Auditor Looks For Gold In Hospital Bills Tracking Down Billing Mistakes Pays Dividends For Seattle Company

Brian Des Lauriers is staking his entrepreneurial future on a simple belief: There’s gold in your major hospital bills, and in parts of those bills that insurance companies refuse to pay.

Des Lauriers hopes the new company he’s running from his Bellevue home, ER Refunders, will strike it rich by finding billing errors for those who have been hospitalized, or for their employers. The result: refunds from hospitals and insurers.

“My small business is not here to point any finger at hospitals. That’s not our function,” he said. “We just want to find any errors and correct them. Errors happen.”

Des Lauriers believes a hospital’s maze of services - including nursing, pharmacy and food - sometimes makes it difficult to keep track of charges accurately. In addition, doctors could change a course of treatment, or a patient might reject some prescribed services, but those doing the billing might not get the word.

Likewise, insurers could mistakenly believe their plan doesn’t cover certain medications or hospital services and refuse to pay those portions of a bill.

He bought manuals that decipher billing codes for all manner of services, and he is contracting with private auditors to go over his customers’ bills. He’s aiming particularly at bills of $10,000 or more.

Individuals can have their bills audited for a $25 processing fee and a 45 percent contingency fee - that is, ER Refunders gets 45 percent of any refund resulting from the audit.

Des Lauriers also wants to audit self-funded insurance plans, such as those offered by many companies and some labor unions. Corporate fees run $10 per employee for processing and a 35 percent contingency fee.

Sam Baxter, chief financial officer at Overlake Hospital Medical Center in Bellevue, isn’t overly concerned about Des Lauriers’ new venture.

“I think probably for the consumer that would sound like a good thing,” Baxter said. “As a hospital, we work hard to make sure our bills are accurate. However … errors can happen.”

He added that it will be interesting to watch how ER Refunders fares. A flourishing business could demonstrate there at least is problem enough for one auditing company to make a go of it.

There have been many claims of rampant billing problems in the health care industry nationwide, but there is little objective documentation.

A decade ago, Equifax Inc., a corporate information company in Atlanta, found that 97 percent of the hospital bills it audited for its client insurance companies contained errors, said company spokeswoman Kristin Petrella.

However, the insurers submitted only the bills that looked as if they might have a problem. The companies paid, without question, the large majority of claims, Petrella said.

Des Lauriers was born in Montreal but grew up in Seattle’s University District. He lived in this area most of his life and started a number of small businesses, from Faded Dreams, a used clothing emporium dealing mostly in denim, to Informational Communications Systems Inc., which had as its primary product a briefcase computer system.

He began researching a new business venture a couple of years ago, while he was working for the Better Business Bureau in Florida. He said he found only three other businesses auditing medical bills, none in the Northwest.

“It immediately hit me because the health care industry is in such turmoil and health care bills are spiraling. It just seemed like a natural,” he said.

He cites the case of his father, who fell and shattered his kneecap two years ago and, while in a Southern California hospital, suffered a stroke. Des Lauriers doesn’t fault the hospital. But he said the bill ran to more than $100,000, and his father was responsible for 20 percent.

He doesn’t know of any particular errors in that bill - his company wasn’t yet formed - but suggests there’s a chance for mistakes in any bill that large.

Des Lauriers’ company is a three-person operation, with everyone wearing several hats. His wife, Lake, is office manager and handles correspondence, billing and the like.

Matthew Osborn, a University of Washington business student, is chiefly focused on marketing. He relishes the challenge and figures there’s plenty of room for the business to succeed.

“There’s a huge demand for our services out there. My dad’s a physician and I’ve talked with him about it. It’s out there,” said the 20-year-old graduate of Newport High School.

Osborn believes he can juggle school and launching a new company for now, but concedes that down the road he might have to give up school for awhile.

“I’m having a lot of fun and I can’t learn this anywhere else,” he said.

Des Lauriers and Osborn are in the process of contacting companies throughout the area trying to attract accounts, and they plan to leave racks of leaflets in pharmacies to pick up individual customers. Most of their business will be done by phone or fax machine, they say.

Des Lauriers hopes that within a few years - perhaps sooner - he’ll be able to expand throughout the region by signing up agents in other cities much the way insurance companies do. And he’d eventually like to branch out beyond medical bills.

“I would like to set up a central auditing bureau that finds errors in all kinds of things,” he said.