Medical Billing Errors: What can go wrong? What can you do? - 6 -Billing begins

Medical Billing Errors: What can go wrong? What can you do? - 5 - Compiling the bill

Step 5: Billing begins

More than 30 people could be involved in this final stage, which begins with the hospital transforming the medical record into a universal bill that it submits as a claim to the insurance company. This stage ends with a patient receiving a bill for the balance. There are twists and turns along the way that can cause delays and denials.

Final review

At this point, technology begins to take a lead role. An electronic universal bill is complete. The hospital's computer system processes the bill to clear the insurance company's payment systems and automatically generates a statement to the patient that shows the treatment and services provided. This is not a bill. It simply lists the treatment received.

• The bill is run through the hospital's computer software that acts as a "claims scrubber," flagging problems and customizing the claim in accordance with each insurance company's individual requirements -- an upfront effort by the hospital to keep the claim from being rejected.

• A so-called "clean" claim is one that moves through the hospital's scrubber without a hitch and is ready to be transmitted to the insurer.

• A "failed" claim is one that's kicked back from the claims scrubber to a hospital billing specialist for more work. (Billing specialists develop expertise on the requirements of specific insurance companies, and bills are assigned to them based on the insurance company involved.)

In the case of a failed claim, the billing specialist must figure out the problems with the claim. Then that person often must speak with a clinical case manager or several members of the medical staff. For example, a claim might fail to clear the scrubber because it appears that a patient had blood work done too often. The billing specialist will then contact the medical staff to request documentation on why the tests were repeated.

"You could have three to four things happen on any one claim," said Summa's Kevin Theiss. The billing process is all about "eliminating the obstacles for payment."

Loop: With each problem on a "failed" claim, the last several steps must be repeated and could involve about a dozen people.

Submission for payment

Once it passes the scrubber, a claim is submitted to the insurance company. Most claims are transmitted electronically, but some insurance companies don't accept electronic submissions and require paper copies of the claim to be mailed. This can add several people to the process.

• Four things could happen at this point: The claim could be accepted and processed for payment; it could be rejected outright, which might happen if an insurance company believes the patient isn't one of its members; the claim could be kicked back for additional documentation; or all or part of the claim could be denied.

• At this point, the insurance company usually sends the patient an "explanation of benefits," or EOB, showing the medical treatment received, its cost and how much is covered by insurance. This is not a bill. But it often triggers calls from patients to customer service representatives for the hospital and insurance company. A different person usually picks up the phone each time a patient calls, and that could dramatically increase the number of people who could affect the bill.

• If a claim is kicked back for additional documentation, a hospital follow-up specialist may contact a case manager and a medical records person to get additional paperwork to send to the insurance company. If that paperwork doesn't have sufficient detail, the follow-up specialist may have to go back to a member of the hospital's clinical staff. This happens frequently on large claims of $100,000 or more.

Loop: When the hospital is satisfied with the payments, it repeats the process with a secondary insurer, if any, beginning with the claims scrubber and often a new billing specialist. This would involve several more people.

The patient receives a bill

Once the hospital and insurance company agree on the payment, a bill is sent to the patient. While some hospitals wait to send the bill to the patient at this point in the process, others send a bill earlier, before questions about insurance payments are completely resolved.

• In the final stage, there can be numerous customer service representatives for the hospital and insurance company who respond to patient calls for clarification or more information. In some cases, the patient may challenge the claim, asking for more detailed information or medical records from the hospital or the insurance company.

The patient disputes the bill, doesn't pay

Some hospitals wait until disputes with a patient are fully resolved before turning unpaid balances over to collectors. Others do not.

• In as little as 45 days, hospitals often turn a bill over to a separate department that specializes in bill collection. This department will contact the patient to discuss payment.

• Often after 150 days the bill goes to an outside collection agency or lawyer who contacts the patient. Again, this could happen sooner for some hospitals.

What can go wrong?

Problems could be as simple as an incomplete "coordination of benefits form," or as complicated as an insurer's request for hundreds of pages of medical records to review a claim. The insurance company may think the hospital is asking for a payment the insurer doesn't believe is due. The hospital may believe the insurer failed to update that member's records in its database and is therefore rejecting them or underpaying on the contract.

What can you do?

Regardless of what the hospital or doctor did to confirm coverage with insurance, patients also should personally check with their insurance company before scheduling surgery. A patient needs to ensure that all benefits information has been updated and ask what treatments are covered and by how much. Make sure all the work is being done by a network provider, if that is necessary for insurance payment. Keep track of who is talked to and when.

If a collection agency calls, be sure to call the hospital or doctor before making a payment. The collection agency's information may be inaccurate or outdated.

Finally, if the patient can't pay, call back the hospital or doctor and ask for a financial counselor. The hospital could discount the charges based on the patient's financial qualification. A payment plan also can be arranged.