Medical Billing & Insurance Woes: "Payment reduced per sanctioning policy" and other mysteries

One of the most frustrating problems when you are sick is sorting out the medical billing/health insurance mess.

One or two people have told me that their health insurance companies were a dream to work with, paid bills promptly, and provided clear documentation of the status of their claims.

Unfortunately, that experience is the rare exception rather than the rule. The first time I went through cancer treatment, I was reduced to tears by the medical bills and insurance statements.

Here’s what I wrote in Jeanne’s Diary almost eight years ago:

When the medical bills and insurance statements first started coming in the mail, I'd open them and cry. Later, as a trickle became a flood, I didn't even open them, I just stuck them in a red file folder that grew and grew until it was three inches thick.

The first piece of mail that made me cry was a statement from my insurance company informing me they wouldn't pay any part of a $1,700 bill. On the bottom of the statement they included an incomprehensible explanation, but I knew it was an error. I also knew it was going to take phone calls and letters to both the insurance company and the health-care provider to straighten it out. Who had the energy? Not me.

As the statements continued to come in, I was befuddled by bills from providers I'd never heard of, charges that didn't add up, errors in the calculation of my deductible, and—always—codes and cryptic explanations that I couldn't understand.

My favorite is "Payment reduced per sanctioning policy." What's a sanctioning policy? My health insurance company, United Healthcare of Minnesota, is sanctioning me for spending too much money?

To the Rescue

Help arrived in the person of Kelly Calden. I found Kelly in the Yellow Pages under "Insurance Claims Processing-Medical." Kelly came to my house and didn't even flinch when she saw the stack of unopened bills and statements. "Some people give me mounds of envelopes in laundry baskets," she says. "Some people have not dealt with the medical bills for two or three years."

First, she sorted out the mess, matching statements from providers with explanations of benefits from my insurance company. She threw away duplicates, filled out forms and sent in the ones that hadn't been submitted to my insurance company. Then, she checked for errors. She found several in the calculation of deductibles, and asked my insurance company to correct them and recalculate payments to the doctors and the hospital. She saved me $630 on that first visit.

Kelly has called or written to all of my health-care providers and has a contact at each one. She's tracking everything, following up regularly by phone or fax. "I let them know we're working on it and that we're not deadbeats," she says. "It's all very positive and very nice."

If a claim is denied, she doesn't stop working. "I don't accept the first denial," she says. "I question it on the phone and if I'm not satisfied I fax a note or letter asking for a response in writing."

What I get is a list of bills to pay, complete with addressed, stamped envelopes. I also get a clear, brief status report. Kelly charges $25 an hour, and so far her services have cost me $150. She expects to put in two to three hours a month handling my claims over the next couple of months.

Back to 2007
Kelly has moved to Atlanta, and I don’t know if she is doing the same work there. During the years that she handled my medical bills, I learned a lot, and now I handle them myself.

I don’t cry so easily anymore. And I’m much more cynical about hospitals and insurance companies.

But it’s still not easy. There are always mistakes, and long waits on the phone, and stalemates when both sides (provider and insurance company) refuse to take the first move to sort out a problem.

My advice, if you are just starting cancer treatment, is to find someone, either a professional like Kelly or a friend or family member with the necessary skills (bookkeeping, patience, and persistence are probably the major ones) to handle the medical bills for you.

It is too frustrating at a time when you need to concentrate on your health and wellbeing, to have to fight over mistakes in your medical bills.

And there will be mistakes, big ones. I am only sorry that Kelly and I did not keep track of the number of errors she found when she worked for me. The thing to note is that these could not have been random errors. If they had been, there would have been errors in my favor about half the time.

But as I recall, we only ONCE found an error in my favor made by a health insurance company or provider.

More to come on all of this, including charity care and writing letters to providers.

@ Jeanne Sather 2007. All rights reserved.