Healthy Savings On Hospital Bills

Last May, Detroit landscaper Steven O'Shea was cutting a tree when he slipped. As he fell, right on his chainsaw, it sliced into his arm, CBS News correspondent Wyatt Andrews reports.

"Right up to the bone. It went through all the muscle, the tendon," O'Shea says.

O'Shea, who is uninsured, praises the surgeons who saved his arm. But the bill they sent would have cost an arm and a leg. The total: $39,000 for a three-hour operation.

"I was outraged when I looked at that bill. I opened up the envelope and thought 'where in the world do they come to this figure,'" O'Shea says.

Like millions of Americans, O'Shea also found his bill confusing — a baffling list of codes. So after an Internet search, he found Nora Johnson, who calls herself a billing advocate.

She's a kind of medical detective, an advocate trained to sniff out mistakes on hospital bills. She found a big one on O'Shea's.

The hospital repaired six tendons, but he was sent a bill for nine. "The took $11,000 off of his bill," says Johnson, of Medical Billing Advocates of America.

Johnson says almost every hospital bill she has ever reviewed has an overcharge.

"I see it every day on every bill," Johnson says.

Consider Joe Manchin's bill. After his knee replacement last year, Manchin says most of his $34,000 bill was a list of charges simply labeled "hospital extras." Whatever happened, he thought, to plain English?

By the way, Manchin is governor of West Virginia. He says nobody can understand what each hospital extra is. "The best accountant in the world can not understand this," he says.

That bill led Manchin to propose radical surgery — for hospital bills.

Manchin believes the broken billing system can be fixed by patients. His unique idea is to have the state's Medicaid patients become watchdogs over their medical bills and pocket 10 percent of any error they discover. The change, he says, will instantly improve billing and save money.

"With technology today, they can't tell me that can't be done. I know it can," Manchin says.

Nora Johnson believes every patient can be a watchdog. First, she says, don't settle for a summary bill: Get an itemized bill. Look for charges on procedures doctors did not perform, and then check for duplicate charges. If you want a billing advocate like Johnson, start with the Web site Bill Advocates. Then scroll down and click on "find an advocate."

After Steve O'Shea found an advocate, negotiations began with the Henry Ford Health System, where officials tell CBS News "the services we billed for were rendered." However, last week they drastically reduced his bill — to around $6,500, about where Johnson said it should have been all along.

"It's a profitable error, and errors always seem to have a way of working out to be profitable," O'Shea says.

O'Shea thinks the lesson is that his bill, and the bills of most Americans. have mistakes that need correcting.