FacebookTwitterGoogle+RedditEmail

The Crime of Overbilling Healthcare

Over twenty years ago, Pat Palmer, in her own words, “stumbled upon a $400 overcharge in a bill my father received for a routine medical procedure.” That might have become the costliest “overcharge” the gouging, overbilling health care industry ever inflicted on itself. Because it led Ms. Palmer, whom Steve Brill (author of the Time Magazine cover story, “Why Medical Bills are Killing Us,” April 4, 2013) called “one of my earliest tutors as I tried to figure out the dysfunctional world of medical economics and billing,” to start a business investigating the overbilling of patients.

Located in Roanoke, Virginia, Medical Billing Advocates of America (MBAA) (billadvocates.com) makes money by saving patients money. No savings, no charge. In twenty years, she has collected a multitude of cases of doctors, hospitals and insurance companies overcharging. This evidence reflects routine, everyday overbilling in the many billions of dollars a year.begging slogans3

How extensive is this commercial crime wave? The nation’s expert on computerized billing fraud, Malcolm Sparrow, who is an applied mathematician at Harvard, estimates medical billing fraud adds up to a minimum sum of $270 billion a year or at least ten percent of all health care expenses. His classic book, License to Steal, showed that these ripoffs are not just clerical errors or computer malfunctions. The systemic fraud goes far beyond the organized criminal syndicates defrauding Medicare that the FBI raids once in a while. The frauds are designed with corporate interests in mind to filch your wallet directly or under the nose of unobservant insurers, from the very design of billing statements to the manipulation of codes.

Pat Palmer is out with a paperback titled Surviving Your Medical Bills, which is self-published by her firm, MBAA. Ms. Palmer explained she almost gave up on “all the rules and regulations that no one is enforcing.” It’s a good thing she didn’t. Instead, Ms. Palmer decided to rile up the patients and their families directly with her book by describing how outrageously brazen billing practices are (not just an aberration) and showing how people can become common-sense investigators if they receive these shocking bills.

Start with the fact that about eighty percent of all medical bills contain errors, with the average error being $1,300. Most of these overbillings favor, unsurprisingly, the sellers (euphemistically called “the providers”). Ms. Palmer says the situation has been getting worse. With the number of diagnostic codes growing from 17,000 to about 60,000 under Obamacare, to supposedly improve efficiency, the system has become even more complicated, with hospitals and few others knowing how to game or beat the system.

She lists many of the ways that medical bills are hugely inflated, using the technique known as unbundling, when tests and procedures are broken down into their individual components, which allows for double or triple billing. Some hospitals also, by their own admission, incorporate their overhead in the itemized pricing of even simple items like $20 aspirins or $15 disposable razors.

An example of double-billing technique is when a patient is charged thousands of dollars a day for being in an intensive care unit (ICU) and then also charged for the ventilator which is already factored into the cost of the ICU. Hospitals charge for their mistakes as in the radiology department. Another example is when they charge, say $12, for each time a nurse brings you an aspirin, even though you’re paying for these hospital services in your room rate. Transporting that aspirin is called an “oral administration fee.” Gobbleygook names are omnipresent in these bills.

You can get these itemizations by refusing to accept a “summary bill,” and ask, as is your right under state law, to receive an itemized bill which sometimes will extend to pages of computer printout in inscrutable code that you can then demand an explanation in ordinary English.

Hospital billings for similar services or items vary wildly and arbitrarily. Ms. Palmer found a hospital charging $444.78 for a 10-milligram vial of the neuromuscular blocking drug Norcuron. She then found another hospital “charging $17.90 for the very same 10-milligram vial.”

In her book, she often refers to documented examples of massive overbilling on major surgeries, major medical equipment and lesser items. People have been charged for phantom procedures, nominal physician visits, for hospital employees transporting specimens down a few floors to the labs. Patients, are charged for omnibus services and products, then charged again and again for the pieces.

Now obviously there are variations as well in levels of honesty and fraud between institutions and practices. But overall, what Palmer and Sparrow are writing about is, arguably, our country’s biggest commercial crime wave.

However, strangely, prosecutors reserve their few grand jury indictments largely for the criminal underworld stealing from Medicare or other insurers. For the corporate establishment, there are always the easy ways out such as confessing error, but not intent, when caught or arguing reasonable industry practices. They quickly correct the specific bill of its offending bloat and satisfy the complaining patient, but nothing changes overall.

Clearly the current criminal laws do not adequately prevent such computerized theft and need to be amended to account for this fraud. Furthermore, if our nation followed the example of other countries and transitioned to a universal full Medicare for-all-system, this would end fee for service and the Pat Palmers would be out of business (see singlepayeraction.org for more information).

The main point of this book is that if enough outraged or concerned patients can follow Pat Palmer’s clear roadmap and challenge the bilkers, maybe the law enforcers will get the message and maybe the lawmakers will give these law enforcers the budgets to stop these widespread corporate crimes.

Ralph Nader’s latest book is: Unstoppable: the Emerging Left-Right Alliance to Dismantle the Corporate State.

More articles by:

Ralph Nader is a consumer advocate, lawyer and author of Only the Super-Rich Can Save Us! 

Weekend Edition
November 16, 2018
Friday - Sunday
Jonah Raskin
A California Jew in a Time of Anti-Semitism
Andrew Levine
Whither the Melting Pot?
Joshua Frank
Climate Change and Wildfires: The New Western Travesty
Nick Pemberton
The Revolution’s Here, Please Excuse Me While I Laugh
T.J. Coles
Israel Cannot Use Violent Self-Defense While Occupying Gaza
Rob Urie
Nuclear Weapons are a Nightmare Made in America
Paul Street
Barack von Obamenburg, Herr Donald, and Big Capitalist Hypocrisy: On How Fascism Happens
Jeffrey St. Clair
Roaming Charges: Fire is Sweeping Our Very Streets Today
Aidan O'Brien
Ireland’s New President, Other European Fools and the Abyss 
Pete Dolack
“Winners” in Amazon Sweepstakes Sure to be the Losers
Richard Eskow
Amazon, Go Home! Billions for Working People, But Not One Cent For Tribute
Ramzy Baroud
In Breach of Human Rights, Netanyahu Supports the Death Penalty against Palestinians
Brian Terrell
Ending the War in Yemen- Congressional Resolution is Not Enough!
John Laforge
Woolsey Fire Burns Toxic Santa Susana Reactor Site
Ralph Nader
The War Over Words: Republicans Easily Defeat the Democrats
M. G. Piety
Reading Plato in the Time of the Oligarchs
Rafael Correa
Ecuador’s Soft Coup and Political Persecution
Brian Cloughley
Aid Projects Can Work, But Not “Head-Smacking Stupid Ones”
David Swanson
A Tale of Two Marines
Robert Fantina
Democrats and the Mid-Term Elections
Joseph Flatley
The Fascist Creep: How Conspiracy Theories and an Unhinged President Created an Anti-Semitic Terrorist
Joseph Natoli
Twitter: Fast Track to the Id
William Hawes
Baselines for Activism: Brecht’s Stance, the New Science, and Planting Seeds
Bob Wing
Toward Racial Justice and a Third Reconstruction
Ron Jacobs
Hunter S. Thompson: Chronicling the Republic’s Fall
Oscar Gonzalez
Stan Lee and a Barrio Kid
Jack Rasmus
Election 2018 and the Unraveling of America
Sam Pizzigati
The Democrats Won Big, But Will They Go Bold?
Yves Engler
Canada and Saudi Arabia: Friends or Enemies?
Cesar Chelala
Can El Paso be a Model for Healing?
Mike Ferner
The Tragically Misnamed Paris Peace Conference
Barry Lando
Trump’s Enablers: Appalling Parallels
Ariel Dorfman
The Boy Who Taught Me About War and Peace
Binoy Kampmark
The Disgruntled Former Prime Minister
Faisal Khan
Is Dubai Really a Destination of Choice?
Arnold August
The Importance of Néstor García Iturbe, Cuban Intellectual
James Munson
An Indecisive War To End All Wars, I Mean the Midterm Elections
Nyla Ali Khan
Women as Repositories of Communal Values and Cultural Traditions
Dan Bacher
Judge Orders Moratorium on Offshore Fracking in Federal Waters off California
Christopher Brauchli
When Depravity Wins
Robby Sherwin
Here’s an Idea
Susan Block
Cucks, Cuckolding and Campaign Management
Louis Proyect
The Mafia and the Class Struggle (Part Two)
David Yearsley
Smoke on the Water: Jazz in San Francisco
Elliot Sperber
All of Those Bezos
FacebookTwitterGoogle+RedditEmail