Not covered by Insurance?.....Never mind then.

Recent medical statement for services rendered for minor, outpatient, elective procedure.:

0125 Pharmaceuticals 375.25
0070 Anestheseological 670.00- (pre-paid)
0803 Recovery Room 803.00
0245 Post Opp supplies 175.00
-------
TOTAL DUE: 1353.25

Scratching my head and wondering about the charges not prepaid I called the hospital billing dept. I asked them to itemize each charge in further detail so that I understood what I was being billed for.

The clerk on the phone asks me if I have my medical insureance information. I say no. It was an elective procedure not covered by insurance. “Oh,” says the clerk, “Never mind then. We will drop all the charges not prepaid. You don’t owe us anything.”

Bingo. Just like that. I’m not complaining mind you. But it sounds like the insurance companies are being skinned alive to the tune of $375 for a couple of Percocets (sp?) and $803 for a room I never had ,but if I did, probably should look like a suite in NYC Waldorf Astoria. The post opp supplies must be the lovely cotton gowns and paper slippers they provide.
Bastards.

First of all, this probably belongs in the Pit.

And, no, the insurance companies aren’t being skinned alive. There are a couple factors at work here.

First of all, all charges are to be billed the same, regardless of who’s paying the bill. (It’s considered fraud if they set prices according to who’s paying the bill.)

Second, there’re usually more to these charges than you may be aware of. The line item “Pharmaceuticals” includes not only the Percocet, but the IV solutions, possibly the anesthesia medications, the antibiotic you may have had (I don’t have your chart, but most surgical procedures involve antibiotics as a preventive against infection.) “Recovery room” includes paying the nurses and techs who take care of you as you come out of anesthesia, as well as takes into account that these are monitored beds (and consequently, are more expensive than a regular bed). “Post-op supplies” covers bandages and the like.

It is, of course, your right to demand an itemized list, but keep in mind, many charges (especially for surgical procedures) are for things you don’t know you got. I’ve had to explain to patients who insist they’ve never had their knee x-rayed at XYZ hospital that the films were done during their knee surgery.

Robin

Is this necessarily true in every state? I remember seeing a copy of the hospital bill after my first pregnancy. It showed, for instance, a room charge of $X, but then after that, it showed a substantial write-off in the charges because the bill was being paid by my HMO.

I saw similar things in the billings from my physical therapist after a wrist fracture. A given procedure might be billed at $70, but because I was a member of a given PPO, the charges were reduced to, say, $45 billed to my insurance company.

It doesn’t seem very fair. If I were unfortunate enough to be uninsured, I would have to pay the full inflated cost, but if it’s paid by the mega-insurance company, the exact same services come at a substantial discount. (Presumably the discount comes in because the insurance company funnels in clients to them by having them under their PPO contract, but I still don’t think much of the system)

This isn’t what I meant. When bills (and claims) go out, the fees must be the same for every procedure. That is, if you charge $35 for a chest X-ray (cpt 71020), then you must charge everyone $35 for the same chest x-ray.

What you’re talking about is the discount that practices take for participating in various insurance plans. So, if Medicare pays $10 for that chest x-ray, the practice can bill the patient (or a supplemental insurance plan) for the amount the patient is responsible, but they must eat the balance after that. So, if Medicare pays $10, and says the patient is responsible for $2, the practice must eat the remaining $23. Other insurance companies may pay 100% of their allowed amount, but the practice still must eat the balance. The exception is if the practice does not participate with a particular insurance plan, in which case, the patient can be held responsible for the balance. This doesn’t happen that often, however. (The only time I’ve seen a practice I’ve worked for not participate was when the patient was injured on vacation and the insurance company was not local to that state.) These discounts are based on the notion that it’s better to have 100 patients pay a few dollars apiece than a few cash patients pay more apiece.

But PPOs and HMOs are also advantageous to the consumer by making a doctor’s visit cost less out of pocket, thereby making health care more accessible. My doctor visits cost $10 each. If I get sick, I don’t have to wait until payday to get help.

Robin

Hospitals charge like airlines do. They figure out what it costs them to run the procedures or rent the rooms or use the bandages. They then factor in the fact that the vast majority of their business is offered at discount, between the federal and state governmental programs as well as the insurance plans and HMO’s. Then, they figure out how much to charge those few patients who have to pay full freight ( e.g. workers’ comp patients in states without mandated reductions (keeping in mind the comp carrier or the self-insured employer actually pays)) in order to make it all balance out with a little bit of (or sometimes more than a little bit of) profit. That price then becomes the listed price for the procedure.

My ex-wife was charged $1300 in 1988 for the cost of delivering our second child. The insurance co. paid $350 of that per pre-arranged contract with the hospital. The remainder was a contractural write-off. Had we been non-covered patients, had we not been under Medicare or some other government-sponsored health benefit program, we would have paid the full amount, unless we could have convinced the hospital to reduce the charge.
Next time you buy round trip tickets from LA to Chicago for $250, think about this, and wonder who on the plane has had to purchase the same sort of service for $1700.

Thanks Robin but you still haven’t explained to me why they chose to drop the charges for me. It’s not like I’m a prefered client or hopefully ever likely to be.

Either I had $375 worth of meds or I didn’t (It’s possible that I did). Either I had an $803 room with a view and lots of monitors and staff looking after me or I didn’t. (For the record, I had a chair behind a curtained off area the size of a small bathroom in the post op room with an IV and a blood pressure monitor.) Either I had lots of bandages and various post opp supplies like splints and casts totaling $175 or I didn’t. (For the record, I had a couple of gauze pads and an acer bandage.)

Don’t misunderstand. My heart does not bleed for the insurance companies. Some of them deserve a special place in hell all their own. It’s just that it seems to me that suspect charges like these get passed on to the clients’ premiums. So yes, the hospital did not lose money on me because it will collect the $1300 from somebody else who is covered by a very generous insurance policy. My impression, coming away from this experience, is that this kind of thing happens quite deliberately (though I can’t speculate on how prevalently) and nobody is really motivated to blow the whistle. I certainly don’t want to pay the suspect $1300. The guy covered by insurance is not going to care about the details on his bill. The insurance company just passes on the expenses to client premiums and by then, it’s too late to trace back the rise in cost of insurance to any one particular event such as this.

Maybe this does belong in the pit. I trust the mods will do the honours if that’s the case.

It’s also entirely possible that what you prepaid before the procedure was intended to be payment in full, and for whatever reason, you were billed the entire amount.

Robin

I’d like to believe that’s true but I’m finding it hard to do so. I was asked for my insurance info when I called to get a detailed account of the charges. When they discovered it was not going to be covered they summarily dismissed the charges entirely.

This may just be a clerical error as you say, but I remain dubious given the chain of events during my conversation with billing personel.

This is too large an amount not to be recovered. Most hospitals will work out a payment arrangement of $X per month until the bill is paid. That it was summarily written off indicates to me that what you prepaid was to be accepted as payment in full. And FTR, it’s routine to request insurance information during the course of an inquiry. And you can always call back and ask for the specific reason it was written off.

It’s a gift, QuickSilver. How it got to you isn’t that important.

Robin