We would never accept this in any other industry.

Imagine receiving a restaurant bill with mysterious charges for dishes you never ordered, ingredients that weren't used, and prices that don't match the menu. You'd probably question it immediately, right? Now imagine this happens almost every time you eat out. Welcome to the world of medical billing, where studies have shown that 80% of medical bills contain errors, and the average patient overpays by hundreds or even thousands of dollars.

Let's dive into why this broken system persists and what you can do about it.

A system designed for complexity, not clarity

The US healthcare billing system wasn't built with the patient in mind. Instead, it evolved as a complex negotiation between insurance companies, healthcare providers, and government regulations. This has resulted in a labyrinth of codes, rules, and procedures that even industry professionals struggle to navigate.

Medical billing typically follows these steps:

1. You receive medical care

2. The provider documents services rendered

3. A medical coder translates these services into billing codes

4. These codes are sent to your insurance company

5. Your insurance processes the claim based on your specific plan

6. You receive a bill for the remainder

At each of these steps, errors can (and frequently do) occur. But why so many?

The perfect storm for billing errors

1. Too many cooks in the kitchen

Think about how many people touch your medical bill: doctors, nurses, medical assistants, front desk staff, coding specialists, billing departments, insurance representatives... the list goes on. Each handoff creates an opportunity for miscommunication or data entry errors. Imagine trying to play a game of telephone with 10+ people, except instead of a simple phrase, you're passing along complex medical information.

2. A mind-boggling coding system

Medical billing relies on tens of thousands of distinct procedure codes (CPT), diagnosis codes (ICD-10), and medication codes (NDC). For perspective, there are over 70,000 ICD-10 diagnosis codes alone — including codes for "struck by orca" and "burn due to water skis on fire." With this level of specificity and volume, it's no wonder mistakes happen regularly.

3. Outdated technology and processes

While tech startups obsess over user experience and efficiency, many healthcare organizations are running on decades-old software systems that don't communicate with each other. Picture trying to run the latest video game on a computer from 2002 — that's essentially what many hospitals are attempting to do with their billing systems.

4. Misaligned incentives

Medical billing often follows what we might call "strategic complexity." Insurance companies benefit when patients don't understand their coverage. Hospitals may benefit from upcoding (billing for more complex services than were provided). And since most patients don't scrutinize their bills, there's little incentive to invest in fixing the system.

Common errors to watch for:

• Duplicate charges: Being billed twice for the same service or medication

• Upcoding: Being charged for a more complex service than you received

• Unbundling: Being charged separately for procedures that should be billed together at a lower rate

• Incorrect patient information: Your insurance was rejected because your name was misspelled

• Canceled services: Being charged for tests or procedures that were ordered but never performed

What you can do about it

The solution to this massive problem begins with awareness. Here are some simple steps you can take to protect yourself:

1. Always request an itemized bill - Don't accept a summary of charges. Ask for every service, medication, and supply to be listed separately with corresponding codes.

2. Compare your bill to your EOB (Explanation of Benefits) - Your insurance company sends this document showing what they paid and what you owe. These should match.

3. Question anything you don't recognize - Don't be afraid to call and ask, "What is this charge for?" If you don't remember receiving a service, say so.

4. Appeal denied claims - Insurance companies often deny claims on first submission. Up to 50% of appeals succeed.

5. Consider professional help for complicated bills - Companies like Avelis have built AI that can handle the entire process of double-checking your bill, catching errors, and negotiating with the hospital / provider.

The future of medical billing

The good news is that awareness about this problem is growing. Some hospitals are implementing clearer billing practices, and regulatory changes are slowly pushing the industry toward greater accountability.

But until these changes become widespread, the best protection is vigilance. Remember that restaurant bill with errors? You'd speak up. Your medical bills deserve the same scrutiny.

After all, your health is too important to be compromised by administrative errors. And your wallet will thank you too.