Billing mistakes happen in any industry. But mistakes happen a lot more than they should in the health care industry. Not long ago, a group of auditors working for medical insurers found mistakes in nine out of ten hospital bills they looked at. Another audit by Equifax, the credit agency, found an average of $1,300 in mistakes on bills over $10,000.
And, of course, these boo-boos always flow one way. In its beta phase, Remedy, a new service that roots out billing mistakes for patients, pored over thousands of bills and found precisely none benefitting patients, according to CEO Victor Echevarria. The most egregious: A man who was charged thousands of dollars for a pregnancy test.
Remedy, which launches today, is a bit like Mint.com, the automated financial manager that links to your bank account. Giving up your username and password, you hook in Remedy to your health insurer's website, then it scours your billing history and incoming bills for mistakes. It claims people can save $1,000 a year on average.
Echevarria previously worked at TaskRabbit and initially got involved with Remedy because he saw a business opportunity. Then, a family experience transformed him into a billing hawk with a "personal vendetta," he says. A week after founding Remedy, his eight-year-old son was struck down by a febrile seizure. He was rushed to hospital and thankfully everything was fine. But then the bills started appearing: a total of $12,000, including the $3,000 ambulance fee and the $800 E.R. cost. Naturally, he questioned the amount using Remedy and, sure enough, it was inaccurate. The Echevarrias ended up getting the whole thing dismissed.
"Most of the time the bill you get in the mail is really obfuscated and opaque. You take an immensely complicated system with all sorts of errors and you combine that with the higher deductible world we have now and people are needlessly spending thousands of dollars out of pocket," Echevarria says.
In the Echevarrias's case, the mistakes included a misspelled name that stopped an insurer paying a provider's claim. Errors often occur when procedures are translated into medical codes, then sent on to specialist billing companies that send on claims to insurers, Echevarria says. There are 96 possible ways to code a coronary angioplasty procedure, for example.
Remedy is a hybrid: it employs human billing specialists but is also developing an automated system to look for errors. It makes money by taking 20% of the savings up to $99 on each bill. "We hope to offer a layer of protection between you and the broken billing system," Echevarria says.
Correction: This article originally stated that Remedy takes 10% of the savings up to $99 on each bill—that number is 20%.
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