An insider's guide to medical bills

This post comes from Gerri Detweiler at partner site Credit.com.

When Heather's daughter developed a reaction to an immunization, she took her back to the doctor. She knew she should not have been charged for the second visit. After all, she spent 14 years working in medical billing and understood that the follow-up incidental visit should have been covered given the circumstances.

However, the claim wasn't properly coded, and she found herself in the shoes of many of the patients she had helped over the years, trying to fix a medical billing mistake.

Heather, who is leaving the field to pursue an accounting career, says that medical billing snafus are all too common. But don't automatically blame the billing clerk, she says. Oftentimes, mistakes are made before the account even gets to the person responsible for submitting the claim to the insurance company.

"The number one problem I (saw) was not that the patient had not provided proper billing information, but that front-desk employees failed to update the system," she explains. As part of her job, she would research records and call patients before she sent accounts to collections and often discovered a mistake that allowed her to properly bill the insurer.

The problem may be getting worse, she worries, as medical practices consolidate into larger ones. She believes medical billing staff members with credible expertise are often underpaid and underappreciated, but at the same time she understands the frustration of the patients. "They have jobs, lives and pay substantial premiums, only to be made responsible for billing errors made by medical billers," she wrote in a comment on a previous Credit.com story about these problems.

She shares these tips for avoiding a medical billing nightmare:

Verify your file contains up-to-date, correct insurance information. The person at the front desk is often juggling multiple tasks and may not carefully check to make sure your information is correct. So while you are waiting to see the physician, you can double-check yourself.

"Ask your (medical) provider for a printout of the 'patient profile information screen' from their system, which should list all of your insurance information," she recommends. Make sure it's 100% accurate. One insurance company may have hundreds of addresses and departments listed for processing claims, she explains, and if the claim isn't submitted to it correctly, the claim may be kicked back.

Don't assume that because you are still with the same insurance company everything is the same. If you received a new insurance card since your last visit, you'll want to make sure your file is updated. The billing address or other key information may have changed, making it important that you update the information. Keep the corrected and dated patient profile information screen for your records until you have verified the bill for that date has cleared. (Post continues below.)

Watch your mail. After you have seen the provider, watch for an Explanation of Benefits statement from your insurance carrier that will list your financial responsibility. You should receive it within 30 to 45 days after your visit. If it doesn't arrive, contact your provider immediately to find out why your insurance company has not been billed.

When you do receive the EOB, you may find it confusing. If you do, call your insurance company and ask it to help you decipher the EOB.

If you believe there is a mistake, you'll want to contact the provider's billing office. When you do call, don't be surprised if the person you speak to within the billing office doesn't fully understand what's going on. "You are not usually talking with the person who actually does the billing," she says. "The person who you are talking with is likely a customer service representative, and they may know very little about the process that has taken place or needs to take place."

If you don't think your problem is being properly handled, Heather recommends that you:

1. Call the provider's office and ask for the exact amount of the services provided and a breakdown of the individual charges.
2. Call the insurance company and ask if it has a receipt of that claim.
3. Then ask the insurance company if it will contact the provider on your behalf.

Don't let them "balance bill" you. Medical providers who participate in insurance networks agree to a fee schedule, which is often changed and updated each year as a part of the provider's "recredentialing process." Along with the contract, the health care provider is given a fee schedule that shows what the allowable amount for each procedure (designated by a CPT code) will be, Heather explains. By accepting this agreement, the provider in turn agrees not to bill to the insurance carrier's customers more than the allowable amount.

For example: A "doctor's visit 99213" is a pretty standard office visit. The physician charges $110, the insurance carrier allows $58, and there may be a $30 co-pay. The insurance company will pay the provider $28, the patient pays $30 and the provider contractually must write off or, as they call it, "discount" the remaining $52 from the patient's account.

"This is more critical with expensive procedures like lab work, X-rays and the like," Heather says, where charges may run in the hundreds or even thousands of dollars.

In addition, providers who are contracted with specific insurance companies must typically file a claim with the insurance company within 90 to 120 days, depending on the insurance carrier's contract. If they fail to do so, they can't hold the patient responsible for those charges. If a provider tries to "balance bill" you, either for an amount it is supposed to discount, or because it failed to bill in a timely manner, enlist your insurance company's help.

"Bottom line: Health care providers sign contracts with insurance carriers to develop their patient pool, and patients unaware of the provider's contractual obligation can unknowingly be held responsible," Heather says.

Plan ahead. Because hospital bills in particular can be very large and confusing, it's a good idea to meet with the billing department in advance to go over your insurance information. At that time, ask for a list of expected procedures and a ballpark estimate of the anticipated costs. This is typically done for self-pay patients; insist upon the same for you. Then call your insurance company to also go over with it what's covered and what is not. "You are the insurance company's customer," Heather insists. It should have a fee schedule that shows what it will pay.

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If you ended up in the hospital unexpectedly and are stuck with a confusing or large bill, make an appointment to visit with the billing department afterward to go over the charges, to get answers to your questions and to make payment arrangements if possible. Hospitals know some patients have no intention of paying, so making the extra effort to show you want to resolve your bill can pay off.

If it sounds like a lot of work, it is. But it can be worth it if it helps you avoid a collection account on your credit reports for the next seven years.

In Heather's case, she ended up paying the additional co-pay rather than fight it. She knows that if she can't fix a mistake, it must be that much harder for the average patient. "There needs to be a place for patients to go where they have an advocate," she says. "If you've paid your insurance and provided your information, you shouldn't be at their mercy."

More on Credit.com and MSN Money:

• Why medical collections need an overhaul
• The complete guide to disputing credit report mistakes
• How to negotiate your medical bills
• What if you got hit by a bus?
• Survival guide for the uninsured
• 10 tips to save on prescriptions