As an administrator at a cardiology practice, Bill Watermeier decided how much to charge for procedures such as nuclear stress tests.

Arbitrarily, he now admits.

First, he'd find out what Medicare paid for the procedure. Then he'd "double, triple or quadruple" that amount.

Later, he'd review how insurers reimbursed for those services.

"I'd see I'd get full reimbursement, and I'd think, 'I'm not charging enough,'" he says, now 10 years removed from the job. "So I'd boost it upward.

"That's the way it's done," he says. "And there's got to be something wrong with this."

It's one reason Watermeier, of Bend, has joined the small but growing ranks of medical billing advocates.

The 12-year-old Medical Billing Advocates of America now has 70 members, including more than a dozen who joined in the past year, says Christine Hudson, the chief operating officer. Three live in Oregon. Two of them set up shop this year, and all say they have as much work as they can handle.

No surprise there. More Americans are paying their own medical bills today, either because they lost their insurance or because their health plan boosted their deductibles.

Errors, meanwhile, are common. The Salem, Va.-based association claims eight of 10 bills contain mistakes. I doubt the figure is that high, but billing advocates in Oregon say hospitals particularly are susceptible to making mistakes. And the longer the stay, the greater the chance for error.

Watermeier, retired after 30-plus years in health care sales and management, says he started his business, Medical Bill Review, after getting billed by a dermatologist for biopsy analyses he didn't request. He got the charges removed after threatening to go elsewhere, he said.

He's convinced the entire medical reimbursement system needs reform. "It's just a mess," he says. "And they get away with it because few people question their medical bills."

Until the Obama administration and Congress pulls that off, Watermeier plans to work at least part time on behalf of bill-walloped consumers.

In defense of medicine, there are many good doctors out there who do what they do to help people rather than make loads of money. And Medicare reimbursements -- the floor that Watermeier used to set fees -- are designed to be low. The American Medical Association said last year that Medicare reimbursement levels had not changed since 2001. That's why medical practices charge far above those marks.

But Watermeier's Oregon colleagues share his concerns. They're wary either of the inequity in the billing system, the method by which doctors set rates, excessive spending within the industry or the many billing errors they've seen in their careers.

Often the errors are a matter of humans mucking things up as they enter a code in a computer. But consumers pay the erroneous charges because they don't know better or don't think they can challenge them. "People need to be their own best advocate," says Donna Bly, who founded Columbia Medical Review in Tigard in 2006. "They need to look out for themselves."

On top of her advocacy, Bly, a registered nurse, works part time coding emergency room charts for a medical consulting firm.

Recently, a California man with newborn triplets sent Bly an 8-pound box of medical bills. He had good insurance but lacked time to even open some of his bills, she says.

Bly is bothered that the insured get steeper discounts than uninsured patients, who sometimes don't even get offered a break. In one case she called unusual, she got an uninsured client 40 percent off his Southern California hospital bill and half off a bill from his surgeon, saving him more than $16,500.

Allen Patterson, who started Patterson & Associates Medical Billing Advocates in Salem in March, once worked as a clinical research coordinator at the University of California at San Diego. He became disillusioned with the amount of money being poured into drug trials. Big drugmakers repeatedly put him and other contractors in five-star hotels for weeklong stays -- all to get federal approval for a new drug, he says.

"These costs are being passed on to you and I," he says now, "and to people who are uninsured."

These advocates aren't free, and their fees differ. In most cases, they'll work on a small retainer to start and ask for one-third of the amount they recover.

Medical bills can be complicated and voluminous. But it's not beyond belief that consumers can challenge bills themselves. A lot of information exists online now. They're simply unaware it can be done.

"I think to some degree it's kind of like the fear of do you ask your doctor a question," Patterson said. "Our mentality is kind of stuck there to some degree. We can't question it because they did provide a service."

But if we don't question it, these sloppy (and sometimes unfair) practices will continue. You'll pay for a physical therapy session or sponge bath you didn't get. None of us can afford that in this economic environment. And we can't count on the medical establishment to find efficiencies on its own.

"Because there's so much money coming through, especially in a specialty practice like cardiology, you don't have to be very precise," Watermeier explains.

And, dare I say, when health insurance premiums have increased at more than three times the rate of inflation for 10 years , the industry doesn't need, or deserve, the extra dough.

"If more people did this and put the medical establishment on alert that they're not going to simply accept what they're charged but they're going to question it, then things would turn around," Watermeier says.



Brent Hunsberger does not give individual financial advice but welcomes questions and comments about his column and blog. Reach him at 503-221-8359 or at brenthunsberger@news.oregonian.com

Here's how to contest a medical bill

For lots of us, contesting a bill takes guts. Challenging caregiver bills after they've just saved your life is downright ulcer-inducing.

But you should if you think something's wrong or the bill is high. To help, three medical billing advocates in Oregon offered tips on keeping medical costs down and identifying billing errors.

The strategies

Ask for a detailed statement: Federal law requires that medical providers give you this, advocates say. But they often don't, especially if you're covered by insurance. Without it, you won't know what to contest.

Make sure your insurer covers procedures beforehand: Some won't, or they'll require pre-authorization. This is especially true for nonemergency measures, such as laser-eye surgery.

Ask for the codes, especially for nonemergency procedures and before you're treated. Ask your caregiver or hospital for the billing and diagnostic codes for the services they provide. Find out how much you'll be charged for each. Then call your insurer and see how much it usually pays for the service represented by the code.

Medical billing advocate Bill Watermeier says you can simply ask, "Would you mind giving me the CPT code and the ICD-9 and I'll call my insurance company?" (See a fuller description of the codes below.) That will help you determine how much you could be paying out of pocket -- particularly in the case of elective procedures. You may be able to negotiate the difference. Just remember, warns Donna Bly, another advocate: Caregivers might not know all the codes they'll end up using, especially if complications arrive.

Wait to pay any questionable bill: "If you haven't paid, it's a lot easier than trying to get a refund," said Watermeier. "Because then you can negotiate."

Shop around: Compare prices for surgeries or procedures at other hospitals or practices beforehand. Such information also comes in handy when challenging your bill.

Plead your situation: Explain any financial duress you're under, from a job loss or unforeseen medical shock. "Sometimes that helps, and sometimes it doesn't," Bly says.



Watch for excess charges for supplies: If you got charged for time in an operating room, you should not also be charged for supplies such as lap sponges, Bly says. They're supposed to be covered in the operating room charge.

Talk to the right person: At a practice, ask for the billing department. At a hospital, ask for accounting or the business office. Pay a visit to them before you're discharged. If you're not getting anywhere, and you still believe you're right, ask for a supervisor.



Appeal to bigwigs by certified letter: A friend did this recently with success after receiving a high bill for her delivery. Her previous efforts at the billing-department level went nowhere. But a letter to a couple of executives resulted in a very good settlement on her behalf.

Remain firm but calm: Don't get belligerent, Bly says. Treating others as you would treat yourself often goes further than yelling. Still, be firm and be persistent. One phone call probably won't resolve your problem.



The codes



Getting familiar with coding acronyms can help you determine what you'll pay for a medical procedure beforehand and whether you've been billed correctly afterward.

CPT is billing or procedure code (short for Common Procedural Terminology) used by both private practices and hospitals. It's often five or six digits long.

ICD-9 is diagnostic code (short for International Classification of Diseases, 9th Revision) three to five digits long. Preventive measures, which many insurance plans cover fully, often start with a V.

HCPCS is an additional set of CPT or billing codes used by hospitals (short for Heathcare Common Procedural Coding System). Usually five characters long with letters sometimes attached, they're used for supplies, products, medical equipment and prosthetics, Bly says.



Get more tips on challenging bills here.

-- Brent Hunsberger