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The Practice of Split Billing

by | Feb 17, 2015 | Workers' Comp Industry

At AAA Copy & Review Services, we track certain trends with the applicant copy companies. One such trend is, “Which copy companies have the highest average invoice total?” But that statistic alone doesn’t always tell the whole story of just how much some copy companies really charge per job.

For this article, we looked at data provided by approximately 130 total claims examiners from the San Francisco and Los Angeles offices of one large insurance company. Based on nearly 20,000 copy service invoices reviewed for this carrier through the end of September 2014, we came up with a list of the top 10 most expensive copy services based on highest average invoice total. The number one copy service on the list had an average total of $408.16 per invoice. However, again, this does not paint a complete picture of how much this company is actually billing.

Some copy companies have learned that they can “split” one job into several bills, hoping that each of these smaller invoices will fly under the radar and be paid in full. You might see one invoice for a basic charge and subpoena; one invoice for mileage, pages, and shipping; and another invoice or two for additional sets of records. So how much is really being charged for one job? We tracked the number of instances where multiple invoices were issued by the same copy company, for the same location of records, on the same claim. We then took a total of these multiple bills to come up with what we call the “highest average cost per location.”

The previously mentioned “number one” copy service – the one with the average invoice total of $408.16 – also topped our list of the copy services who had the highest average total cost per location. This company racked up 64 instances of issuing multiple bills for a single job, with a true average total of $876.53 per location of records. This is a 115% increase over this company’s average single invoice total, which really illustrates how costly this billing tactic can be for claims administrators.

As egregious as that company’s billing is, there is another copy service that we’d like to really focus on for this piece: The third place company on the list of copy services with the highest average total cost per location. Why focus on the third place company instead of the company we were just talking about that tops both of our lists? Because the third place company doesn’t even register in the top 10 for highest average single invoice total. That’s right – they go from flying under the radar in relative obscurity, issuing low-totaled invoices (compared to their peers, at least) to suddenly jumping up to the number three most expensive company overall when total cost per location is measured.

This company had twice as many instances of issuing multiple bills per job as the number one company. As mentioned, they weren’t even among the top 10 worst offenders as far as their single average invoice totals were concerned, but their average total cost per location of records weighs in at $588.77.

Let’s go through one specific example of this company’s typical method of billing.

invoice1

The first invoice issued was for the location of Dr. Glenn Marshak in Beverly Hills. The following charges were billed:

  • BASE RATE
  • CHECK FEE/ ADVANCE FEE
  • PARKING REIMBURSEMENT [Sidebar: This company bills a $2.50 parking fee for every single location they visit! They must be extremely consistent about where they choose to park.]
  • SERVICE OF PROCESS
  • SUBPOENA PREP.
  • TRIP CHARGE
  • WITNESS FEE
  • PENALTY
  • INTEREST

This invoice totals $149.14. Sounds like quite a value compared to that other company with the $400 average invoice total! But wait, where are the records? What did we get for our $149? It looks like they served a subpoena, but did they even finish the job? Perhaps they’re just crossing their fingers in hopes that we’ll just pay in full, no questions asked. After all, is it really worth taking the time to analyze and object to this bill for such a trivial amount of money?

invoice2

But they’re just getting started. This next invoice totals $148.53 and is also for the location of Dr. Glenn Marshak – at his other office across the street (note the different address). The exact same charges from the previous bill appear on this bill as well (including that $2.50 parking reimbursement). Okay, so it’s another relatively cheap bill, but we now have a running total of $297.67 between the two bills. Furthermore, we still don’t see that any records were copied, and we still don’t really know what we’re being charged for. Let’s keep going and see what else we’re in for.

invoice3

With the third invoice, we’re back to the original address for Dr. Marshak from the first invoice. We’re now seeing a different set of charges:

  • ADDITIONAL SET [286 pages]
  • BATE STAMPING
  • CD -(PDF)
  • CLERICAL
  • DELIVERY
  • FIELD LABOR
  • HANDLING
  • MILEAGE SET UP
  • PARKING REIMB. [It’s back again! Another $2.50. But why did they abbreviate the word “REIMBURSEMENT” as “REIMB.” this time? More on that later.]
  • PRINTING FEE (PER PAGE) [286 pages]
  • SCANNING (PER PAGE) [286 pages]
  • PENALTY
  • INTEREST

This invoice totals $599.14 for 286 pages of records. Not the worst copy bill we’ve seen, but pretty darn high. We’re actually being billed for four sets of records here: Two paper sets and two CD sets. This is definitely excessive, but a far worse offense is the fact that our current running total for all three invoices so far is up to $896.81.

That has to be the end of it, right? Four sets of records were sent out and we’ve been billed nearly $900.

invoice4

Nope! One more invoice for $210.81:

  • ADD’L SET [286 pages]
  • BATE STAMP
  • CD -PDF
  • CLERICAL SERVICES
  • DELIVERY CHARGE
  • HANDLING CHARGE
  • SET UP CHARGE
  • [No premature penalty/interest charges this time – very charitable of them!]

So, they cranked out another printed set and another CD set. That’s six sets of records total – way more than is reasonable or necessary. They have also repeated several previously billed items such as clerical, Bates stamping, handling, set up, etc. (Are all of these charges really necessary when all they did was essentially burn another CD and hit the print button again?)

Here’s something that might be even fishier than the duplicative charges and excessive pricing. Earlier, if you’ll recall, we saw that “PARKING REIMBURSEMENT” on one invoice became “PARKING REIMB.” on the next invoice. On this fourth invoice, we have several more repeat charges that have changed ever so slightly in their wording:

  • ADDITIONAL SET is now ADD’L SET
  • BATE STAMPING is now BATE STAMP
  • CD -(PDF) is now CD -PDF
  • CLERICAL is now CLERICAL SERVICES
  • DELIVERY is now DELIVERY CHARGE
  • HANDLING is now HANDLING CHARGE
  • BASE RATE and MILEAGE SET UP are replaced by SET UP CHARGE

What is the reason for these subtle changes? The truth is that this is an attempt to avoid having these charges flagged as duplicate items by automated bill review software. Very clever! (Luckily, at AAA Copy & Review Services, we have actual human beings analyzing every single line item and looking for this sort of thing.)

Remember that second invoice, for Dr. Marshak’s other address? No invoice was ever issued for actual records from that location. That second invoice is just kind of floating in the ether as an unfinished job, with no proof that a subpoena was actually served to that address, and no proof that applicant’s attorney really asked the copy service to subpoena both addresses. Even if that were the case, the copy company could have simply called both locations to ask which one had the records. Is it really reasonable for them to ask us to pay a total of $300 for them to serve subpoenas and park their car all over Wilshire Boulevard (at $2.50 a pop) in order for them to figure out which facility had the records?

So what’s our grand total for the 286 pages of records? $1,107.62 split among four invoices. We really have to hand it to this company for figuring out how to repeat the same vague charges over and over and how to hide their excessive pricing by distributing it over multiple invoices – but we’re onto them, and now you are, too!

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