When your mechanic makes an error on your invoice, the stakes are low — maybe a $20 part you didn’t need. When a hospital billing department makes an error, the stakes are a different category entirely. Medical billing errors can mean thousands of dollars in charges you don’t owe — and most patients pay them without question.
The research on how often errors occur paints a striking picture.
What Does the Research Say?
Medical billing is notoriously error-prone. While a definitive, methodologically rigorous national study is difficult to conduct (billing records are proprietary and complex), available data consistently points to a high error rate:
Audit and industry data:
- The Medical Billing Advocates of America, a professional organization of billing advocates, has reported error rates of around 80% of medical bills containing at least one mistake
- Equifax’s Healthcare division has estimated error rates as high as 80% in medical bills
- A 2020 study published in the Journal of the American Medical Association found that among the most common outpatient bills, significant coding inaccuracies were common
Government audits:
- The Office of Inspector General (OIG) for Health and Human Services conducts regular audits of Medicare billing and consistently finds that hospitals and providers bill incorrectly for a meaningful percentage of claims — in some audits, error rates for specific claim types exceeded 30–50%
- CMS Medicare improper payment rates for hospital services have run between 5–10% annually — a figure covering only detected systematic errors
What “error” means in context: The 80% figure often cited includes any billing discrepancy, from minor administrative errors to significant overcharges. More conservative estimates focus specifically on charges that result in patients being overbilled. Even by conservative measures, the error rate is substantial.
Most Common Types of Medical Billing Errors
1. Duplicate Charges
The same service billed twice — sometimes under different codes, sometimes under the same code. This is one of the most common and easiest-to-spot errors.
2. Upcoding
Billing for a more expensive version of a service than was actually provided. A routine office visit coded as a complex consultation. A simple procedure coded as a complex one. Upcoding is a form of fraud when intentional; when unintentional, it’s still an overcharge you’re entitled to dispute.
3. Unbundling
Some procedures are meant to be billed together as a package at a set rate. “Unbundling” means billing each component separately at individual rates — resulting in a higher total charge. Medicare and most insurers have rules prohibiting unbundling.
4. Incorrect Patient or Insurance Information
A wrong date of birth, wrong insurance ID, wrong policy number, or wrong network code can cause claims to be processed incorrectly — leading to improper denials or wrong patient billing.
5. Services Not Rendered
Charges for services you didn’t receive. This can range from a supply item checked off on a list but never used, to charges for a physician who never actually saw you during your stay.
6. Operating Room or Recovery Time Discrepancies
Hospital charges for OR time are often calculated in 15-minute increments and billed based on anesthesia records. Overbilling by one or two increments is common and can add hundreds of dollars.
7. Coding Errors
Medical procedures are billed using CPT codes, and diagnoses using ICD-10 codes. An incorrect code — sometimes a single digit transposed — can result in the wrong service being billed, a service being denied by insurance, or a completely different procedure appearing on your bill.
8. Balance Billing Errors
Billing patients for the difference between a provider’s billed charge and what insurance paid, when the provider is in-network and has agreed to accept the insurance rate. This is not always legal, and is specifically prohibited in many situations by the No Surprises Act.
How to Find Errors on Your Own Bill
You don’t need a professional medical billing advocate to catch the most common errors. Here’s the process:
Step 1: Request your itemized bill The one-page summary bill hospitals typically send first hides the details. Call billing and ask for an “itemized bill with all CPT codes.” See our guide to requesting an itemized bill and a copy-paste letter template.
Step 2: Request your Explanation of Benefits Your insurer’s EOB is the other half of the picture. It shows what was billed to insurance, what insurance paid, and what they say you owe. Compare every line on the itemized bill against the EOB.
Step 3: Use our Medical Bill Glossary CPT codes and billing terminology are not designed for patients. Our glossary decodes the most common codes and charges so you can understand what you’re looking at.
Step 4: Check for the most common errors Go line by line and ask:
- Is any service billed more than once?
- Are there services I don’t recognize or don’t remember receiving?
- Do the dates and quantities make sense?
- Does the level of service match what actually happened?
Step 5: Dispute in writing For any error you identify, submit a written dispute. See our dispute letter template for exact language.
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FAQ
Q: If medical billing errors are so common, why don’t hospitals fix them? A: The complexity of the billing system — with thousands of codes, multiple payers with different rules, and high staff turnover in billing departments — makes errors endemic. Additionally, the incentive structure doesn’t favor self-correction: most patients pay without questioning, so errors that result in overbilling often persist.
Q: Does the billing error rate mean hospitals are committing fraud? A: Not necessarily. The majority of billing errors are administrative mistakes rather than intentional fraud. Coding is complex, and honest errors are common. However, systematic patterns of upcoding or unbundling can rise to the level of fraud. The OIG and DOJ have prosecuted numerous hospitals for systematic billing fraud.
Q: My bill looked right at first glance. Should I still get an itemized bill? A: Yes. The summary bill is specifically designed to show totals, not individual charges. Errors at the line-item level — a duplicate supply charge, a miscoded procedure — won’t appear on the summary. An itemized bill is the only way to check.
Q: What if I find an error but the hospital says I’m wrong? A: Dispute it formally in writing and provide documentation. Request the specific medical records that support the charge. If the hospital maintains the charge is correct and you believe otherwise, escalate to your state insurance commissioner or file a complaint with the CFPB.
Q: Can I get a refund if I already paid a bill that had errors? A: Yes. There’s no rule that payment waives your right to a refund for erroneous charges. Dispute the specific items in writing, document that you paid in full, and request a refund of the overcharged amount. If you’re unsuccessful, your state insurance commissioner may be able to help.