Action 9 exposes an outrageous hospital bill that you'll find hard to believe.

Dirk Budd, of Melbourne, was billed nearly $800,000 for a four-day stay in a hospital following surgery, and incredibly, his insurance company paid the bill.

Action 9's Todd Ulrich helped find the mistake that health professionals missed, and he investigates how it could ever happen.

Budd said the operation and recovery went smoothly, so he thought the hospital bill had to be a huge blunder.

"I just said, 'Holy moly,' and I just can't believe it," he said.

The bill from Holmes Regional Medical Center in Melbourne was for $772,000, so Budd called the hospital.

"The first response I got, when I finally got to someone, is, 'Well, you don't owe anything,'" Budd said.

But that's not all: Budd's health insurance, Florida Blue, then paid the bill without challenging any part of it.

Florida Blue sent Holmes Regional a check for $340,000, it's negotiated share of the $772,000.

When Budd called, he claims Florida Blue said the bill had been examined by a special panel first.

Budd said Florida Blue told him the bill was reviewed and approved.

""Because I kept questioning them," Budd said. "Doesn't anyone look at any itemized list or something?"

Health care watchdogs said it's an extreme example of a runaway health care system with few incentives to curb costs.

"It represents a complete flaw in our entire system of health care in the U.S. on what we're spending on procedures," said Michael Russo.

Budd asked for an itemized bill, and then it took just minutes to find the glaring mistake health care professionals missed. He was billed for 5,400 needles during surgery, which had a total cost $685,000.

Action 9 checked, and the average hospital bill for open heart bypass surgery in Florida is $110,000.

Holmes Regional told Action 9 the mistake had been corrected, and new billing procedures are now in place.

Florida Blue said the error was detected before the patient complained.

After the mistake was corrected, the hospital billed just $34,000 for Budd's surgery.

Holmes Regional blamed the mistake on an automated billing process, but how could that kind of mistake get past the insurance company?

Florida Blue said sometimes bills are paid and then an audit reveals problems that are corrected later.

Read the hospital's full response:

Dear Todd,

In following up to your call to me last week, I have researched the billing error you called about.

When the billing occurred for Mr. Dirk Budd’s surgery at Health First Holmes Regional Medical Center, there was an inadvertent charge error made, marking an inaccurate quantity of needles on the itemized bill sent to Mr. Budd and to Blue Cross. Our billing process automatically bills for charges. Unfortunately, the error was not identified and the incorrect supply charge was subsequently billed. When Mr. Budd received the itemized bill, he noticed the error and called Health First.

Health First responded immediately and requested an internal review of the billing. When reviewed, we found that there was indeed an error that needed correcting. Health First sent a corrected claim to Blue Cross and notified Mr. Budd. Blue Cross is currently administering the revised claim.

To detect and correct errors of this nature in the future, Health First has established an internal control process whereby charge quantities are reviewed for accuracy before being forwarded to the billing function. 

Health First regrets any inconvenience this has caused Mr. Budd and his family. If he has any questions regarding this issue, please let him know he can call Jim Slate, our Health First Vice President of Revenue Operations, at 321-434-5482. Thank you.