How is this healthcare billing scam being run?
August 9, 2015 1:50 PM Subscribe
For a month now I have been involved in a Kafkaesque nightmare with a local hospital billing department. I am convinced that they have a thief in their employ but I cannot figure out how to convince them of this or to positively make my case.
In January I had a diagnostic procedure done. Since they didn't know how much I would owe after the insurance paid its share, they insisted on running my MasterCard for my $500 insurance deductible. A couple of weeks later the EoB arrives from my health insurer revealing that I don't owe $500, I owe them $370 and I owe my cardiologist $55.23 for a total out of pocket warning of $425.23. (Amounts changed slightly to fend of the GOOG, but that total is important.) Since the bills are separate I sent my cardiologist a check for $55.23.
In mid March they noticed that my balance had been negative for a couple of months and issued a refund to my credit card for $130. After this my balance with the accounting department was zero.
So, fast forward to July when I get a bill from them for $425.23. I physically visited the hospital with my credit card statements and other evidence, including the EoB which clearly shows this is a stupid amount nobody has ever been billed, charged, or paid since it's the TOTAL of two unrelated bills. Billing isn't at the hospital, though, it's in Houston so I have to escalate to them to follow up.
Their story is that the $425.23 was charged back and that's why they are billing me for it. I have shown them that there never was a charge for that amount, much less a charge back, on my statement.
However, Friday afternoon after escalating again their representative conferenced me in as she called their credit card processor. She had a case number, which the bank said did refer to a $425.23 charge back request which had been made by me and which was in a holding account pending resolution, and that they would return the money to my hospital's account if I canceled the charge back request. I read the CC rep my credit card number and she confirmed that that was the card from which the chargeback had originated.
Except that I never made that request and, as I verified Saturday morning, my bank has no record of any such thing. I can't cancel a request I didn't make.
My going theory is that there is a thief in my hospital's Houston billing department who has access to the EoB paperwork and account information, who didn't quite read my bill closely enough before deciding what amount to scam me for. And this person probably has an accomplice at the hospital's credit card processor to enter these bogus charge back requests as if they came from real patients' banks. I am sure that this is a much bigger problem than it looks like because nobody goes to this kind of trouble to steal four hundred bucks and stops, and the amount is low enough that many people would just pay it to make it go away. It would be an unnoticeable rounding error in the bizarro world New Math of hospital billing for many accounts, but it's a little more glaring when the original amount being rounded is a balance of zero.
So my questions, hive mind, are:
(1) assuming that we conference back in to the hospital's CC processor and they continue their story of this chargeback coming, how can I establish the bogosity of this request? Don't chargebacks normally generate a trail of paperwork with merchant notices and replies before the money is taken from the merchant? What should I ask for from the hospital and their provider? I have thought of asking if the bank from which the charge back came is the same one to which the January charge and March refund were made, but what if they say it's the same?
(2) If they are still showing my bank and card as the origin of the request, how will the thieves divert the money? What should everyone be looking for?
(3) Have I missed anything or is there another explanation?
In January I had a diagnostic procedure done. Since they didn't know how much I would owe after the insurance paid its share, they insisted on running my MasterCard for my $500 insurance deductible. A couple of weeks later the EoB arrives from my health insurer revealing that I don't owe $500, I owe them $370 and I owe my cardiologist $55.23 for a total out of pocket warning of $425.23. (Amounts changed slightly to fend of the GOOG, but that total is important.) Since the bills are separate I sent my cardiologist a check for $55.23.
In mid March they noticed that my balance had been negative for a couple of months and issued a refund to my credit card for $130. After this my balance with the accounting department was zero.
So, fast forward to July when I get a bill from them for $425.23. I physically visited the hospital with my credit card statements and other evidence, including the EoB which clearly shows this is a stupid amount nobody has ever been billed, charged, or paid since it's the TOTAL of two unrelated bills. Billing isn't at the hospital, though, it's in Houston so I have to escalate to them to follow up.
Their story is that the $425.23 was charged back and that's why they are billing me for it. I have shown them that there never was a charge for that amount, much less a charge back, on my statement.
However, Friday afternoon after escalating again their representative conferenced me in as she called their credit card processor. She had a case number, which the bank said did refer to a $425.23 charge back request which had been made by me and which was in a holding account pending resolution, and that they would return the money to my hospital's account if I canceled the charge back request. I read the CC rep my credit card number and she confirmed that that was the card from which the chargeback had originated.
Except that I never made that request and, as I verified Saturday morning, my bank has no record of any such thing. I can't cancel a request I didn't make.
My going theory is that there is a thief in my hospital's Houston billing department who has access to the EoB paperwork and account information, who didn't quite read my bill closely enough before deciding what amount to scam me for. And this person probably has an accomplice at the hospital's credit card processor to enter these bogus charge back requests as if they came from real patients' banks. I am sure that this is a much bigger problem than it looks like because nobody goes to this kind of trouble to steal four hundred bucks and stops, and the amount is low enough that many people would just pay it to make it go away. It would be an unnoticeable rounding error in the bizarro world New Math of hospital billing for many accounts, but it's a little more glaring when the original amount being rounded is a balance of zero.
So my questions, hive mind, are:
(1) assuming that we conference back in to the hospital's CC processor and they continue their story of this chargeback coming, how can I establish the bogosity of this request? Don't chargebacks normally generate a trail of paperwork with merchant notices and replies before the money is taken from the merchant? What should I ask for from the hospital and their provider? I have thought of asking if the bank from which the charge back came is the same one to which the January charge and March refund were made, but what if they say it's the same?
(2) If they are still showing my bank and card as the origin of the request, how will the thieves divert the money? What should everyone be looking for?
(3) Have I missed anything or is there another explanation?
Response by poster: builderofscience, is there anything specific I should ask for? I think so far I'm dealing with pretty low level munchkins. They are very insistent that this charge back originated with me and came from nowhere. What would I ask for to disprove that?
While it is a credit card, they are billing me for the amount charged back since it goes back onto my account as a negative balance, so it could affect my credit rating, go to collections, affect my ability to get treatment (and it is the closest hospital and I have coronary artery disease), etc.
I do realize that if it goes to court I'll probably get a summary judgement based on the documentation from my provider, but I'd like to stop it before then.
posted by Bringer Tom at 2:18 PM on August 9, 2015
While it is a credit card, they are billing me for the amount charged back since it goes back onto my account as a negative balance, so it could affect my credit rating, go to collections, affect my ability to get treatment (and it is the closest hospital and I have coronary artery disease), etc.
I do realize that if it goes to court I'll probably get a summary judgement based on the documentation from my provider, but I'd like to stop it before then.
posted by Bringer Tom at 2:18 PM on August 9, 2015
Remember the phrase, "This call may be recorded for quality and training purposes"? That's a polite lie which means that they record every single second of every single call. The CC company can probably produce a recording of the chargeback request, though they may not want to unless you escalate things.
posted by wnissen at 2:37 PM on August 9, 2015 [1 favorite]
posted by wnissen at 2:37 PM on August 9, 2015 [1 favorite]
Response by poster: Wrissen, the problem is that as far as my bank seems to be concerned, there was no chargeback request. The merchant's provider insists that there was one from my bank and my bank agrees with me that there wasn't one. How can I prove that something like that doesn't exist?
posted by Bringer Tom at 2:58 PM on August 9, 2015
posted by Bringer Tom at 2:58 PM on August 9, 2015
Response by poster: FYI my next move on plan is to conference the munchkin from my merchant in on a call to my bank to show there is no chargeback request, but the problem is that I've already documented that in writing and their system won't let her clear the balance because of what they're hearing from their bank.
posted by Bringer Tom at 2:59 PM on August 9, 2015
posted by Bringer Tom at 2:59 PM on August 9, 2015
The chargeback was almost certainly done through computer systems. A voice recording existing is unlikely.
I can tell you that after handling hundreds (ugh, it could be thousands) of calls like these, my approach from the customer side has changed from letting them know that I understand the situation to feigning ignorance and mild confusion.
You need to find out what card is being credited. Make sure it's your card. That's why you need to whole credit card number. Again, I would emphasize that this is most likely a perfectly innocent, though annoying, mistake.
Ultimately (and once it has been determined that the credit is being issues to you), I would offer to pay once the chargeback processes. Depending on the type of card and banks involved, that could take anywhere from a couple of days to a couple of weeks.
Just keep escalating, BT. The way through customer service is to make solving your problem a slightly less aversive experience than continuing to interact with you. So be extremely polite but persistent and ask for a supervisor, manager, etc. as soon as you hit a wall with the munchkins. You'll need to be insistent, as one of their primary functions is to keep you away from the decision makers.
posted by builderofscience at 3:01 PM on August 9, 2015 [2 favorites]
I can tell you that after handling hundreds (ugh, it could be thousands) of calls like these, my approach from the customer side has changed from letting them know that I understand the situation to feigning ignorance and mild confusion.
You need to find out what card is being credited. Make sure it's your card. That's why you need to whole credit card number. Again, I would emphasize that this is most likely a perfectly innocent, though annoying, mistake.
Ultimately (and once it has been determined that the credit is being issues to you), I would offer to pay once the chargeback processes. Depending on the type of card and banks involved, that could take anywhere from a couple of days to a couple of weeks.
Just keep escalating, BT. The way through customer service is to make solving your problem a slightly less aversive experience than continuing to interact with you. So be extremely polite but persistent and ask for a supervisor, manager, etc. as soon as you hit a wall with the munchkins. You'll need to be insistent, as one of their primary functions is to keep you away from the decision makers.
posted by builderofscience at 3:01 PM on August 9, 2015 [2 favorites]
I should clarify that they aren't going to give the whole credit card number to you, but they can verify whether it is the same card.
It's unlikely that the low level billing agent you've been speaking to will have the authority to see the entire card number in history.
This stage is also, btw, where fraud would be taking place (although I would again encourage you to avoid bringing that up). Someone could be issuing credits to their own cards for relatively small amounts and rebilling the customers. An additional $500 charge from a hospital visit is probably not investigated by most people.
posted by builderofscience at 3:08 PM on August 9, 2015
It's unlikely that the low level billing agent you've been speaking to will have the authority to see the entire card number in history.
This stage is also, btw, where fraud would be taking place (although I would again encourage you to avoid bringing that up). Someone could be issuing credits to their own cards for relatively small amounts and rebilling the customers. An additional $500 charge from a hospital visit is probably not investigated by most people.
posted by builderofscience at 3:08 PM on August 9, 2015
Response by poster: BoS, when I was conferenced in on their call to their billing provider, I read my own CC number to the provider rep and she did confirm that it was the card from which the chargeback request had been received.
Do you think "When it appears on my statement I'll pay you" would be sufficient to end it at this point, with it never appearing on my statement "good enough" for refusing to pay?
posted by Bringer Tom at 3:11 PM on August 9, 2015
Do you think "When it appears on my statement I'll pay you" would be sufficient to end it at this point, with it never appearing on my statement "good enough" for refusing to pay?
posted by Bringer Tom at 3:11 PM on August 9, 2015
If it never appears on your statement, you'll have to talk to them again in a few weeks.
But if the credit card was verified with their billing provider, then it's probably just a question of processing time.
I would insist that they wait until the chargeback is completed before processing payment, and I would call my CC company to halt any payments to them until that time.
I'm curious, when you were on the phone with their CC processor, were you given the option to cancel the chargeback?
posted by builderofscience at 3:20 PM on August 9, 2015
But if the credit card was verified with their billing provider, then it's probably just a question of processing time.
I would insist that they wait until the chargeback is completed before processing payment, and I would call my CC company to halt any payments to them until that time.
I'm curious, when you were on the phone with their CC processor, were you given the option to cancel the chargeback?
posted by builderofscience at 3:20 PM on August 9, 2015
Response by poster: No, they went to a great deal of trouble to verify the identity of my merchant but then it was obvious I was just a ghost on the line to them.
There are no payments to them to halt. My balance with them has been zero and there has been zero activity with them since March 26, except for this phantom bill and alleged chargeback request on my part.
posted by Bringer Tom at 3:24 PM on August 9, 2015
There are no payments to them to halt. My balance with them has been zero and there has been zero activity with them since March 26, except for this phantom bill and alleged chargeback request on my part.
posted by Bringer Tom at 3:24 PM on August 9, 2015
Sorry, I wasn't clear. I meant that you don't want your CC company to process any future payments from them until after the chargeback is fully processed.
posted by builderofscience at 3:47 PM on August 9, 2015
posted by builderofscience at 3:47 PM on August 9, 2015
Response by poster: OK thanks for the clarification. I will definitely take your advice about the theft thing, although I frankly can't think of any legitimate way that number from my EoB ended up getting charged back . But whatevs, like you said it shouldn't be my problem.
posted by Bringer Tom at 4:08 PM on August 9, 2015
posted by Bringer Tom at 4:08 PM on August 9, 2015
I'm not certain you were on the phone with an actual credit card processor. I know this scam. It is a scam.
Call your bank. Report the fraud, the name of the hospital, the name of the supposed processing company, and the amount they are trying to chargeback/charge.
Repeat to your bank's fraud department in writing. You will have a contact there to address your letter to.
Put fraud alerts on all of your accounts. Watch your credit statements and ratings with the bureaus.
The mistake you made was "verifying" your full account number over the phone. Don't ever ever do that again.
If I was you, I would report this particular card stolen and get a new number/card issued. The bank's fraud department will do the rest. You personally do not have to "prove" anything. This is what you pay your bank for. No worries.
posted by jbenben at 4:08 PM on August 9, 2015 [13 favorites]
Call your bank. Report the fraud, the name of the hospital, the name of the supposed processing company, and the amount they are trying to chargeback/charge.
Repeat to your bank's fraud department in writing. You will have a contact there to address your letter to.
Put fraud alerts on all of your accounts. Watch your credit statements and ratings with the bureaus.
The mistake you made was "verifying" your full account number over the phone. Don't ever ever do that again.
If I was you, I would report this particular card stolen and get a new number/card issued. The bank's fraud department will do the rest. You personally do not have to "prove" anything. This is what you pay your bank for. No worries.
posted by jbenben at 4:08 PM on August 9, 2015 [13 favorites]
Response by poster: If the conference call wasn't with an actual processor it was an insanely elaborate scam. I suppose it's possible but if they did all that for $400 then they have to be doing it hundreds or even thousands of times a month, and there would have to be dozens of accomplices at minimum. Occam's razor puts me with BoS on this. Plus that call is a step few of these frauds would even get to. Most people would just capitulate or walk. It doesn't make any sense.
posted by Bringer Tom at 5:39 PM on August 9, 2015
posted by Bringer Tom at 5:39 PM on August 9, 2015
Sure!
I totally understand now why you are stuck in this loop.
Report this erroneous/fraudulent activity potentially pending against your card to your bank asap. You already pay for this sort of protection, it is why we use credit cards.
Since you gave all of your account info over the phone (when this happened to my neighbor, this was the point of the scam) report the card as compromised and get a new card with a new card number issued. Place fraud alerts with the credit rating bureaus. In writing, dispute any bills or charges that turn up in reference to these transactions.
Either you keep the card and keep going in circles, or you report this as fraud and get a new card number.
There currently are no ACTUAL charges or chargebacks against your actual account with your bank, as I understand it. You will have a lot more leverage against this fake charge if it turns up in collections down the road if you report this activity as fraud today and cancel the current card. Even if this is a billing mistake, this is the best way to protect yourself.
posted by jbenben at 7:36 PM on August 9, 2015 [3 favorites]
I totally understand now why you are stuck in this loop.
Report this erroneous/fraudulent activity potentially pending against your card to your bank asap. You already pay for this sort of protection, it is why we use credit cards.
Since you gave all of your account info over the phone (when this happened to my neighbor, this was the point of the scam) report the card as compromised and get a new card with a new card number issued. Place fraud alerts with the credit rating bureaus. In writing, dispute any bills or charges that turn up in reference to these transactions.
Either you keep the card and keep going in circles, or you report this as fraud and get a new card number.
There currently are no ACTUAL charges or chargebacks against your actual account with your bank, as I understand it. You will have a lot more leverage against this fake charge if it turns up in collections down the road if you report this activity as fraud today and cancel the current card. Even if this is a billing mistake, this is the best way to protect yourself.
posted by jbenben at 7:36 PM on August 9, 2015 [3 favorites]
I suppose it's possible but if they did all that for $400 then they have to be doing it hundreds or even thousands of times a month
It seems worth pointing out that if jbenben's hunch is correct, the scam wasn't for the $400, it was for whatever amounts they manage to charge to your card now that they have the full card number and verifying information, etc. In his scenario the $400 chargeback was entirely imaginary (which would be consistent with your bank knowing nothing about it), merely the bait to get the information they needed to now commit actual fraud.
posted by nobody at 8:11 PM on August 9, 2015 [2 favorites]
It seems worth pointing out that if jbenben's hunch is correct, the scam wasn't for the $400, it was for whatever amounts they manage to charge to your card now that they have the full card number and verifying information, etc. In his scenario the $400 chargeback was entirely imaginary (which would be consistent with your bank knowing nothing about it), merely the bait to get the information they needed to now commit actual fraud.
posted by nobody at 8:11 PM on August 9, 2015 [2 favorites]
Response by poster: Update: I called back this morning, conferenced the hospital rep in as I queried the CC account transactions showing that there was no chargeback, and then canceling the card and asking for a new one to be issued. So now the rep has proof that there was no chargeback, I don't have the money, and I can't get the money because the card is no longer active. I also asked about recent activity and there has been no other fraudulent activity since I gave the other rep the card number. (I also had to read it for verification to the real bank on the call this morning, while the hospital rep could hear, but then of course I asked them to close the account.)
The story is now that they have to do an internal investigation (she agreed that the total from my EoB being the chargeback amount was extremely fishy and they really need to find out how that happened) and will probably zero my hospital account balance within a few days once they figure out how to do it without failing their next audit.
posted by Bringer Tom at 9:35 AM on August 10, 2015 [1 favorite]
The story is now that they have to do an internal investigation (she agreed that the total from my EoB being the chargeback amount was extremely fishy and they really need to find out how that happened) and will probably zero my hospital account balance within a few days once they figure out how to do it without failing their next audit.
posted by Bringer Tom at 9:35 AM on August 10, 2015 [1 favorite]
Failing their audit is not your concern. They could have already corrected your account.
This was exactly the shenanigans I was afraid of. The "failing their audit" excuse is bogus.
Demand in writing (send the letter certified) that they immediately correct your account to reflect you are paid in full.
As a consumer, you should now report this to your state's Attorney General's Office. My guess is the processing company is padding their books - perhaps to qualify for loans, or to appear attractive to a corporate buyer, to meet state regulation requirements, or similar.
In short, there is no reason this entity needs to keep you involved, they could have corrected your account immediately. I suspect you are not the only victim of whatever is going on.
This is what your State's Attorney General is for. And thank you on behalf of all the people you might be helping by speaking up!
posted by jbenben at 4:50 PM on August 10, 2015 [1 favorite]
This was exactly the shenanigans I was afraid of. The "failing their audit" excuse is bogus.
Demand in writing (send the letter certified) that they immediately correct your account to reflect you are paid in full.
As a consumer, you should now report this to your state's Attorney General's Office. My guess is the processing company is padding their books - perhaps to qualify for loans, or to appear attractive to a corporate buyer, to meet state regulation requirements, or similar.
In short, there is no reason this entity needs to keep you involved, they could have corrected your account immediately. I suspect you are not the only victim of whatever is going on.
This is what your State's Attorney General is for. And thank you on behalf of all the people you might be helping by speaking up!
posted by jbenben at 4:50 PM on August 10, 2015 [1 favorite]
Response by poster: jbenben my plan is to give them 48 hours. I think it is reasonable to assume that the people handling this so far simply don't have the authority to make the adjustment. But I've already pulled the "one day one of us will sue the other and I'll get the summary judgement" card and by mid week I'm either going to be seeing zero balance or sending out certified letters. It's time for the munchkins to escalate to the people who can swallow hard and fix it, and if they don't, well, yeah. Registered letters cc'ed to the AG FTW. I have done that before. It's just that this situation has been so weird that until now I wouldn't have had any idea quite what to put in those letters.
posted by Bringer Tom at 6:36 PM on August 10, 2015
posted by Bringer Tom at 6:36 PM on August 10, 2015
Response by poster: Also, I have come to suspect that this scam was cooked up by probably two people who have close knowledge of how their institutions will respond to anomalies. If the amount of this dispute had been the amount of an actual charge to my card I don't think heaven or earth would have convinced them that it wasn't a chargeback request by me. It's very carefully framed to look exactly right to their institution. Had it been the amount of a real charge suspicion would have shifted to the CC providers once I did what I did today. But with the dollar amount coming from my healthcare EoB there's no possibility of that, and now that I've eliminated myself as the source of the anomaly they have nowhere to look but inward.
I don't see any way the hospital itself is doing this because if they wanted to steal $400 they could do it far more impenetrably with a simple "innocent" miscode. If this is a scam it's the work of individuals on a small scale, but very carefully thought out. A couple of people, one at the hospital billing department and one at their CC processor, can do this to 20 or 40 people a month and make a nice side income and probably go for years with nobody challenging it because, health care you know, none of the math makes sense.
posted by Bringer Tom at 6:53 PM on August 10, 2015
I don't see any way the hospital itself is doing this because if they wanted to steal $400 they could do it far more impenetrably with a simple "innocent" miscode. If this is a scam it's the work of individuals on a small scale, but very carefully thought out. A couple of people, one at the hospital billing department and one at their CC processor, can do this to 20 or 40 people a month and make a nice side income and probably go for years with nobody challenging it because, health care you know, none of the math makes sense.
posted by Bringer Tom at 6:53 PM on August 10, 2015
if you report it, stay away from opinions about what is going on.
It's pretty bad they have fabricated charges and chargebacks and re-fake-charges. There's A LOT of scams around medical billing, insurance company fraud, Medicaid fraud, etc. etc..
You have experience with a medical processing company that makes up false transactions and banking institution interactions for profit on the accounts of previous patients. That's what you report. No opinions, don't label the customer service reps deraguatory names, no rancor. Just the facts.
Good luck.
posted by jbenben at 7:41 AM on August 11, 2015
It's pretty bad they have fabricated charges and chargebacks and re-fake-charges. There's A LOT of scams around medical billing, insurance company fraud, Medicaid fraud, etc. etc..
You have experience with a medical processing company that makes up false transactions and banking institution interactions for profit on the accounts of previous patients. That's what you report. No opinions, don't label the customer service reps deraguatory names, no rancor. Just the facts.
Good luck.
posted by jbenben at 7:41 AM on August 11, 2015
Response by poster: Update: After some fighting between the customer service munchkins and management, they zeroed my account balance and it's over, at least for me. Thanks to everyone for the advice.
posted by Bringer Tom at 5:19 AM on August 14, 2015
posted by Bringer Tom at 5:19 AM on August 14, 2015
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I've handled a number of (corporate side) charge back and fraud investigations, and my first impression is that you're overthinking this. My initial hunch is that someone on their side got confused and charged, then credited your card. You might have never seen it, provided they had offsetting charges in their system. But bank handling of credits is wonky. Billing SNAFUs happen.
I would ask them to produce their internal documents for all transactions made on your card. They may cry SOX compliance, but there is someone in the hospital who can look at whole credit card numbers, even if it's just an IT manager.
The good new is, it's a credit card. So it isn't your money on the line. Yet, anyway. You have your invoices, receipts, and credit card statements, so you should be fine.
posted by builderofscience at 2:08 PM on August 9, 2015 [3 favorites]