Accurate Medical Billing & Holding Providers Accountable: A Success Story 

February 19, 2014

Mark L. Friedman, MD, FACEP, FACP

A First Stop Health  client recently called us about a problem--an expensive problem. A hospital was dunning them for an emergency room bill of more than $100,000. They asked if we could help. 

The answer? Yes.

Over the years, I have learned that the more outrageous a medical billing situation sounds, the more likely it involves an error of some sort.

The confusion in this case revolved around Medicare's "short stay rules." The hospital, fearing the wrath of Medicare's auditors, had billed this one-day case as "outpatient observation," which shifted the bill from Medicare Part A (inpatient) to Medicare Part B (outpatient).

Due to a glitch in this person's insurance coverage, the patient was not covered under Part B and the claim was therefore rejected by Medicare. Since Medicare rejected the claim, the commercial insurer, which was the secondary payer, also rejected the claim. The hospital then assumed that the patient should be personally responsible for this bill. 

Armed with copies of the bills, I picked up the phone. After explaining the hospital's error (they had misinterpreted Medicare rules regarding inpatient vs outpatient), to an individual in billing, then to the collection agency, and finally to the finance office at the hospital, the hospital rebilled the case properly to the insurers.

The confusion between inpatient and outpatient is only one of many situations that can saddle people with huge financial liabilities despite having insurance to protect them.

Originally published Feb 19, 2014 4:51:00 PM.