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Over twenty years ago, Pat Palmer, in her own words, “stumbled upon a $400 overcharge in a bill my father received for a routine medical procedure.” That might have become the costliest “overcharge” the gouging, overbilling health care industry ever inflicted on itself. Because it led Ms. Palmer, whom Steve Brill (author of the Time Magazine cover story, “Why Medical Bills are Killing Us,” April 4, 2013) called “one of my earliest tutors as I tried to figure out the dysfunctional world of medical economics and billing,” to start a business investigating the overbilling of patients.
Located in Roanoke, Virginia, Medical Billing Advocates of America (MBAA) (billadvocates.com) makes money by saving patients money. No savings, no charge. In twenty years, she has collected a multitude of cases of doctors, hospitals and insurance companies overcharging. This evidence reflects routine, everyday overbilling in the many billions of dollars a year.How extensive is this commercial crime wave? The nation’s expert on computerized billing fraud, Malcolm Sparrow, who is an applied mathematician at Harvard, estimates medical billing fraud adds up to a minimum sum of $270 billion a year or at least ten percent of all health care expenses. His classic book, License to Steal, showed that these ripoffs are not just clerical errors or computer malfunctions. The systemic fraud goes far beyond the organized criminal syndicates defrauding Medicare that the FBI raids once in a while. The frauds are designed with corporate interests in mind to filch your wallet directly or under the nose of unobservant insurers, from the very design of billing statements to the manipulation of codes.
Pat Palmer is out with a paperback titled Surviving Your Medical Bills, which is self-published by her firm, MBAA. Ms. Palmer explained she almost gave up on “all the rules and regulations that no one is enforcing.” It’s a good thing she didn’t. Instead, Ms. Palmer decided to rile up the patients and their families directly with her book by describing how outrageously brazen billing practices are (not just an aberration) and showing how people can become common-sense investigators if they receive these shocking bills.
Start with the fact that about eighty percent of all medical bills contain errors, with the average error being $1,300. Most of these overbillings favor, unsurprisingly, the sellers (euphemistically called “the providers”). Ms. Palmer says the situation has been getting worse. With the number of diagnostic codes growing from 17,000 to about 60,000 under Obamacare, to supposedly improve efficiency, the system has become even more complicated, with hospitals and few others knowing how to game or beat the system.
She lists many of the ways that medical bills are hugely inflated, using the technique known as unbundling, when tests and procedures are broken down into their individual components, which allows for double or triple billing. (This is like selling cars based on the total price of all of its components billed as repair shop replacements.)You can get these itemizations by refusing to accept a “summary bill,” and ask, as is your right under state law, to receive an itemized bill which sometimes will extend to pages of computer printout in inscrutable code that you can then demand an explanation in ordinary English.
Hospital billings for similar services or items vary wildly and arbitrarily. Ms. Palmer found a hospital charging $444.78 for a 10-milligram vial of the neuromuscular blocking drug Norcuron. She then found another hospital “charging $17.90 for the same 10-milligram vial.”
In her book, she often refers to documented examples of massive overbilling on major surgeries, major medical equipment and lesser items. People have been charged for phantom procedures, nominal physician visits, for hospital employees transporting specimens down a few floors to the labs. Patients, are charged for omnibus services and products, then charged again and again for the pieces.
Obviously there are variations as well in levels of honesty and fraud between institutions and practices. But overall, what Palmer and Sparrow are writing about is, arguably, one of our country’s biggest commercial crime wave.
For the corporate establishment, there are always the easy ways out such as confessing error, but not intent, when caught or arguing reasonable industry practices. They quickly correct the specific bill of its offending bloat and satisfy the complaining patient, but nothing else changes.
Located in Roanoke, Virginia, Medical Billing Advocates of America (MBAA) (billadvocates.com) makes money by saving patients money. No savings, no charge. In twenty years, she has collected a multitude of cases of doctors, hospitals and insurance companies overcharging. This evidence reflects routine, everyday overbilling in the many billions of dollars a year.How extensive is this commercial crime wave? The nation’s expert on computerized billing fraud, Malcolm Sparrow, who is an applied mathematician at Harvard, estimates medical billing fraud adds up to a minimum sum of $270 billion a year or at least ten percent of all health care expenses. His classic book, License to Steal, showed that these ripoffs are not just clerical errors or computer malfunctions. The systemic fraud goes far beyond the organized criminal syndicates defrauding Medicare that the FBI raids once in a while. The frauds are designed with corporate interests in mind to filch your wallet directly or under the nose of unobservant insurers, from the very design of billing statements to the manipulation of codes.
Pat Palmer is out with a paperback titled Surviving Your Medical Bills, which is self-published by her firm, MBAA. Ms. Palmer explained she almost gave up on “all the rules and regulations that no one is enforcing.” It’s a good thing she didn’t. Instead, Ms. Palmer decided to rile up the patients and their families directly with her book by describing how outrageously brazen billing practices are (not just an aberration) and showing how people can become common-sense investigators if they receive these shocking bills.
Start with the fact that about eighty percent of all medical bills contain errors, with the average error being $1,300. Most of these overbillings favor, unsurprisingly, the sellers (euphemistically called “the providers”). Ms. Palmer says the situation has been getting worse. With the number of diagnostic codes growing from 17,000 to about 60,000 under Obamacare, to supposedly improve efficiency, the system has become even more complicated, with hospitals and few others knowing how to game or beat the system.
She lists many of the ways that medical bills are hugely inflated, using the technique known as unbundling, when tests and procedures are broken down into their individual components, which allows for double or triple billing. (This is like selling cars based on the total price of all of its components billed as repair shop replacements.)You can get these itemizations by refusing to accept a “summary bill,” and ask, as is your right under state law, to receive an itemized bill which sometimes will extend to pages of computer printout in inscrutable code that you can then demand an explanation in ordinary English.
Hospital billings for similar services or items vary wildly and arbitrarily. Ms. Palmer found a hospital charging $444.78 for a 10-milligram vial of the neuromuscular blocking drug Norcuron. She then found another hospital “charging $17.90 for the same 10-milligram vial.”
In her book, she often refers to documented examples of massive overbilling on major surgeries, major medical equipment and lesser items. People have been charged for phantom procedures, nominal physician visits, for hospital employees transporting specimens down a few floors to the labs. Patients, are charged for omnibus services and products, then charged again and again for the pieces.
Obviously there are variations as well in levels of honesty and fraud between institutions and practices. But overall, what Palmer and Sparrow are writing about is, arguably, one of our country’s biggest commercial crime wave.
For the corporate establishment, there are always the easy ways out such as confessing error, but not intent, when caught or arguing reasonable industry practices. They quickly correct the specific bill of its offending bloat and satisfy the complaining patient, but nothing else changes.