Wednesday, July 6, 2011

Hospital Overcharges Of 436 Percent Are Commonplace


It was just a normal situation that required a few days in the hospital. I had been down-sized in my job of over 14 years and benefits had run out many months ago. The temporary agency I was able to find work with had no health insurance benefits. That made the perfect scenario for hospital overcharges.

Granted, my health was not in such good shape and I was glad to be in the immediate care of trained nurses and doctors. After three days however, I was being wheeled out with my discharge papers, newly prescribed medicines and health instructions feeling a lot better than when I entered. Another thing I was leaving with that I didn't have three days before was a whopping bill of over $165,000.

My bill at the hospital was almost $2400 an hour! Considering the usual nature of my illness and how often such procedures are done, the amount is staggering.. Now, I didn't get to see the bill as I left. No, it came in the mail about two weeks later and almost caused me to collapse upon seeing it.

I later found internet sites that told me what hospitals normally charged for specific procedures. I found sites that gave the price Medicare and Medicaid reimbursed for medical and surgical procedures by hospital.

Based upon that information, my bill should have been $37,835. The hospital overcharged me $127,165 or put differently, I was overcharged 436%. The internet site, American Hospital Directory discloses hospital mark-ups and confirms the 436% I experienced fits exactly to what my hospital charged me.

So, what is the real story? From additional information I have been able to gather from the American Hospital Association, hospitals "charge" the same for everyone. What the hospital accepts as full payment differs from person to person, group to group and payer to payer. Confusing? Yes!

Who pays the most? Me. I pay the most as a person without any medical insurance. Hospitals stick it to me and charge their maximum rates. Others are companies where their workers have been injured (in most states without specific tort reform) and people who are at fault in auto accidents also pay the highest rate structure hospitals have. Additionally, in some out of network situations even insured patients are charged at the highest Chargemaster rates.

After that, specific healthcare plans pay a seriously reduced rate depending upon how much they were able to "negotiate" downward on the payment scale. Typically, most major health insurance plans only pay 50 cents on the dollar or less for hospital bills.

The lowest pricing appears to be what Medicare and Medicaid pays for services. The amount Medicare and Medicaid pay is purposely designed to provide a "reasonable" profit to the hospital even though the amount they pay is about 10% of the amount I had to pay!

Ok, if the US Government pays hospitals only a small fraction of what I was charged, and "reasonable" profit was included, what is going on when poor saps like me are forced to pay a rate so much higher than anyone else? Who painted the target on my back? More importantly, how can an industry in this country be so unbalanced and unwilling to provide open information about pricing? Such billing discrepancies certainly are not indicative of the open market system this country prides itself to have.

Yes, charging what the market will bear is normal, but charging for specific demographics is not. For that reason, the Senate's Finance committee has been investigating hospitals method of billing. Some are charged full amount and others given deep discounts. And, according to the Chair, Charles Grassley (R-IA), he is not buying the industry's excuse.

The way that hospital fund themselves reminds me of what a professional fundraiser once said, "Fundraising is a lot like sausage. A lot of people buy it, but you never want to know what goes into it." There seems to be more and more people like me who are questioning how hospitals bill, why they bill what they do and how they can get away with it. Hospital overcharges cannot continue.

So far, I have only pointed out billing practice irregularities which is standard billing practices for most hospitals. I haven't even started on billing errors, hospital fraud or padding. That constitutes another $5 trillion a year. That is another story.




I was contacted by Southwest Medical Bill Review & Recovery to write an article about my experience with a recent hospital visit. The article above reflects my overall hospital visit.

I don't think my case is unique. I think that hospital errors and overcharges happen all to frequently, by one account up to 90% of all hospital bills have errors and overcharges.

I want to thank Southwest Medical Bill Review & Recovery for their help in resolving this case. I would encourage everyone who gets a hospital bill in the mail to contact a professional and at least consult them for alternatives. http://www.southwestmedreview.com Southwest Medical Bill Review & Recovery



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