February 13, 2006

How to Track Medical Bills Efficiently

Click. Hey, a Billing Error!
February 12, 2006
Wall Street Journal

Tracking medical bills and payments is a complicated task that even the most organized people can find daunting. But new software tools can help.

Rick and Barrie Rappaport of Chicago struggled for years to gain control of the rush of medical bills associated with their daughter's rare genetic disorder. At one point, they tried logging all their information on an Excel spreadsheet. When that proved cumbersome, they organized file folders for each member of the family and the corresponding doctors.

No matter what they tried, "it was never easy," says Barrie Rappaport, a book-publishing analyst. "I always found it overwhelming."

To resolve this problem, people like the Rappaports are turning to software programs that allow them to easily view their medical bills in relation to their insurance coverage and the payments they have made. These tools can help people identify billing errors. They can also do much more, including flagging appointments and helping people determine whether they are eligible to deduct medical expenses on their tax returns.

A Growing Responsibility

Gaining control of medical spending is an increasingly important part of managing household finances. As medical costs rise, consumers are taking on a greater share of the expenses, with higher deductibles and co-pays. Meanwhile, missed payments can have a deleterious effect on consumers' credit ratings.

There are at least three software products that can help: Medical Expense Wizard ($59.95) was introduced in 2003 by medical administrator Pamela Selby-Moore, who is also a cancer survivor. Software giant Intuit launched Quicken Medical Expense Manager ($49.99) last winter, followed by SimoHealth, which launched a free product last summer.

When you receive a medical service, you typically receive a bill -- and may be asked to pay immediately. You also receive a corresponding "explanation of benefits," or EOB, from the insurance company. The EOB is not a bill. It simply tells you what insurance will cover.

Ideally, you shouldn't pay your medical bills until you have compared them with the corresponding EOBs to make sure everything lines up. Some people don't check their bills against the EOBs. Even worse, some patients mistakenly pay the EOB amount in addition to the amount billed.

Multiple Bills

Another complication: It can take months for all the related bills to arrive. A routine doctor's visit or minor medical procedure can result in a slew of bills from a multitude of service providers, including the doctor and laboratories.

The software programs allow people to enter the information from their EOBs and their medical bills in the same place. This way, people can keep track of the bills and EOBs that have yet to arrive. Once they have everything, consumers can more easily spot billing errors.

These programs also can help at tax time. Taxpayers can take a deduction when their total medical spending for the year exceeds 7.5% of their adjusted gross income. The programs tally up your spending and can identify which medical expenses qualify.

Medical Expense Wizard and Quicken Medical Expense Manager offer more bells and whistles than the free SimoHealth product. Both Quicken and Medical Expense Wizard provide pre-formatted dispute letters that allow people who spot billing errors to easily address the problem. People using those two programs can also set reminders when phone calls need to be made or bills need to be paid.

Meanwhile, the Quicken and SimoHealth programs have features to help people manage their flexible spending accounts.

For more information and to order or download the software, see www.medicalexpensewizard.com, www.quickenmedical.com and www.simohealth.com.

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