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Life Health > Running Your Business

The 5 most common reasons for medical overbilling

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The cost of health care in the United States is soaring, and not just for patients — also for the businesses that provide workers’ compensation coverage for their employees. Exacerbating the problem of already exorbitant health care expenses is overbilling from hospitals and doctors.

Unfortunately, a lot of businesses don’t even realize they’re being charged more than they should be for health care services rendered (or in some cases, not rendered), so they blindly pay the overinflated medical bills. This wastes money, cutting into the company’s bottom line, and, in some cases, it has a serious impact on the business’ operations.

That’s why it’s so important that businesses face the problem of medical overbilling head-on. By educating yourself on some of the most common overbilled medical expenses, you’ll be better equipped to spot these mistakes, contest them, and save money on your company’s health care costs.

  1. Duplicate billing: Medical bills are made up of a laundry list of little charges, and in many cases, a single hospital visit can generate multiple bills. In other words, you end up with several different bills that include countless different items. A lot of times, duplicate charges occur because you have so many different people entering these individual charges on the bills. A lot of times, hospitals will double bill in clever ways that you might not notice if you don’t know what to look for. As an example, if an employee undergoes surgery, the bill might include charges for the surgery and also charges for the surgical tray and tools used. This would very likely be a case of overbilling. A seasoned auditor would be able to spot subtle duplicate charges and get them corrected.
  2. Upcoding: Upcoding is a major problem that is contributing heavily to the soaring costs of health care. The way it works is doctors and hospitals will charge for more extensive and costly services than they’ve delivered, entering incorrect billing codes that lead to overcharges. In some cases, this is accidental and caused by confusion over how to pick the right payment codes. In other cases, it may be an abusive tactic designed to squeeze more money out of payers.
  3. Over-prescribing drugs: Another common cause of overbilling is over-prescribing drugs. For example, there has been a tendency on the part of some doctors to over-prescribe opioids. These drugs are very expensive, and because they’re over-prescribed, patients get hooked on them and then need extra treatment to wean off the opioids. This over-prescribing leads to higher than necessary costs.
  4. Abuse in utilization: This happens particularly often with physical therapists, who make money when patients come to see them. An abuse of power would be to say a patient with a minor shoulder injury must come in for an appointment two days a week for the next year. The therapist would make a ton of money, and they’d be acting out of self-interest. It’s important for businesses to have an ally on their side that can review such claims and ensure there’s no abuse in recommending more treatment than is actually needed.
  5. Charging more than they will accept: Just because a medical bill lists a certain price for a service rendered doesn’t necessarily mean that’s the amount you are liable for. Doctors and hospitals always have specific dollar amounts they will charge for specific services, but they tend to overcharge on bills. For example, a doctor might charge $200 for an office visit when their contract with the PPO says that they’re only allowed to receive $100. This kind of thing happens all the time, but most businesses just don’t catch it.

How to prevent overbilling

What can you do to ensure you or your clients aren’t being unfairly overcharged on your medical bills? It’s important to scrutinize every medical bill to ensure they are accurate and to dispute any erroneous charges when necessary. If you feel you don’t have the resources to to this with your current staff, consider partnering with a medical billing auditing company to audit every bill that comes across your desk. This small investment could save huge sums of money over time, more than paying for itself.


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