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How to Make Sure You're Not Paying More Than You Should for Healthcare in Retirement

In 1999, engineering teams from NASA and Lockheed Martin were collaborating to get the Orbiter satellite to enter Mars’ orbit. For their calculations, NASA team used the metric system and the Lockheed Martin team use the English system. As a result, the Orbiter got off course and was lost in space. The cost of the lost Orbiter all $125,000,000, all caused by a simple mistake.1

Likewise, mistakes can happen on your medical bills and insurance statements. Teams from medical providers and health insurers use complex coding systems to figure out what you should pay. If these teams make a mistake, you could end up overpaying. The American Medical Association found that 7.1% of bills have at least one error.2 Other groups that review bills on patients’ behalf found error rates closer to 80%.2 Most of us aren’t even aware those errors could exist. Let’s find out how to find those errors so you can avoid overpaying for your healthcare.


The American Medical Association found that 7.1% of bills have at least one error. Other groups that review bills on patients' behalf found error rates closer to 80%.
Source: It's Time to Get a Second Opinion Before Paying That Medical Bill, NBC News, 3/27/16. Most recent data available

What We’re Going to Cover:

  1. Why clients get so many medical bills
  2. Hidden errors
  3. How to detect the errors

 

First, Why Do We Get So Many Medical Bills?

Thanks to medical advancements, most of us are living longer and healthier lives than previous generations. But those advancements come at a price. And we’re paying for it, especially after we turn 65. Fidelity estimates that we’ll need $280,000 to cover our health care expenses in retirement.3 After we turn 65, 92% of us will be managing at least one chronic condition and 77% will be managing two or more chronic conditions.4

On top of that, we’re typically managing at least 14 prescriptions. By age 85, that number jumps to 18 prescriptions.5 Visits to the doctor become a regular event, involving general practitioners, specialists, and pharmacists. The result is a pile of medical bills and statements from your health insurance provider or Medicare. And they’re not easy to understand.


Our Need for Healthcare Rises as We Age

Source: *Healthy Aging, National Council on Aging, 1/14. Most recent data available used. **Integrated Media Kit 2017, The Consultant Pharmacist, 2017

Those Statements Are Confusing

It’s hard to tell which ones are bills and which ones are statements. For example, some say, “This is not a bill,” So we think maybe you can just toss it in the trash. But they show amounts you’re responsible for, so you might think you should pay for something. We also receive bills that really do need to be paid. But deciphering those bills can be tricky because they’re loaded with codes and descriptions we might not understand. We might just figure it’s best to just pay it. But by “just paying it,” we might be overpaying.

Second, There Could Be Hidden Errors in Those Bills

The complexity of medical bills has exploded. When you go for medical treatment of any kind, doctors keep track of everything they do, like taking your blood pressure, checking your breathing, giving you a shot. These tasks get translated into billing codes. And there are thousands of them. New ones are being created all the time as treatments keep getting added and get more specific.

Coding is so complex, it’s become an entire industry. In 2008, there were 70,000 members in the American Academy of Professional Coders. In 2017, there were 170,000.6 Some of these coders work for insurance companies and some work for medical providers. Coders who work for medical providers strive to use codes that bring in as much revenue as possible. Coders who work for insurance companies use codes that reduce payments or deny claims as overreaching. Medical providers and insurance companies can even use different coding systems. The bottom line: all these coders are humans that can make mistakes. But you’re not a coding expert, so is it really possible for you to detect those errors?

 


The Number of Medical Coders is Exploding

Every medical treatment you receive gets a code. The amounts that you're billed are based on those codes. The number of codes keeps growing, along with the coders who create them. As codes become more complex and numerous, there's more potential for errors.
Source: Those Indecipherable Medical Bills? They’re One Reason Health Care Costs So Much, The New York Times, 3/29/17. Most recent data available.

 

Third, How Can You Find Those Pesky Errors

The last thing we want to do is overpay because of coding errors. To look for possible errors, start by looking at your explanation of benefits (EOB) statement from your insurance company or, if you’re covered by Medicare, your medical summary notice (MSN). These are statements—not bills—but don’t toss them. They’re the key documents you’ll use to detect errors. Store all of them in one easy-to-find place. 
 

Find the Column That Says Something Like “Date And Description of Services”

Review the dates and descriptions to make sure you actually received the treatments listed. Look for any descriptions of treatments that you didn’t receive. If you find something that doesn’t seem right, call your insurance provider. Their number and website will be on the statements. You can also ask them to explain any codes that you don’t understand. 

Next, review bills you receive from medical providers, e.g. doctors, hospitals, specialists, etc. Check to see if the dates, descriptions, codes, and amounts on the bills match the info on the insurance statements. If they don’t match, call your medical provider. They may have coded your bill incorrectly and can fix it. If your medical provider won’t fix and reissue your bill, call your insurance provider and tell them your concern. 

 

AARP Offers Decoders to Help You Understand Medicare Statements

If you are still having a tough time, AARP can help you understand Medicare MSN statements. If you’re insured by Medicare, you’ll be receiving one of these every quarter when you receive medical treatment. These statements contain information similar to EOB statements. AARP created decoders for Medicare Part A and Part B that can help you make sense of the sections on these statements.

If you try the decoders, and still have questions about your MSNs, call 800-MEDICARE (800-633-4227).If you’ve been billed for a treatment that you think should be covered by Medicare, call Medicare first and try to resolve it over the phone. If you’re still not satisfied, Medicare has an appeal process. It’s a bit tedious, but it can be worth it.

 

You Can Also Get Help From Billing Advocates

If you’d rather not dig into all the details of bills and EOB statements, you can hire a professional billing advocate. Sometimes, health insurers provide access to billing advocates. But often you’ll need to pay for them yourself. They can cost up to $250 per hour, or some charge a percentage of the amount saved.7 You can find billing advocates at Alliance of Claims Assistance Professionals or Medliminal
 

Is It Really Worth All the Work?

If you’re going to dispute a bill or statement, it’s going to take work. You’ll need to do your homework and have your facts straight. It can also be frustrating to navigate complex bureaucracies. But doing nothing could mean you’re responsible for paying a big bill that you shouldn’t have to pay. And if you don’t pay it, you could have creditors coming after you.

 

To Summarize, We’ve Covered:

  1. Why clients get so many bills
  2. Hidden Errors
  3. How to detect the errors

 

Mistakes Are Going to Happen. Don’t Let Them Cost You Money.

Whenever humans and complex systems exist, mistakes are possible. NASA found that out the hard way. If mistakes happen on your medical bills or insurance statements, you might overpay. But now you know how to find those errors. The few minutes it takes to check for accuracy could be well worth it. 


Next Steps:

  1. Gather a few of your most recent medical bills and EOB statements, or MSN statements if you’re on Medicare

  2. Compare the amounts on your medical bills to your statements 

  3. If the amounts on your bills don’t match the amounts on your statements, you may have found an error. If you find an error on your bills, call your medical provider. If you find an error on your statements, call you insurance provider.
 

Sources:

1Metric mishap caused loss of NASA orbiter, CNN, 9/30/1999. Most recent data available.

2It's Time to Get a Second Opinion Before Paying That Medical Bill, NBC News, 3/27/16. Most recent data available.

3A Couple Retiring in 2018 Would Need an Estimated $280,000 to Cover Health Care Costs in Retirement, Fidelity® Analysis Shows, Fidelity, 4/19/18

4Healthy Aging, National Council on Aging, 1/14. Most recent data available used.

5The Consultant Pharmacist, “Integrated Media Kit 2017,” 2017

6Those Indecipherable Medical Bills? They’re One Reason Health Care Costs So Much, The New York Times, 3/29/17. Most recent data available.

7Don’t Overpay Because Your Doctor Screwed Up Your Bill, GOBankingRates, 12/12/15. Most recent data available

Links from this article to a non-Hartford Funds site are provided for users' convenience only. Hartford Funds does not control or review these sites nor does the provision of any link imply an endorsement or association of such non-Hartford sites. Hartford Funds is not responsible for and makes no representation or warranty regarding the contents, completeness or accuracy or security of any materials on such sites. If you decide to access such non-Hartford Funds sites, you do so at your own risk. 

The material is provided for educational purposes only. 

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