Billing Errors in Health Care Abound as System Heads for More Complexity

May 6, 2012; Source: Cleveland Plain Dealer

As health care systems prepare for all of the many changes that the Affordable Care Act will entail, there is one that is relatively hidden from view: the ten-fold increase in billing codes that the federal government is planning to roll out next year (pushed back from a planned launch this year).

Stephen Parente, a professor of health finance and insurance at the University of Minnesota, claims that his research on medical billing found that up to 40 percent of claims sent between insurers and hospitals have errors. These errors, often caused by human error but sometimes the result of alleged fraud, may include double billing, billing for the wrong treatment, unexpected costs, or billing that is more than what an insurance contract allows. The American Medical Association claims these mistakes cost health care providers $17 billion last year and it blames insurance company practices, but others say the blame can be shared, and this article details many problems with hospital billing practices as well.

According to Kevin Theiss, a vice president at the Summa Health System, at the Summa Akron City Hospital, as many as 250 people may take part in the billing process, including intake workers, doctors and nurses and those who assign billing codes.  He says that the potential for mistakes at the hospitals is “astronomical.” In the midst of all of this, a change is brewing that is likely to make the whole system even more impenetrable for consumers. That is, the federal government, which requires that all medical billing use the same set of 16,000 universal codes (called ICD-9 codes) to identify medical problems and treatments, is planning to increase the number of codes to 155,000. While rolling out these new codes has been delayed by a year, the project is apparently moving forward apace. Some, including the American Medical Association, are heralding the delay. Eve before new codes are introduced, the complexity of the current system has created what the article describes as a “cottage industry” of experts that are there to advocate between institutional players.

“There are certified coders, ‘revenue cycle’ consultants, auditors who check claims, ‘denial management’ experts who step in for hospitals and doctors to help negotiate with payers for more money, and debt collectors who specialize in ‘accounts payable,’ or the bills hospitals and doctors think they can get the patients to pay if they press hard enough.

Consumers, in contrast, have no army of experts. They pretty much just have themselves and their bills.”

A related article detailing the most common billing problems is also worth reading. NPQ would love to hear what its readers in health care delivery think about what is changing and what needs to change in health care billing. –Ruth McCambridge