Obscene medical bills for minor procedures. How can hospitals defend these charges?

Lies is too strong a word, I think. Most of the time it’s people — doctors, government, malpractice insurance, attorneys, health insurance, and patients — trying to get the most milk for the least moo.

Everybody’s tired of being milked, so the barriers to getting good low-cost healthcare keep getting higher to hurdle.

There’s not much else I can add to this without it turning into a debate or a diatribe.

You’re refering to doctors who don’t normally work in the hospital, but can nevertheless treat their patients there?

Okay, many interesting points made here, but…what about the $80 plastic puke-pan or the $30 box of tissue or the other items used for “personal care” while in the hospital? C’mon, how much is that cheesy toothbrush really costing? How can they knowingly charge $30 for a 99 cent box of tissue? Labor to walk it into the room for you??? Why would insurance companies even consider paying these ridiculous charges?

They don’t, usually. Especially if the insurance company is contracted. Some procedures are paid on a per diem basis regardless of the charges. While other are paid per procedure. Usually the only time all the charges are considered are when the patient hits the stoploss level of the contract (usually in the $50,000 range). At that point, the balance of charges are paid at a percentage.

In the US, most primary care physicians are not hospital-based but see their patients in the office. But when the patients are ill enough to be hospitalized, these doctors admit them to a hospital, and attend to their needs while getting whatever consultations are appropriate (if any) from specialist doctors. These primary care doctors need to be granted privileges by the hospital to work there.

Other specialists, such as surgeons, have offices where they see their patients, but do much of their major work in the hospital. They too need privileges from the hospital to work their. Emergency Medicine physicians do all their work in the hospital.

So some doctors need hospital privileges more than others. The hospitals know this, and many of them in the US these days are tightening their financial controls on these doctors, by insisting that they rent office space from the hospital (where it’s really expensive) if they want to use the hospital operating room or have admitting privileges. There are other ways that hospitals are using to ensure the physicians who need to use a hospital better provide a bigger revenue stream for the hospital.

The above is anecdotal, reflects my own experiences and those of physicians I’ve worked with, and also read about in many of the professional journals which reflect on the current state of US health care.

I’ve no dog in this fight: I’m no longer affiliated with any hospital. Many primary care doctors have opted for this, they turn their patients over to hospitalists, or physicians who specialize in taking care of hospitalized patients, when their patients need hospitalization.

Frankly, it is not economically feasable for many primary care doctors to take care of their own patients in the hospital. Insurance companies pay quite poorly to physicians for medical management of hospitalized patients (the real money is in doing procedures and getting paid for that.) It also takes a big chunk out of the doctor’s time to go to the hospital to see the patient, when they could see (and bill for) 4-8 patients in the office at the same time.

That was a really overlong answer to a simple question. Sorry.

Maybe for the hijacked OP. But not for me, because it made your explanations and previous statements way more clear.

There are many reasons why a 99¢ box of kleenexes cost $30. One that has already been mentioned is the cost-shifting due to poor Medicare/Medicaid reimbursement. Another is the fact that hospitals, unlike physicians, radiology clinics, pharmacies, etc. cannot turn anyone away solely because of their inability, or even unwillingness, to pay.

One that really, really needs to mentioned, though, is the ineptitude in the billing office. I have worked in the billing offices of three of the major area hospitals.

So many medical providers pay their billing staff around $10 per hour and then wonder why their collections are in the toilet. Hello, you hire people whose applications and resumes are loaded with grammar and spelling errors, and you expect them to be able to handle complicated business and financial matters? If you want people to handle the job that can literally make or break you, you have to pay them to do that. LIke what is happening in the teaching profession - the good, competant people leave after a few years when they realize they can double their salaries by changing careers.

Hospitals are no different - in fact, they’re the worse offenders in the entire medical industry - next to billing services. Two of the chains I worked for had some of the lowest salaries in the industry. The incompentence and ineptitude started from the bottom and went all the way to the top. The software is in place to ensure that no bill or appeal goes past the contracted filing deadline, but the staff either ignores it or doesn’t know how to use it, and no one enforces compliance with policies and procedures or does more than cursory training. Since the salaries are so low very few experienced people are on staff, and of course promotions are made amongst this pool of inadequate employees. Of course you get to a the upper level management and they’re their because of their business degrees. They have never actually sat at a billing desk, so they don’t even understand the concept of maintaining an electronic tickler system to ensure nothing goes past filing deadline.

Then there are the staff that don’t even know how to read an Explanation of Benefits so either spend weeks appealing an item that has no basis for appeal, or converesely writing off an item that is appealable and should be appealed due to its large dollar amount.

The stuff that gets written off in these hospitals boggles the mind - and it’s stuff that’s getting written off only because of staff ineptitude and incompetence. We aren’t talking thousands here, folks, we’re talking millions.

But that was only at two of the hospitals - let me tell you about the third one. I was hired on a contract basis specifically to clean up old Medicare balances. OMG. First of all, one of the reasons the Medicare had gotten so bad was because the biller they hired to do it had no previous billing experience WHATSOEVER. And one of the reasons that they had to hire outside contractors to do the job was because NO ONE EVER ACTUALLY DID ANY WORK THERE. I am NOT joking. Let me describe the typical day of the typical biller at a certain smallish hospital in Fort Worth, Texas:

First you park right up against the building and run in and clock yourself in. Then you run back out to your car and move it to the employee parking lot three blocks away and walk back to the building. As you head to the billing office you poke your head into the volunteer office, the cashier’s office and the HIPAA office and greet and chat with any of the staff you happen to know. You do the same once you get to the billing office and make your way to your desk. Once you get to your desk you busy yourself with turning on your radio and checking your hair and makeup. Once you’re reasonably assured that everyone has arrived who’s going to, you make your daily breakfast trip to the cafeteria. You bring it back to your desk and while you’re eating your “chatting with” (read: shouting over the cubicles at) the rest of the staff.

Finally it’s about 11:00 and it’s time to get down to those personal phone calls you’ve been needing to make. You know, the important stuff like cancelling the DirecTV and planning your 6-year-old’s birthday party. When that’s finally all settled it’s time to go around from cubie to cubie and determine what everyone’s lunch plans are. Since there’s no good close places, and bringing your lunch is not “cool” (and anyway, the breakroom certainly wouldn’t hold everyone anyway, and it’s hot and smelly in there) you’re forced to take an extended lunch. No problem as long as there is someone who’s taking a later lunch or working through lunch (er, sitting through lunch because they need the overtime) becuase then they can actaully clock everyone else out about ½ hour after they leave. And, of course, as long as someone brings a cell phone so that if lunch is going to be more than 1½ hours they can call this same person and have them clock everyone back in. Then the lunch groups go to the closest exit and wait while the folks who have volunteered to drive go the three blocks to the car and come back and pick everyone up. This is reversed for the trip back, and of course it would be rude to leave the drivers to walk in the building all by themselves so again they wait by the closest exit.

Now it’s about 2:30 and you’re thinking maybe you should fire up your computer. Of course, you remember a goofy email you got that you want to send to everyone. Of course, you never really got the hang of Outlook because you never had any training on it and you crash your computer trying to send the email. So you call the unit secretary over, the one who also as absolutely no IT experience despite the fact that it is in her job description that she will maintain all the computers in the unit. So after 30 minutes of the pair of you tinkering around with a machine you know nothing about (while such gems are heard coming out of the cubie such as “Cookies? What’s that?”) the IT whiz decides you need a new machine and calls the REAL IT folks to bring one down. Y’all finish tinkering with the machine just in time because the birthday party is starting! A ½ hour later everyone makes it back to the desk just in time to hear that the group’s favorite song is playing to of course everyone has to get up and dance in the aisles. The end of the workday is near so of course now you have to prepare to leave your desk unattended overnight - sort through all the papers, mail, and charts that people have thrown in your inbox and put them in the pending box or another person’s inbox where they belong. Check your make-up for the drive home, turn off your desk light and radio, then pull your chair into the aisle to join everyone else to get up to speed on the latest gossip.

Then walk out to your car and pull up to the building and run in and clock yourself out, and chat with everyone on your way out about how tired you are from having worked all day.

This is NOT an exaggeration, or even a “composite”. I worked there 7 months and too many of those days I saw people who never once even turned their computers on.

The business office manager was completely clueless. Why? Becuase she never walked the floor of the office she was charged with managing. Why? Because if she did, someone might actually ask her a question, and since she had never managed a hospital business office before, she would be shown up for the fraud that she was.

And the powers that were kept wondering why the hospital was in so much financial trouble. They eventually sold it.

And this, my friends, is why your hospital must charge $30 for that 99¢ box of kleenexes.

As to the assertion that hospitals manage their costs/expenses/charges closely so that they don’t make much profit, I would like to add that as of about 5 years ago, when I heard this, our local hospital, a teaching hospital affiliated with a large Big-Ten medical school, had a cash endowment of over two billion dollars. I believe that the equations that determine who pays what is in part a cost shifting issue, but it is absolutely tied to profit. xo, C.

Wish I’d known that over the last 3 years. Could’ve saved me, my employer and the Missus thousands.
Is that ACTUALLY true?
I imagine that as soon as I mentioned “no intention to pay, will not identify myself” my situation would have a high likelihood of being declared non-emergency, regardless of the situation.

Every time I am admitted to the hospital, Medicare allows then to charge me $985.00 as a deductible. If the visits are more than 6 Mo. apart. IIRC

I have friends who have been turned away from hospitals because of a lack of insurance or cash. They said they only had to treat immediate life
threatening injuries. A compound fracture with bone sticking out did not qualify.

50% of the folks I know who go to the hospital, come out with a staph infection that they did not have when they went in.

Getting sick or hurt enough to need hospitalization can kill ya or break ya and it sucks…

YMMV

Let me add a Canadian perspective.

I work in an emergency department in a small town. There is no local walk in clinic so many people come to the emergency department for episodic care, such as toenails with fungus.

A few types of fungus grow on toenails, but most respond to the same medicines. In the emergency setting, I would not always do a biopsy. “This medicine will often work for this condition, and if it persists you may wish your family doctor to take a biopsy.”

If you are Canadian, the system would pay me marginally more than a family doctor to see the patient, and little extra for taking the biopsy. Canadians pay for their medicine through their taxes, so the patient has no idea what the doctors and hospital get paid (they tend to grossly overestimate this, doctors make money by seeing lots of patients). I’d get paid between $35 and $75 for this, but it would probably only take five or ten minutes.

If, on the other hand, you were American (or Canadian without insurance since you let it lapse, are an under the table immigrant, etc.) and came to my hospital since it was the only local place to get medical care… you would be charged $300 or so just for coming in the emergency room for any reason. You would pay double the fee for X-rays and tests. The doctor can also charge you what they wish (though often double the usual rate; I tend to charge the same rate I would get from a Canadian since I sympathize with travellers who run into trouble, especially those who travel without insurance).

Many family doctors don’t bother to get hospital privileges since, until recently, payments for hospital care were considered too low by many GPs for the hassle. In this case, their patients are cared for by internists or hospitalists. Doctor payments have increased with time, but hospitals have reduced some other payments to doctors, so insurance companies and hospital administration are less of an issue here. Medical insurance is subsidized by the provinces and as a result, obstetricians can practice without paying all of their profits for malpractice insurance.

$1100 is an awful lot, and inexcusable if the hospital did not clearly define itself as such and explain the fees up front. But if you came as an American to my hospital emergency department without insurance, you might still well pay for $400 ($325 US).

It depends on how severe your injury is. If you just need a few stitches, they can probably get away with telling you to beat it. If the cut is big enough so that it won’t stop bleeding without a physician’s care, they absolutely must treat you. It is the law.

And to add to lorinada’s excellent post (which explains why I don’t work in billing anymore and went back to school), I’d like to add that, for some research hospitals, there’s so much in grant money that the individual departments and physicians have no incentive to pursue insurance reimbursement. For example, the radiology department had something like $2 to 3 million in billable services, but the individual docs didn’t care because they themselves and their department didn’t suffer if that money weren’t collected. I got next to no help from that department, and my managers made it worse by refusing to let me contact them directly.

Robin

Well, as a (current) biller for a surgery practice, I would also like to point out something that was briefly touched on in previous posts: discounts (aka write-offs.)

We’re contracted with approximately 20+ insurance companies, including Medicaid & Medicare. There are three things going on when you’re contracted: the fee schedule you (the doctor’s office) sets, the contracted fee schedule you’ve agreed to from the insurance company, and what actually gets paid. We might put, say, $480 on the claim to the insurance (our fee schedule) for a procedure, our contract says that insurance is supposed to pay us $285 for that procedure, but the patient’s policy says that the insurance will cover 80% of that, so the patient owes us the other 20%.

The piece of this that a lot of people don’t realize is that we CAN’T bill the patient for anything other than that 20% - because we’re contracted providers. The rest has to be written off. And there’s no guarantee that the patient will actually PAY us that 20%…which is why collection agencies make such good business.

I’ve known places like what lorinada was referring to; thankfully we’re not that way…but there’s only 2 of us doing the billing/insurance collections. Yeah, I could get paid more in a different profession…and probably should go back to school. But I have 5+ years of experience & this pays my bills. It’s also sort of a mission of mine to help explain how it REALLY works to people.

I was horrified last week when a patient’s mother asked me about a bill for lab work we ordered from one of the local hospitals. It was for allergy testing…we charge around $20 per allergen (running approximately 45 allergens), probably get paid $11 per allergen, and it costs us $7 per allergen to run the test…so we make a $3-$4 profit off the whole thing - if any. The hospital charges either $72 or $102 per allergen…so this patient had a bill (before insurance) of over $4000.

I was horrified, our physicians were horrified…but due to the insurance the patient had, the tests had to be run out of the hospital lab, not our lab…and there wasn’t really a damn thing we could do about it.

The whole system needs to be reorganized, but the insurance companies certainly aren’t going to let THAT happen…and probably, neither are some hospitals.

$3-$4 profit per allergen. Ooops.

But then, if the providers would negotiate for better reimbursement before they sign the contracts, they wouldn’t have to cost-shift so much. But then, the insurers would all raise their premiums…sigh there is no easy answer. But I know for a fact most physicians just roll over (or should I say bend over?) when it comes to demanding reasonable reimbursement. They just blindly sign those contracts because they’re afraid to assert themselves, thinking the insurers will just yell “Screw you then! Your type is a dime a dozen anyway!” or somesuch thing. They also refuse to negotiate for other terms that would allow better collections, such as a more reasonable filing deadline, reversion clauses, etc (although many state insurance boards are stepping up in that respect). Just onelook at Monopoly HealthCare’s…oops, I mean United HealthCare’s profits should teach any provider to negotiate better.

I would also like to respond to those that are shocked…shocked!…that hospitals don’t reveal their fees upfront:

How in the world is the admissions office supposed to determine exactly what the physician is going to order? What diagnostic tests, what procedures?

Sorry, but it is an impossible task.