Consumer Alert: Fraudulent Medical Bills

In its September 8 issue, published this week(?!), Business Week had an amazing article about over-billing by medical professionals. I recommend that you read the full article for yourself, but the gist of it is that medical professionals are over billing patients through a practice called "balance billing".

Here is how the article defines balance billing:

"As health-care costs continue to soar, millions of confused consumers are paying medical bills they don't actually owe. Typically this occurs when an insurance plan covers less than what a doctor, hospital, or lab service wants to be paid. The health-care provider demands the balance from the patient. Uncertain and fearing the calls of a debt collector, the patient pays up."

According to the article, this practice is illegal in 45 states... including in California, in which we happen to live. And check out this quote:

"National statistics aren't available, but there's little doubt that many consumers unwittingly fall victim to balance billing. The California Association of Health Plans, a trade group in Sacramento, estimates that 1.76 million policyholders in that state received such bills in the past two years, totaling $528 million. The group found that 56% paid the bills. "Patients think they owe this money, and it causes tremendous stress and anxiety for people," says Cindy Ehnes, director of the California Managed Health Care Dept."

Wow. I bet we're in that category - 1.76 million folks in California alone! I can think of at least one suspicious incident in which we received a large bill for an emergency room visit with one of our sons. This bills was sent to us after the insurance company already paid it's share. Talk about ignorance. I didn't even know that this was an issue. We simply paid our medical bills when we got them in the mail, assuming that this was simply the thing to do. It appears that we may have been taken for a ride, at least on some of these bills... we will have to go back and check.

So, what should you do if you get one of these bills in the mail? To be honest, I am not quite sure, however it seems that a good place to start might be to contact your insurer when you get demands for payments from medical service providers and try to obtain more information. Clearly, some of these bills are justified, such in cases where the insurance clearly states that it will only cover a portion of the bill. However, knowing which demand is legitimate and when you are being shaken down for cash seems to be the challenge.

Also check out this video segment by CBS on the same topic. for more advice.