WHILE ADRIENNE OCHS'S
husband was fighting for his life, she fought with their health insurance company. Just two weeks after switching over to her health plan in 2004, Ochs's husband, then 42 years old, was diagnosed with Stage IV non-Hodgkin's lymphoma. Their insurance company denied coverage on the basis that the illness was a pre-existing condition.
The family sued and reached an out-of-court settlement, stipulating that the insurance company should cover their costs. But while they had already amassed more than $70,000 in medical bills, they only received $50,000 in reimbursements.
Fortunately, Ochs's husband's cancer is in now remission. However, if they hadn't contacted Jessie Maurer, a patient advocate in West Des Moines, Iowa, last summer, they'd still be chipping away at the $18,000 they still owed. Maurer, who reviews patients' medical bills for errors, told the family that they had overpaid by more than $20,000.
Like many consumers, the Ochses had no idea that insurance companies negotiate lower fees with hospitals and doctors. As a result, when their insurance coverage kicked in retroactively, they were due the difference: information the hospital didn't volunteer. "My husband and I both have PhDs, so we're used to the research process, but this one floored me," Ochs says. "Who would have known!"
With soaring health-care costs and a system that has become as difficult to navigate as the tax code, people like Ochs are increasingly seeking out professional patient advocates. For an hourly fee or a percentage of the cost savings, these advocates review medical bills for errors and help consumers get reimbursed. (Their services can also include helping you select an insurance plan or a medical specialist to fit your needs.)
While such services are nothing new Medical Billing Advocates of America, one of the largest patient-advocacy networks, has been around for 10 years they are gaining popularity, especially among employers. Today, more than 3,200 companies, including large corporations like Home Depot, Citigroup and General Electric, have added health-advocate services to their benefits.
"The service fills a void," says Tom Lerche, senior vice president and health care practice leader for Aon Consulting, an employee benefits consultancy. "Employees don't feel like there's anybody advocating for them when they have issues with payment claims or how to research a rare disease."
Health Advocate, which currently works solely with employers but plans to launch a direct consumer service in the next two months, offers a variety of services, from helping with medical billing disputes to providing employees with information about certain health conditions and treatment options. They can even research physicians' credentials or schedule an appointment with a hard-to-reach specialist on your behalf, explains Marty Rosen, and executive vice president and co-founder of the company. Best of all, it's free to employees. (Companies pay between $1.25 and $4.95 per employee per month to provide that benefit.)
Want to enlist the help of a health advocate? Here's what you can expect:
Detecting billing errors
Medical bills are so cryptic that most consumers have trouble reading them, let alone detecting mistakes. And those mistakes are more common than you'd think. "Probably eight out of 10 bills have something wrong with them, either a service that was provided that was coded incorrectly, or a service that was not provided but was put there by mistake," says Randall Marrs, owner of Medical Audit Recovery Services in Tulsa, Okla.
The reason: Hospitals and doctors' offices use codes to describe patients' symptoms, diagnosis and treatment. When those codes don't match up say you were treated for a sore throat, but the billing department put in the code for an appendectomy your insurance company will simply deny payment, explains Gloria Froman, a medical billing specialist in Skokie, Ill.
To make matters worse, roughly 10% of the codes change each year so hospitals, which process an enormous number of claims each day, are particularly prone to errors, Froman notes.
But not all lapses are honest ones. Many hospitals overprice procedures and supplies egregiously. "It's not unusual to see supply items marked up sometimes as much as 1000%," says Marrs. "I've seen an oral swab billed for $55, when a package would cost you $2 at the drug store." Saline solution, which is often billed as much as $75 per 1000 ml, costs the hospital no more than 35 to 40 cents, he adds. Those are details you may not notice if your hospital co-pay is a fixed amount. But if you have to pay a portion of the bill say 10% or 20% you're paying part of those inflated costs.
Jan Porter, a 53-year-old market research consultant in Las Vegas, experienced the expensive consequences of a coding error firsthand. In December 2006, she was rushed to the nearest emergency room, choking and coughing up blood because of a torn vocal cord. The hospital wasn't in her provider network, but she was supposed to be covered 100% in cases where her condition was considered life-threatening. Porter was later surprised to receive a $1,360 bill from the hospital. Her insurance denied that amount, claiming that she was treated out of network.
It was only after numerous calls to her insurance company that Porter realized her bill said she went to the emergency room complaining of a sore throat. With the help of the hospital's in-house patient advocate some hospitals have health information management offices, which can help patients correct billing errors the wrong code has been corrected, though Porter is still waiting for Blue Cross Blue Shield to reprocess the claim. The health advocate is helping her communicate with the insurance company as well, significantly easing what would have been a painfully complex issue to deal with. "I honestly do not understand how people with no support system go about being charged $400 for an aspirin," she notes.
Advocating for the uninsured
The health-care system is especially harsh on the uninsured: Not only do they pay all costs out of pocket, but their bills can be many times higher than those paid by insurance companies. "It's not unusual, if you don't have insurance, to overpay by 300% to 500%," says Marrs.
Consider this: The average bill for an appendectomy is $35,000, according to Nora Johnson, a billing advocate with Medical Billing Advocates of America. For the same procedure, Medicare will typically pay a severely reduced price of roughly $5,000. An HMO may have a contract to pay $7,000 to $8,000, and a commercial insurer say Aetna or Blue Cross Blue Shield may pay $10,000. "But the uninsured will be dragged to court and have their wages garnished until they pay the $35,000," Johnson says.
What many consumers don't know is that hospitals have the option of extending what is called "charity care" to qualified patients, typically those who don't have insurance. The qualification requirements vary by state, so it's best to check with a local health advocate. In Oklahoma, for example, if you are unemployed or your employer doesn't offer health insurance and you earn less than $30,000 a year, you're entitled to discounts, says Tom Sullivent, an attorney who disputes medical bills on behalf of clients. But to get the discount, you have to be proactive. "Hospitals aren't required by law to divulge that information," he says.