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The $1000 Coding Error

As a graduate student in the health field I often get phone calls from various family members and friends asking what I happen to know about different drugs, procedures, and devices. I was having one such conversation with my younger sister last spring. She had just completed her undergraduate education, started a new job, and was very proudly financially self-sufficient for the first time.

We were talking about birth control. Her yearly exam was coming up and she was considering the therapeutic and cost efficacy of different forms of contraceptive. I had recently attended a class where the intrauterine device had been discussed as a cheap, effective form of contraceptive that is underutilized in the United States. A few strokes of the keyboard and my sister and I were able to find that with no insurance, the hormonal IUD costs $843.60. We quickly calculated that at 20 bucks a month for the pill, after 5 years, the IUD would end up being significantly cheaper – even before taking her insurance in to account.

A few weeks later my sister excitedly told me that she had discussed the IUD with her doctor who had informed her that it would only cost around $200 with her type of insurance. She had already scheduled her appointment to have it placed.

While the procedure itself went off without a hitch, the next phone call I received was of a decidedly different tone. She had just received her bill in the mail – a bill for $1100!

“How is it possible that it cost so much more than they said it would?”

“I don’t know!”

“Did you call the insurance company?”

“Yes. They covered some of it, but the $1100 left is for me to pay.”

My sister was frantic. As a new graduate just entering the workforce, she was living pay check to pay check. There was no way she could come up with an extra $900 at the drop of a hat.
But something didn’t add up. How could this device and the procedure cost so much more than all the information had said it would? “Let me talk to them for you,” I said.

After weeks of un-returned phone calls and department transfers, I was finally able to secure a billing inquiry. The inquiry itself took months. By the end of the process my sister was fending off collection calls from the hospital trying to explain that we were disputing the charge. In the end it all came down to a coding error on the part of the physician. The visit had been erroneously coded as an inpatient procedure. The amount of the correct bill? One hundred and fifty dollars.

While it would be easy to chalk this up as a happy ending, I think the moral here is a bit different. My sister did everything right. She researched the procedure on her own, discussed it with her doctor, and called her insurance company when the bill was different than she expected. I am not sure many of us could claim to be that involved in our own healthcare and yet had circumstances been even slightly different, she would have ended up paying $900 more than she was supposed to.

I, like most Americans, didn’t even know what medical coding was or how it worked until I started working in the field. Yet when I go to the grocery store, or buy plane tickets online, I know exactly how much it is going to cost me before the sale is final. It seems to me that if providers, patients, and payers all had access to the same cost information up front, it would drastically improve communication, reduce the potential to overlook errors, and better allow patients to play a more decisive role in their own health care.

Michaela Dinan, a PhD student in health policy and management at the University of North Carolina.

On Labor Day Costs of Care, a Boston-based nonprofit, offerred $1000 prizes for the best anecdotes from doctors and patients that illustrate the importance of cost-awareness in medicine. Two months later we received 115 submissions from all over the country – New York to California, Texas to North Dakota, Alaska to Oklahoma. We feel these stories are poignant because they put a face on some of the known shortcomings of our system, but also because they unveil how commonplace and pervasive these types of stories are. To learn more about the contest and read more of our stories please visit www.CostsOfCare.org (Twitter: @CostsOfCare).

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DesmotivacionesCindy BurkeAJFBertsteve Recent comment authors
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Desmotivaciones
Guest

I agree with your details , fantastic post.

Cindy Burke
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Cindy Burke

My new insurance does not cover preventive yearly physicals so I did not make an appointment when I normally would have. Then I got a letter from my doctor’s office that he could no longer refill prescriptions unless I came in for tests so I did. Now the insurance is denying payment and so far I have been unable to get the office to re-code the charges as doctor ordered. Now a collection agency is threatening my credit.

Bert
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Bert

What Is Guardian Life Insurance Trying to Hide? Guardian Life Insurance Company of America, through its outside counsel law firm, Leader & Berkon LLP, deposed a non-party witness, John Zaher of The Public Relations and Marketing Group, LLC. The deposition, which was sought under the guise of determining if a confidentiality agreement was violated, had no legal basis related to Dr. Berton Forman’s $12 million lawsuit against Guardian, but was instead held merely to harass and intimidate Dr. Forman and Mr. Zaher as a way to prevent them from exercising their rights to free speech and to educate the public… Read more »

AJF
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AJF

A key point is that EVERYONE does not have access to the same information and is not even charged the same for identical procedures and office visits. And often the health care provider does not even know all the other fees and costs that will be billed to the patient! This is why, as much as I would like to, I do not choose a health plan where I can “shop around” for various services even though it would cost less – both for me and my employer. There is no way for me to know if I am paying… Read more »

nate
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nate

“It is a good thing we don’t use a coding system to buy food.”
What is the nutritional info on the back? I love the one on water showing how poor for your health drinking water is. FDA? USDA coding your beef. What size eggs do you prefer? Are you into certified organic? Can you make champaign anywhere but france?
The correct question is how can food be so requlated and suffer under so much labeling, reportinm, and inspection yet still not outpace inflation like healthcare? Maybe it has something to do with people, in most cases, buy their own food?

imdoc
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imdoc

It is a good thing we don’t use a coding system to buy food. We would all starve waiting for the glitches to get solved.

steve
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steve

” The section on injections alone is 150 pages. And federal regulations stretch for 150,000 pages in small print.”
Medicare patients getting IUDs? Wow.
Steve

John Ballard
Guest

As I said…
EOM

pcp
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pcp

“I think the real travesty here is that nobody at either the physician’s office or the insurer would pick up the phone”
Sounds like this was all done through a large hopital/physician complex. The doc may not even have been on the same continent as his billing department. Lots of posters here hate small practices, but there are advantages to a situation in which the doc talks to her insurance clerk multiple times daily.

twa
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twa

Oh please – funny how a story like this can be used to justify any number of positions – from the evils of HIT, “Obamacare”, and the power of “consumer-driven” care. All I see are a bunch of people all shifting blame to someone else. No one is willing to take any responsibility for improvement of the health system. Its always someone else’s fault.

tim
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tim

Sounds like consumer-driven care works. The money was coming out of her pocket, so she took the trouble to get it corrected.

pcp
Guest
pcp

“No law says you have to join PPOs and bill on patients behalf, you can always go back to cash.”
Am gradually moving in that direction with more patient groups. Works great for me. But the horror stories I hear from patients about trying to get reimbursed by their insurers are unbelievable, and now there’s nothing I can do to help them.

imdoc
Guest
imdoc

Looks like the author got a real life lesson in ‘healthcare policy and management’. Hopefully she can find a way to help change an absurdly dysfunctional system.

Sammuel Alexendria
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Sammuel Alexendria
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