How could a 3 minute eye laser treatment be worth $5000.00 and how could a five minute encounter with a physician be worth $300.00? No one really knows, and in medicine, prices are rarely set like they are in most businesses. Businesses generally figure out what it costs to perform the service or to make the product, factoring in all overheads including labor, depreciation, and whatever. A charge is then calculated based on the cost that adds some percentage of the actual costs for profit. According to Kaplan and Porter, that logical approach is rarely used in figuring medical charges and that is one reason people cannot possibly really understand their medical bills.
The NYT article written by Bernard, looks at medical bills in a different way- how to figure out if the bill is accurate. Do I really owe what the bill says I owe (even if the charge might be unreasonable)? Did my insurer/Medicare pay what they were supposed to? Did I really get all of the services that I was billed for? That sort of stuff. The article discusses a new breed of health care professionals called medical billing advocates. These billing advocates (let’s call them “MBAs”) are in business to help people figure out what is really owed. In the example used in the article, the MBA (many of these specialists actually do have advanced business degrees, like mbas) helped her client, a 68-year old patient, save many thousands of dollars. But to do this, the MBA spent 96 hours taking apart each of the patient’s bills and checking to see if the medical record supported the charge. You can be sure that no hospital or clinic or even insurer will do this. And of course, patients usually don’t have access to their medical records.
The bottom line
If you want to do your best to pay only what you actually owe for medical services, you either need help in the form of a MBA or be very well informed about your insurance plan and be willing to ask lots of questions. For people who are on Medicare, it’s a bit easier than for people with “regular” insurance or with no insurance. Medicare sends each client a detailed summary of what it did or didn’t pay for a medical service and why. For people who receive Medicare, it is well worth taking the time to understand the Medicare summary statement or talk with someone who does understand. I strongly recommend never paying a medical bill before reviewing the Medicare summary unless one already knows for cetain that the service is not covered by Medicare or by a supplemental insurance plan one may have.
I recommend that you read the Bernard article ( and if you are a health care professional, also advise your patients to read it). There is a fair amount of information on strategies and resources. Maybe someday our health care system will figure out how to come up with a way to charge prices for services that are acually tied to the costs of providing the services and also figure out an easy way for us to determinine if the medical bills we get are correct. Until then, I advise you to be a good detective. Finally, we as health care professionals need to appreciate the incredible distress our health care system billing quagmire can cause our patients. We need to let our patients know how get expert help if necessary to understand the bills we (or our health care organization) send them. Remember, we the health care professionals, are the ones who order the tests and carry out the procedures. We are ultimately responsible for the charges that end up on our patients’ bills.