A pair of transposed digits in a medical identification number was the difference between insurance coverage for Mike Dziedzic and the seemingly never-ending hounding for payment by the hospitals that cared for his dying wife.

The astute eye of a medical billing advocate who Dziedzic hired for help caught the innocuous mistake — the sole reason his insurance company had refused to pay more than $100,000 in claims that had piled up and why collectors were now at his doorstep.

Had it remained unnoticed — as often happens to patients faced with daunting medical debt — Dziedzic said, he most surely would have lost his Rifle home, his way of life and had little choice but to live in bankruptcy.

All while grieving the loss of his wife of nine years.

“Quite simply, I was lost and buried in bills and I didn’t know what to do,” Dziedzic said. “I just assumed it was taken care of. The only reason I knew about advocates was a personal nurse mentioned it to me.”

Experts say there are tens of thousands more like Dziedzic across the country with strangling medical debts. Medical Billing Advocates of America, a trade group in Salem, Va., says that eight of 10 bills its members have audited from hospitals and health care providers contain errors.

It’s estimated that at least 3 percent of all health care spending — roughly $68 billion — is lost to fraud and billing errors annually.

Some say new reform laws will only make things worse.

“Hospitals won’t be able to afford to lower their revenues and we expect there to be more and more errors,” said Christie Hudson, vice president and chief operating officer of the medical billing trade group.

“We’ve been fighting overcharges for years, and insurance companies continue to pay without question.”

The little-known field of medical-billing advocacy remains in its infancy, largely because there are no specific certifications or schooling necessary. MBAA offers in-home study courses and Sarah Lawrence College in Bronxville, N.Y., offers a masters program in health advocacy — there are even courses to learn the special coding necessary for medical billing — but just about anyone can hang a shingle and say he or she is an advocate.

“The bottom line is, it takes lots of work and I can’t imagine anyone trying it without any experience in a related background,” said Holly Knapp, owner of Medical Billing Advocacy of the Rockies in Loveland and the one who handled Dziedzic’s case.

The reason is the complexity of deciphering bills and claims weighted down by complex codes.

Overcharged by $87,000

Hospital associations are the first to say their industry works hard to get it right, but that mistakes can happen.

“Hospitals strive each day to ensure their billing is accurate and correct,” said Ron Zwerin, vice president and director of communications of the Colorado Hospital Association. “If an error occurs, we encourage patients to call their carrier to get it corrected.”

Whether advocates help with that, the hospital association won’t say.

“We take no formal position on the advocates and what they do,” Zwerin said.

The advocate’s objective is to whittle down outrageous charges — the list of examples would make even the most conservative businessman roll his eyes — by uncovering errors in bills; negotiating with an insurer who has denied coverage; even haggling for reduced fees with the providers themselves.

“It’s just egregious, the overcharges by doctors just because they can,” said Victoria Caras, owner of Aspen Medical Billing Advocates and a former attorney.

“People get very intimidated when dealing with insurance companies and the appeals process. I don’t.”

The bulk of the insurance industry handles claims properly, notes Cindy Sovine-Miller, spokeswoman for the Colorado State Association of Health Underwriters. But denials can become cumbersome.

“The insurance industry has done itself no favors in claim denials,” Sovine-Miller said. “There needs to be a better mechanism of fraud prevention, a legitimate one that is not simply to deny claims and wear the patients down.”

The outcome of an advocate’s work can be significant. One of Caras’ clients, a leukemia patient, saved $87,000 when the billing advocate found the hospital had overcharged for prescribed drugs by 286 percent.

It happened with Dziedzic, too.

With a good insurance plan and faith that all would be taken care of, Dziedzic, 52, focused on his wife. Heidi, 41, a once-spry woman with a penchant for the outdoors, was slowly losing her fight with an assortment of ailments. She died May 7.

“I was just overwhelmed when she passed,” said Dziedzic, an assistant manager for City Market grocery stores.

It wasn’t long before the bills — very large ones — arrived from collection agencies.

“Honestly, I didn’t think much of it since I thought insurance companies just take a long time to pay. So I didn’t worry,” he said.

Eventually, he had to.

That’s when he found Knapp through an Internet search and the medical billing advocacy association.

Knapp had spent 10 years at Anthem Insurance, the largest provider of private insurance in Colorado, as a claims adjuster and marketer for large-group coverage.

“The biggest issue was that the insurance company was denying Dziedzic’s claims, and it just didn’t make sense. These were obviously covered processes,” Knapp said. “I got to calling just about everyone to figure out this mystery for the laundry list of rejected claims.”

Along the way, the main culprit surfaced: one of the hospitals had mistakenly transposed two digits in Heidi’s medical number. The error had gone undetected for two years.

It meant an immediate reversal on more than $20,000 in unpaid claims.

The biggest issue, however, was in the network billing scheme. There, physicians who were not affiliated with a hospital in the insurance plan’s approved network were billing Dziedzic at full price.

In the network, but still out

It’s an error Knapp and others have found countless times.

It happened to Ken Terry of Loveland. His eldest son, Nate, was severely injured in a motorcycle accident last year, and the rising track star spent nearly three months in hospitals.

Despite insurance, the $450,000 price tag from the hospital nearly choked Terry. Another wanted an additional $500,000.

“It was thousands and thousands of dollars and the bills just kept showing up,” he said. “They’d take my house, my car; I’d be on the street.”

It turns out the doctors didn’t realize Terry had insurance and billed him the full amount — not the discounted amount typically charged to insurance companies.

And then — unknown to Terry — resident doctors such as anesthesiologists and radiologists at an in-network facility didn’t personally participate in the insurance plan. As such, they charged full price — and Terry’s deductible charges nearly tripled.

“People just don’t know they can insist that the insurance company charge the network rate. They get the bill and think they have no recourse but to pay it,” Knapp said.

There was also the matter of a cancellation notice that the insurance carrier had not sent Terry. Knapp took note and raised the issue.

“It was fortunate for the hospitals that the insurance goofed up,” Terry said. “They got paid.”

David Migoya: 303-954-1506 or dmigoya@denverpost.com

Be your own billing advocate

Medical costs are rising and billing mistakes can inflate costs exorbitantly. Here are a few suggestions for becoming your own billing advocate.

•Determine what your insurer is willing to pay for a particular procedure; it’s almost always less — sometimes by 50 percent or more — than what an individual is charged.

•Ask your insurer whether a procedure is covered before you enter the hospital.

•Ask whether everyone treating you — from the doctor down to the scrub nurse — participates in your insurance plan.

•Ask the doctor’s permission for you to bring your own prescriptions from home so you don’t pay for the steeper-priced hospital ones.

•Charges that are grouped together, such as for lab fees, should be itemized. Demand an itemized list.

•Broad categories such as radiology, surgical supplies or pharmacology shouldn’t appear on a summary bill.

•Ask for a copy of the orders issued by your doctor and nurse and compare that to your bill.

•Check your anesthesia record, since it will have start and ending times for the operating room. Compare that to the operating-room charge.

•If you’re able, keep a log of everything that occurs during your hospital stay — tests, treatment and medication.

Sources: Consumer Reports, Denver Post research.