Learn what medical price fraud is, how it impacts you, what you can do to avoid it.
What is Medical Price Fraud?
Whether intentional or not, patients get charges they don’t owe on their medical bills. While many overcharge errors are honest mistakes, medical price fraud is committed most often by dishonest providers intentionally trying to make an unjust profit off patients and insurance carriers. And it’s not just seldom; it’s chronic.
Health care fraud losses are estimated to cost in the tens of billions of dollars each year, according to The National Health Care Anti-Fraud Association (NHCAA). And some government and law enforcement agencies show the losses could reach more than $300 billion.
Sometimes it’s tactical and intentional; sometimes it’s a legitimate mistake. Either way, medical bills are often wrought with fraud and errors. And it’s impacting you as a patient, at times in big ways.
But patients who suspect they’re victims of medical price fraud, like the working mom of 3-year-old twins, don’t have time to wait on hold for 40 minutes to dispute a bill. And even after the busy mom gets a live person, how does she begin to argue her case?
We believe patients have a right to know, so we want to let you in on the ways you might be fraudulently billed, and equip you to identify inaccuracies.
Here are 8 common ways patients get charges they don’t owe, and what you can do to avoid it.
- You’re billed for a more expensive treatment than you received
It’s called upcoding, and it appears in hidden places throughout the billing process. For instance, you’re diagnosed at the doctor with a cold, but the bill shows a code for pneumonia. Or a nurse practitioner performs your procedure, but the claim sent to insurance says it was a doctor who saw you, and thus billed at the higher rate.
Victims of upcoding end up paying more out of pocket, and may pay larger coinsurance or meet insurance caps faster, resulting in a denial of future services. Even more seriously, some are given substandard treatment. In some cases, patients have died during operations due to faulty pacemakers and catheters.
- You’re billed for fake tests or services you don’t need
A patient visits the emergency room complaining of dizziness. The doctor automatically orders an unwarranted chest x-ray. Or a patient falls, and an unnecessary CT scan is ordered. These medically unnecessary and aggressive tactics are designed to make money for the hospital, doctor, or facility that orders them.
- You receive a bill for a procedure or equipment you never received
You notice a charge for crutches for your follow-up knee surgery buried in your provider’s bill. The problem is, you already received and paid for crutches during the first surgery. You never got (or needed) the second pair. Whether intentional or not, both pairs of crutches are billed to your insurance, with the patient portion due to you.
- You’re billed for a balance you don’t owe
Your in-network provider and insurance company have behind-the-scenes negotiated amounts to accept for certain services. The acceptable practice is that insurance is billed a higher amount, then pays a lower, negotiated amount. If you are balance billed the difference between what the doctor wants to charge and the allowable, that’s illegal.
Sadly, most patients are completely unaware when they’re billed illegitimately and just pay as they would any other invoice.
- You’re given services or surgeries you don’t need
This is one of the scarier forms of medical price fraud. These may show up in the form of unnecessary services or surgeries that can be dangerous to your health or deadly.
In one real life case, an OB/GYN was arrested in 2019 for performing unnecessary surgeries on patients to collect more payments from insurance. Some of these surgeries included hysterectomies, dilation and curettages, and the removal of ovaries and fallopian tubes.
- You’re billed – twice
Double billing happens when providers bill the same date of service or procedure code twice, when only one is covered.
We once incredibly saw a patient billed an initial established care visit, twice. How can a patient have a first visit – twice? In reality, of course, the provider’s office billers used the wrong code the second time, but it didn’t stop the patient from getting the bill when the second claim was denied.
Double billing can also happen when a claim that was billed improperly the first time is re-submitted to insurance. Re-submitting claims happens often, but a problem occurs when it’s denied as a double bill instead of correcting and replacing the initial claim.
- A sneaky out-of-network provider shows up out of nowhere
You’re referred by your in-network doctor to get an x-ray at an in-network diagnostic center. Unbeknownst to you, the tech running the x-ray machine is out of network. And you don’t realize it until that charge is kicked out by your insurance company. How did that happen?
Unfortunately, it happens more often than you think. As a patient, you trust that your doctor will keep you in network by referring you to others in network, but after you’ve had the lab work, procedure, or scan done and that bill arrives in the mail – it’s too late.
Or so it seems. Patients have more recourse than they think, but little awareness of how to challenge bills.
- Your insurance may be billed a la carte instead of the bundling required
A doctor may order a blood panel, but bill each test individually, to get more money from insurance.
It’s the same reason a soda and burger cost a lot more separately than as a meal at the local fast food place. More serious than the fast food example, unbundling is illegal.
How to Prevent Medical Price Fraud from the Get-Go
- Your first line of defense when you receive any bill is to make sure you really owe what the doctor’s office, lab, or equipment provider wants to bill you.
- Review your Explanation of Benefits (EOB) and make sure the patient responsibility portion matches the invoice from your provider. If there’s ever a discrepancy, that’s a no-brainer that something is wrong.
- Be your own advocate and question everything. Asked to pay more than your copay at the time of visit? Question it. Received a bill before your insurance has paid their portion? Dispute it. Arm yourself with knowledge about your plan coverage and challenge anything that doesn’t look right.
Medical price fraud can be sneaky and tough to catch. If it feels like more than you can handle, sign up for a free HealthLock account today. HealthLock provides an initial audit of up to 2 years of your claim history, alerts on any transactions that look suspicious, and secure, always-on monitoring and detection after that.