Are hospitals allowed to do this? [Costs quoted vs. actual]

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
toto238
Posts: 1880
Joined: Wed Feb 05, 2014 2:39 am

Are hospitals allowed to do this? [Costs quoted vs. actual]

Post by toto238 » Tue Aug 12, 2014 6:34 pm

So I had a routine procedure done at a hospital and was quoted a total price of ~$1,200 for everything before having the procedure done. It was a soft quote, and they stated it could vary.

But then a month later I've now received 3 separate bills (1 for the hospital, 1 for the doctor, 1 for the laboratory) that add up to about $3,000. Nothing non-routine occured during the procedure. There were no surprises or further treatment. The entire procedure was outpatient.

They have a financial assistance program at the hospital I'm trying to apply for but my income may be JUST a touch too high to qualify (I probably work too much overtime).

My question is what options do I have available to me? If I had known the cost would be more than DOUBLE the quote, I never would've done it. It was just a test that my doctor thought may be prudent and could've waited a year or two until I was in a better financial situation.

On the plus side, my deductible is $3,000 so if I end up stuck with this entire bill now my insurance will actually start paying for things.

So should I file a complaint somewhere? Is it worth taking to court? Or should I just suck it up and pay this massive bill?

letsgobobby
Posts: 11577
Joined: Fri Sep 18, 2009 1:10 am

Re: Are hospitals allowed to do this?

Post by letsgobobby » Tue Aug 12, 2014 6:43 pm

Who provided you the original quote? The doctor, the hospital, or the lab? Each entity is likely its own business, and bills and collects separately for its portion of service provided.

User avatar
Grandpaboys
Posts: 878
Joined: Sun Mar 04, 2007 9:16 am
Location: Texas

Re: Are hospitals allowed to do this?

Post by Grandpaboys » Tue Aug 12, 2014 6:49 pm

It is normal to have bills from hospital, lab and doctor. Maybe you misunderstood and assumed your soft quote covered all three. You will have to decide on what basis your where quoted. However hospitals are negotiable and it would be worth a try to give them your side and see what you can reap.
Good Day | GP

TDAlmighty
Posts: 170
Joined: Fri Dec 06, 2013 1:01 pm

Re: Are hospitals allowed to do this?

Post by TDAlmighty » Tue Aug 12, 2014 7:15 pm

Most likely, the only thing you can do at this point is to look at specific items on the bills and contest them. Either they were not done, not done the way you were told, or not done for the prices that you agreed to (you must be able to prove this somehow).

Also make sure that they billed you as an in-network patient (if you were) according to the negotiated rates between them and your insurance company. The easiest way to verify this is by logging onto your insurance company website and looking at the EOB (Explanation of Benefits) for each bill. The "amount you owe" should match the bill.

Short of contesting specific items on the bill, there is not much you can do. I know this from experience being "balanced-billed" and trying to fight it. At the end of the day, they dropped a couple of charges and gave me a 20% overall discount just to get me to stop wasting their time.

User avatar
Crimsontide
Posts: 723
Joined: Fri Oct 25, 2013 5:32 pm
Location: DFW Metromess

Re: Are hospitals allowed to do this?

Post by Crimsontide » Tue Aug 12, 2014 7:43 pm

Yes they are. I'm a little jaded after dealing with the healthcare industry over the last 5 years (DW is a five year cancer survivor) and we have seen some ridiculously inflated medical bills over this time. $3k for ANYTHING related to a hospital procedure is cheap. The only advice I can give is to review each line item and question the validity if in doubt.

User avatar
grabiner
Advisory Board
Posts: 22688
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: Are hospitals allowed to do this?

Post by grabiner » Tue Aug 12, 2014 8:30 pm

TDAlmighty wrote:Also make sure that they billed you as an in-network patient (if you were) according to the negotiated rates between them and your insurance company. The easiest way to verify this is by logging onto your insurance company website and looking at the EOB (Explanation of Benefits) for each bill. The "amount you owe" should match the bill.

Short of contesting specific items on the bill, there is not much you can do. I know this from experience being "balanced-billed" and trying to fight it. At the end of the day, they dropped a couple of charges and gave me a 20% overall discount just to get me to stop wasting their time.
If you are in-network, you can't be balance-billed by the hospital, although you could be balance-billed by a doctor at the hospital who is not in the network, or for any charge which your insurance does not cover. The hospital's agreement with your insurer specifies the amount it is allowed to charge for the procedure, and your insurer will then pay according to its rules. Thus, if the hospital's standard charge is $1200 but the negotiated rate is $800, the hospital will only receive $800, which may come from either you or your insurer depending on your deductible. Conversely, if an out-of-network doctor charges $1000 and the insurance rate is $700, the insurance will base its payment on the $700 (applying $700 to your deductible, or paying the out-of-network portion of the bill if you have met the deductible), and the doctor can balance-bill you for the other $300.
Wiki David Grabiner

User avatar
arcticpineapplecorp.
Posts: 3205
Joined: Tue Mar 06, 2012 9:22 pm

Re: Are hospitals allowed to do this?

Post by arcticpineapplecorp. » Tue Aug 12, 2014 8:50 pm

Don't forget to know what you should be paying for the procedure(s):

check out the following page and look up the procedure based on your area so you have some room to possibly negotiate, especially if you're being overcharged.

https://healthcarebluebook.com/page_Default.aspx
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

User avatar
arthurdawg
Posts: 902
Joined: Mon Jun 02, 2008 7:47 am

Re: Are hospitals allowed to do this?

Post by arthurdawg » Tue Aug 12, 2014 8:55 pm

Can you break down the 3000? I think others are correct that the hospital likely didn't include the physician's charge in the estimate. I doubt it was 1800$ however!
TSM / SCV / FTSE Big World / FTSE Small World / REIT / TBM / Int Term Tax Exempt

TDAlmighty
Posts: 170
Joined: Fri Dec 06, 2013 1:01 pm

Re: Are hospitals allowed to do this?

Post by TDAlmighty » Tue Aug 12, 2014 9:07 pm

grabiner wrote:
TDAlmighty wrote:Also make sure that they billed you as an in-network patient (if you were) according to the negotiated rates between them and your insurance company. The easiest way to verify this is by logging onto your insurance company website and looking at the EOB (Explanation of Benefits) for each bill. The "amount you owe" should match the bill.

Short of contesting specific items on the bill, there is not much you can do. I know this from experience being "balanced-billed" and trying to fight it. At the end of the day, they dropped a couple of charges and gave me a 20% overall discount just to get me to stop wasting their time.
If you are in-network, you can't be balance-billed by the hospital, although you could be balance-billed by a doctor at the hospital who is not in the network, or for any charge which your insurance does not cover. The hospital's agreement with your insurer specifies the amount it is allowed to charge for the procedure, and your insurer will then pay according to its rules. Thus, if the hospital's standard charge is $1200 but the negotiated rate is $800, the hospital will only receive $800, which may come from either you or your insurer depending on your deductible. Conversely, if an out-of-network doctor charges $1000 and the insurance rate is $700, the insurance will base its payment on the $700 (applying $700 to your deductible, or paying the out-of-network portion of the bill if you have met the deductible), and the doctor can balance-bill you for the other $300.
In my case, the hospital was in-network (we verified beforehand), but 1 out of 5 doctors were out-of-network. Apparently on page 11 of 12 of the admissions document in fine print there is wording which allows this...

And I have no doubts that the doctor could charge $1800.

Mudpuppy
Posts: 5889
Joined: Sat Aug 27, 2011 2:26 am
Location: Sunny California

Re: Are hospitals allowed to do this?

Post by Mudpuppy » Wed Aug 13, 2014 1:37 am

This might seem a little out there, but have you tried calling your insurance company to see how the providers billed the insurance company? When I got a $500 lab bill for blood work associated with a physical, I called the insurance first to see if it had been billed as a routine physical (most should be free as part of preventative care) or as a medical diagnostics (copay and deductible kick in). Sure enough, it has been billed as a medical diagnostics test instead of a routine physical. Knowing that before I called the doctor's office got me through most of the negotiations.

User avatar
kwan2
Posts: 384
Joined: Thu Jun 14, 2012 9:13 pm

Re: Are hospitals allowed to do this?

Post by kwan2 » Wed Aug 13, 2014 2:16 am

http://www.medicare.gov/claims-and-appe ... ryone.html

some of these may appy, even to the non-MC patient, see : JCHO accredidation, etc
“The history of Paris teaches us that beauty is a by-product of danger, that liberty is at best a consequence of neglect, that wisdom is entwined with decay."

bnes
Posts: 391
Joined: Thu May 22, 2014 12:29 am
Contact:

Re: Are hospitals allowed to do this?

Post by bnes » Wed Aug 13, 2014 2:37 am

toto238 wrote:So I had a routine procedure done at a hospital and was quoted a total price of ~$1,200 for everything before having the procedure done. It was a soft quote, and they stated it could vary.
Was the soft quote written?

In my experience the hospital will take 20-30% off if you complain, just to make you shut up.

User avatar
fizxman
Posts: 181
Joined: Mon Oct 24, 2011 9:44 am
Location: Harrisburg, PA

Re: Are hospitals allowed to do this?

Post by fizxman » Wed Aug 13, 2014 7:51 am

When my fiance had an emergency laparoscopic appendectomy about two years ago, she called the hospital about payment options and they guy on the phone told her "this is too much, lets knock 25% off" without her even asking. He may not have said it exactly that way and I don't remember the exact % but I think it was either 20% or 25%. The point is just by calling she was able to reduce the bill; she didn't have to resort to complaining. I don't know if I was more shocked by this or that they gave her morphine before running any type of test or scans.

Jack FFR1846
Posts: 7794
Joined: Tue Dec 31, 2013 7:05 am

Re: Are hospitals allowed to do this?

Post by Jack FFR1846 » Wed Aug 13, 2014 8:08 am

Not surprised

I had chest pain in january and on my cardiologist's advice, went to the er. I subsequently was admitted and had a heart procedure. Later, I received a bill from the er doc because he was not contracted with my insurance. Insurance paid him the customary fee. The hospital is contracted, by the way. I appealed and was denied. I took it to a second level appeal, asking if next time I am in the er for a life threatening emergency, I should stop every caregiver and make sure they are contracted? Although the insurance contract could have denied my appeal, they paid the remainder.

Sometimes common sense does work. Ymmv
Bogle: Smart Beta is stupid

CAP_theorem
Posts: 55
Joined: Tue Aug 12, 2014 10:19 am

Re: Are hospitals allowed to do this?

Post by CAP_theorem » Wed Aug 13, 2014 8:33 am

Sorry to go off topic from the OP, but there is something instructive to be had out of the experience.

Once you know the dirty tricks is there a way to avoid being treated by out of network facilities and doctors?

Let's say you are doing an elective procedure like a tubal ligation. You could go anywhere, talk to anyone, and sign anything. Would it make sense to try modifying the documents they have you sign to require that all out of network caregivers, vendors, and facilities accept the in-network rate from your insurer, or that you be notified in advance of anything out of network? Is tubal ligation special in any way since the ACA requires that it be covered at no cost?

toofache32
Posts: 1324
Joined: Sun Mar 04, 2012 6:30 pm

Re: Are hospitals allowed to do this?

Post by toofache32 » Wed Aug 13, 2014 11:48 am

CAP_theorem wrote:Sorry to go off topic from the OP, but there is something instructive to be had out of the experience.

Once you know the dirty tricks is there a way to avoid being treated by out of network facilities and doctors?

Let's say you are doing an elective procedure like a tubal ligation. You could go anywhere, talk to anyone, and sign anything. Would it make sense to try modifying the documents they have you sign to require that all out of network caregivers, vendors, and facilities accept the in-network rate from your insurer, or that you be notified in advance of anything out of network? Is tubal ligation special in any way since the ACA requires that it be covered at no cost?
Sure you could try to modify the documents, but good luck on getting the caregivers, vendors, and facilities to sign it as well.

derosa
Posts: 464
Joined: Wed Jul 24, 2013 5:18 pm

Re: Are hospitals allowed to do this?

Post by derosa » Wed Aug 13, 2014 11:58 am

A soft quote is worth the paper it was written on. All they were telling you is that you charges probably won't be in the $10k range.

You asked the hospital. They told you what their part of the procedure would be.

In all fairness to the hospital outpatient staff they have no idea what the doc or labs or anesthesiologist or anyone else can or will bill.

Consider this an interesting experience and lesson.

toofache32
Posts: 1324
Joined: Sun Mar 04, 2012 6:30 pm

Re: Are hospitals allowed to do this?

Post by toofache32 » Wed Aug 13, 2014 12:08 pm

derosa wrote:A soft quote is worth the paper it was written on....
Interestingly, the same is true for insurance pre-authorizations for treatment, which I no longer bother doing for my patients. The general public would be astounded at how often a treatment is "pre-authorized" but then they change their minds after the procedure and deny the claim. They get away with this because all pre-authorizations have fine print at the bottom that "pre-authorization is not a guarantee of payment."

GeauxBR
Posts: 113
Joined: Mon Sep 12, 2011 10:53 pm
Location: Baton Rouge

Re: Are hospitals allowed to do this?

Post by GeauxBR » Wed Aug 13, 2014 12:17 pm

When my son had his tubes put in his ears last year the surgery center gave us a quote of $700 for our portion of the bill. Come to find out after the fact that that was just the facility cost. Still had to pay the doctor/lab/anesthesia.

Bummer

toto238
Posts: 1880
Joined: Wed Feb 05, 2014 2:39 am

Re: Are hospitals allowed to do this?

Post by toto238 » Wed Aug 13, 2014 12:22 pm

Let me break down the charges, so it makes a little more sense.

The HOSPITAL bill is $2,379

The Physician's bill is roughly $250

The Laboratory's bill is roughly another $100

The quoted price that the HOSPITAL gave me was $1,220. Regardless of whether it was for everything or just the hospital, it still basically doubled.

The hospital was in-network, and the $2379 is the charge that they negotiated with my insurance company. So they gave me a lower quote and then increased the charge to the maximum the insurance company would allow.

toofache32
Posts: 1324
Joined: Sun Mar 04, 2012 6:30 pm

Re: Are hospitals allowed to do this?

Post by toofache32 » Wed Aug 13, 2014 12:48 pm

toto238 wrote:Let me break down the charges, so it makes a little more sense.

The HOSPITAL bill is $2,379

The Physician's bill is roughly $250

The Laboratory's bill is roughly another $100

The quoted price that the HOSPITAL gave me was $1,220. Regardless of whether it was for everything or just the hospital, it still basically doubled.

The hospital was in-network, and the $2379 is the charge that they negotiated with my insurance company. So they gave me a lower quote and then increased the charge to the maximum the insurance company would allow.
This makes a little more sense now that you are in-network, although I could be wrong. If you are covered by insurance and they are in-network with your insurance, they are bound by their contract with the insurance company which usually requires the facility to charge the same fee to everyone in the network. If they charge lower fees, then now that hospital's UCR is only $1220 and the insurance will lower ALL other patient's allowable amount from $2379 to $1220. My guess is that the initial quote was given for someone paying cash and without insurance. Note that fewer and fewer hospitals will make a "cash" arrangement for someone who has insurance but simply does not want to use it. This is because patients often turn around and file their own claim after the procedure to see if they can get reimbursed a portion of the cost. Now the hospital is back in the UCR scenario I just described.

User avatar
dodecahedron
Posts: 3691
Joined: Tue Nov 12, 2013 12:28 pm

Re: Are hospitals allowed to do this?

Post by dodecahedron » Wed Aug 13, 2014 12:56 pm

Jack FFR1846 wrote:Not surprised

I had chest pain in january and on my cardiologist's advice, went to the er. I subsequently was admitted and had a heart procedure. Later, I received a bill from the er doc because he was not contracted with my insurance. Insurance paid him the customary fee. The hospital is contracted, by the way. I appealed and was denied. I took it to a second level appeal, asking if next time I am in the er for a life threatening emergency, I should stop every caregiver and make sure they are contracted? Although the insurance contract could have denied my appeal, they paid the remainder.

Sometimes common sense does work. Ymmv
Unbelievable! I can't understand how a hospital can promote itself as being in-network if it contracts with an out-of-network ER practice. (I always--naively--assumed that ER docs were hospital employees.)

I would love to hear EmergDoc weigh in on why hospitals contract with outside ER practices rather than hiring ER docs as employees or *at least* choosing to contract with ER practices that are in the same HMO networks the hospital participates in.

MildlyEccentric
Posts: 69
Joined: Mon Mar 10, 2014 9:28 am

Re: Are hospitals allowed to do this?

Post by MildlyEccentric » Wed Aug 13, 2014 1:17 pm

I and family members have fought the "out-of-network" battle with hospitals. So far, the hospitals have been willing (after some argument) to take charges for out-of-network services off the bill. One family member resorted to inquiring of every doctor entering their room if they were in-network before permitting treatment. Doing this is impractical, unreasonable, and an indictment of the state of the fragmented US health care payment system.

Atgard
Posts: 386
Joined: Wed Apr 09, 2014 2:02 pm

Re: Are hospitals allowed to do this?

Post by Atgard » Wed Aug 13, 2014 1:36 pm

Health care is the only industry that not only doesn't list prices, but even if you ask ahead of time how much something will cost, they either won't tell you, or will give you a completely wrong number, but expect you to pay whatever they come up with later.

It's like going to a store and buying a bunch of merchandise or food without price tags, then they send you a bill 3 months later for a random price they just make up.

It is very very hard to be Bogleheadish when it comes to health care, since they won't give you prices and it's so hard to find reviews on doctors… whereas I can easily find hundreds of reviews for any $0.99 e-book, restaurant, or product online.

toto238
Posts: 1880
Joined: Wed Feb 05, 2014 2:39 am

Re: Are hospitals allowed to do this?

Post by toto238 » Wed Aug 13, 2014 1:38 pm

Atgard wrote:Health care is the only industry that not only doesn't list prices, but even if you ask ahead of time how much something will cost, they either won't tell you, or will give you a completely wrong number, but expect you to pay whatever they come up with later.

It's like going to a store and buying a bunch of merchandise or food without price tags, then they send you a bill 3 months later for a random price they just make up.

It is very very hard to be Bogleheadish when it comes to health care, since they won't give you prices and it's so hard to find reviews on doctors… whereas I can easily find hundreds of reviews for any $0.99 e-book, restaurant, or product online.
THIS. +1 million internet points

Bracket
Posts: 417
Joined: Sun Mar 10, 2013 7:50 pm

Re: Are hospitals allowed to do this?

Post by Bracket » Wed Aug 13, 2014 3:39 pm

Atgard wrote:Health care is the only industry that not only doesn't list prices, but even if you ask ahead of time how much something will cost, they either won't tell you, or will give you a completely wrong number, but expect you to pay whatever they come up with later.

It's like going to a store and buying a bunch of merchandise or food without price tags, then they send you a bill 3 months later for a random price they just make up.

It is very very hard to be Bogleheadish when it comes to health care, since they won't give you prices and it's so hard to find reviews on doctors… whereas I can easily find hundreds of reviews for any $0.99 e-book, restaurant, or product online.
I agree. And I say we should enact some healthcare reform law that addresses this lack of transparency in billing practices and....oh wait, I guess it's too late.

As a physician I've actually been disappointed in my own hospital's attempts to swindle me. I needed regular and frequent blood tests for awhile and my insurance said "go anywhere you want it is covered since the ordering physician is in network." So since I am at the hospital everyday that's where I went. Hospital said the same thing--in network, fully covered. But months later I get all these little $12 dollar uncovered charges for each blood test. A "pathologist's fee." I know for a fact the pathologist did not draw the blood, perform the test, nor ever look at the result. His name was written above the lab door though I suppose. My actual doctor did in fact take the time to look at the results, and each time called me herself to let me know the result and the necessary medication adjustments. For which she billed nothing.

After inquiring it turns out that it was simply because I went to a hospital and not a freestanding lab. (Part of the reason hospitals like to buy up practices and do everything in house--charge more for the same service I guess) My insurance simply wouldn't pay a pathologist fee for a routine blood test that somebody else interpreted, and I don't blame them since it's completely ridiculous.

I considered fighting, even bringing it up with the pathologist during lunch, but since it was still a small sum I just paid it, and started going to a free-standing satellite lab 10 min from the hospital that is ironically owned and operated by my hospital's biggest local competitor. For these blood draws my out of pocket costs were zero. And now when people ask me where they should go for outpatient labs I direct them towards the exit.

User avatar
dodecahedron
Posts: 3691
Joined: Tue Nov 12, 2013 12:28 pm

Re: Are hospitals allowed to do this?

Post by dodecahedron » Wed Aug 13, 2014 3:45 pm

Atgard wrote:Health care is the only industry that not only doesn't list prices, but even if you ask ahead of time how much something will cost, they either won't tell you, or will give you a completely wrong number, but expect you to pay whatever they come up with later.

It's like going to a store and buying a bunch of merchandise or food without price tags, then they send you a bill 3 months later for a random price they just make up.

It is very very hard to be Bogleheadish when it comes to health care, since they won't give you prices and it's so hard to find reviews on doctors… whereas I can easily find hundreds of reviews for any $0.99 e-book, restaurant, or product online.
Indeed, and frequently the greatest need for expensive health care services arise at a time when the patient and/or his family are under a lot of stress and vulnerable, so hardly in the best frame of mind for comparison-shopping. It would be nice to have assurances ahead of time.

denovo
Posts: 4351
Joined: Sun Oct 13, 2013 1:04 pm

Re: Are hospitals allowed to do this?

Post by denovo » Wed Aug 13, 2014 4:41 pm

look at other threads on the website about hospital bills and so forth people have had success with calling and bothering them and offer to pay cash for a discount I suggest that you go that route
"Don't trust everything you read on the Internet"- Abraham Lincoln

denovo
Posts: 4351
Joined: Sun Oct 13, 2013 1:04 pm

Re: Are hospitals allowed to do this?

Post by denovo » Wed Aug 13, 2014 4:44 pm

By the way experiences like this that I've heard about is why I don't like those high deductible insurance plans that were being pushed at one time. A lot of so-called routine work can end up becoming very costly.
"Don't trust everything you read on the Internet"- Abraham Lincoln

toto238
Posts: 1880
Joined: Wed Feb 05, 2014 2:39 am

Re: Are hospitals allowed to do this? [Costs quoted vs. actu

Post by toto238 » Wed Aug 13, 2014 5:01 pm

denovo wrote:By the way experiences like this that I've heard about is why I don't like those high deductible insurance plans that were being pushed at one time. A lot of so-called routine work can end up becoming very costly.
From an individual perspective, not having a HDHP seems great because you don't get stuck with those large bills yourself. But there is no free lunch. With another plan, you're paying a much higher premium (or your employer is) so you can basically enjoy a low or $0 deductible. The hospital bill is still the same cost (ridiculously overpriced), it's just someone else paying it. Arguably, everyone having those low-deductible plans could be contributing significantly to the rise in healthcare costs.

sambb
Posts: 2144
Joined: Sun Mar 10, 2013 3:31 pm

Re: Are hospitals allowed to do this? [Costs quoted vs. actu

Post by sambb » Wed Aug 13, 2014 5:37 pm

the mean profit margin, i thought, for US hospitals is only 7%. Sure there are some that make far more, but overall the margin is low. What seems overpriced to us ,as consumers, may not be that overpriced to hospitals. It doesn't explain why you were quoted one charge and charged another, however. Nevertheless, when people write here that the bills are overpriced, I just don't know what goes into running a hospital for which they have to charge a lot to paying patients. I suspect if all the bills were cut by 7%, we would still think they are overpriced. The advice to call and explain to the hospital is, in my opinion, a wise one. Not clear to me how or why they do cut the price when complaints are issues, however, i suspect that if everyone called to complain then no one's bill would be cut. It is an interesting economic anomaly that defies logic.

denovo
Posts: 4351
Joined: Sun Oct 13, 2013 1:04 pm

Re: Are hospitals allowed to do this? [Costs quoted vs. actu

Post by denovo » Wed Aug 13, 2014 5:47 pm

Sam you are assuming that all excess cost goes into the profit margin. That is not true.
"Don't trust everything you read on the Internet"- Abraham Lincoln

toto238
Posts: 1880
Joined: Wed Feb 05, 2014 2:39 am

Re: Are hospitals allowed to do this? [Costs quoted vs. actu

Post by toto238 » Wed Aug 13, 2014 5:53 pm

sambb wrote:the mean profit margin, i thought, for US hospitals is only 7%. Sure there are some that make far more, but overall the margin is low. What seems overpriced to us ,as consumers, may not be that overpriced to hospitals. It doesn't explain why you were quoted one charge and charged another, however. Nevertheless, when people write here that the bills are overpriced, I just don't know what goes into running a hospital for which they have to charge a lot to paying patients. I suspect if all the bills were cut by 7%, we would still think they are overpriced. The advice to call and explain to the hospital is, in my opinion, a wise one. Not clear to me how or why they do cut the price when complaints are issues, however, i suspect that if everyone called to complain then no one's bill would be cut. It is an interesting economic anomaly that defies logic.
Is that a gross profit margin or a net profit margin? What is it accounting for?

There's no denying that virtually every single medical procedure costs more in the US than in other developed countries. That extra money is going somewhere. If it's not going to the hospital's profit margin, then it could be going to other expenses. For instance, maybe doctors are paid significantly more, or the US has significantly more administrators and management in their hospitals, and their bonuses need paying. Maybe it has to do with medical malpractice insurance, or with how much money is actually going to treatment, and how much is going to Research. The money is going somewhere. The exact same procedure CAN be done in other developed countries (even ones with higher GDP per capita than the US so overall labor costs don't account for it) for much cheaper.

There are no simple answers, I imagine, but I salute any attempts to make this system better. Because a market operating under these conditions cannot be sustainable. Imagine going to a car dealership and the guy says "This car will probably cost $25k", refuses to tell you the real price until you agree to buy it, then three weeks later says "yeah it was 50k". This is not normal functioning of a market. How are people able to make informed decisions under these conditions?

User avatar
rpike
Posts: 476
Joined: Mon Mar 19, 2007 10:14 pm
Contact:

Re: Are hospitals allowed to do this?

Post by rpike » Wed Aug 13, 2014 6:18 pm

MildlyEccentric wrote:I and family members have fought the "out-of-network" battle with hospitals. So far, the hospitals have been willing (after some argument) to take charges for out-of-network services off the bill. One family member resorted to inquiring of every doctor entering their room if they were in-network before permitting treatment. Doing this is impractical, unreasonable, and an indictment of the state of the fragmented US health care payment system.
Maybe we can just adopt the approach used in shrink wrap software; put a note on your chart like a DNR, but is instead a DNBOON (do not bill out-of-network). The note would specify that anyone who provides services to you in this in-network facility hereby agrees to accept the terms of an in-network provider and that providing such treatment is considered prima facia evidence of acceptance.

The way hospitals work now, it is like bringing your car to a garage for service and they quote you a price, but you find out afterwards that they only included the costs for the facilities usage and anyone the garage appointed to work on your car can bill you whatever they want without having ever negotiated any agreement with you.

Another Rick

User avatar
grabiner
Advisory Board
Posts: 22688
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: Are hospitals allowed to do this?

Post by grabiner » Wed Aug 13, 2014 7:22 pm

denovo wrote:By the way experiences like this that I've heard about is why I don't like those high deductible insurance plans that were being pushed at one time. A lot of so-called routine work can end up becoming very costly.
The high-deductible plan isn't the main issue here. If you go out-of-network, you can get a big bill even with a low-deductible plan, because the plan doesn't cover the full fee. If you are in-network, you, rather than the insurer, will pay the negotiated price for routine work, but you may have saved enough to make up for this. I have been using a high-deductible plan for years, and I accept that I will pay $200 for my occasional visits to specialists and $500 if I need an MRI, but the tax savings on the HSA are worth it.
Wiki David Grabiner

toofache32
Posts: 1324
Joined: Sun Mar 04, 2012 6:30 pm

Re: Are hospitals allowed to do this? [Costs quoted vs. actu

Post by toofache32 » Wed Aug 13, 2014 8:18 pm

sambb wrote:the mean profit margin, i thought, for US hospitals is only 7%. Sure there are some that make far more, but overall the margin is low. What seems overpriced to us ,as consumers, may not be that overpriced to hospitals. It doesn't explain why you were quoted one charge and charged another, however. Nevertheless, when people write here that the bills are overpriced, I just don't know what goes into running a hospital for which they have to charge a lot to paying patients. I suspect if all the bills were cut by 7%, we would still think they are overpriced. The advice to call and explain to the hospital is, in my opinion, a wise one. Not clear to me how or why they do cut the price when complaints are issues, however, i suspect that if everyone called to complain then no one's bill would be cut. It is an interesting economic anomaly that defies logic.
This. I have worked as a doctor in high-priced settings and extremely low-price settings. People b!tch regardless so I no longer entertain discounts or attempt to work with patients. The price is what it is. What's my incentive to lower the price?

toofache32
Posts: 1324
Joined: Sun Mar 04, 2012 6:30 pm

Re: Are hospitals allowed to do this? [Costs quoted vs. actu

Post by toofache32 » Wed Aug 13, 2014 8:34 pm

I will also say that comparisons to other industries, like buying a car, are not relevant one bit. We are not selling widgets in hospitals. Rarely do things go as planned since healing and biology is difficult to predict. I admitted a guy to the hospital last week for a procedure which is not covered by his (or anyone's) insurance so he paid my cash price. He has liver cirrhosis and is trying to get on the liver transplant list. Because of his bad liver, he had post-op bleeding problems requiring him to go back to the operating room, despite doing all the right things and preparing him before surgery with methods to make him not bleed as much. Although I certainly do not charge him any extra for my additional time and services, he will certainly incur additional bills for another trip to the OR and extra days in the hospital.

I know much of this is just banter but those that insist this is like buying a car are really saying that they have a crystal ball where they can predict the amount of hospital resources used. Hospital admins will pay you big money to hire you if that's the case. In reality, the car has not been built yet and will not be completely built until the patient leaves the hospital.

User avatar
arthurdawg
Posts: 902
Joined: Mon Jun 02, 2008 7:47 am

Re: Are hospitals allowed to do this?

Post by arthurdawg » Wed Aug 13, 2014 9:32 pm

Bracket wrote:
Atgard wrote:Health care is the only industry that not only doesn't list prices, but even if you ask ahead of time how much something will cost, they either won't tell you, or will give you a completely wrong number, but expect you to pay whatever they come up with later.

It's like going to a store and buying a bunch of merchandise or food without price tags, then they send you a bill 3 months later for a random price they just make up.

It is very very hard to be Bogleheadish when it comes to health care, since they won't give you prices and it's so hard to find reviews on doctors… whereas I can easily find hundreds of reviews for any $0.99 e-book, restaurant, or product online.
I agree. And I say we should enact some healthcare reform law that addresses this lack of transparency in billing practices and....oh wait, I guess it's too late.

As a physician I've actually been disappointed in my own hospital's attempts to swindle me. I needed regular and frequent blood tests for awhile and my insurance said "go anywhere you want it is covered since the ordering physician is in network." So since I am at the hospital everyday that's where I went. Hospital said the same thing--in network, fully covered. But months later I get all these little $12 dollar uncovered charges for each blood test. A "pathologist's fee." I know for a fact the pathologist did not draw the blood, perform the test, nor ever look at the result. His name was written above the lab door though I suppose. My actual doctor did in fact take the time to look at the results, and each time called me herself to let me know the result and the necessary medication adjustments. For which she billed nothing.

After inquiring it turns out that it was simply because I went to a hospital and not a freestanding lab. (Part of the reason hospitals like to buy up practices and do everything in house--charge more for the same service I guess) My insurance simply wouldn't pay a pathologist fee for a routine blood test that somebody else interpreted, and I don't blame them since it's completely ridiculous.

I considered fighting, even bringing it up with the pathologist during lunch, but since it was still a small sum I just paid it, and started going to a free-standing satellite lab 10 min from the hospital that is ironically owned and operated by my hospital's biggest local competitor. For these blood draws my out of pocket costs were zero. And now when people ask me where they should go for outpatient labs I direct them towards the exit.
Same here... I am a physician and spend lots of times studying, overseeing, working with, cursing, and preparing voodoo rituals over billing.

It's a big hot mess.

And I can't figure it out half the time.
TSM / SCV / FTSE Big World / FTSE Small World / REIT / TBM / Int Term Tax Exempt

toofache32
Posts: 1324
Joined: Sun Mar 04, 2012 6:30 pm

Re: Are hospitals allowed to do this?

Post by toofache32 » Wed Aug 13, 2014 10:08 pm

arthurdawg wrote:
Bracket wrote:
Atgard wrote:Health care is the only industry that not only doesn't list prices, but even if you ask ahead of time how much something will cost, they either won't tell you, or will give you a completely wrong number, but expect you to pay whatever they come up with later.

It's like going to a store and buying a bunch of merchandise or food without price tags, then they send you a bill 3 months later for a random price they just make up.

It is very very hard to be Bogleheadish when it comes to health care, since they won't give you prices and it's so hard to find reviews on doctors… whereas I can easily find hundreds of reviews for any $0.99 e-book, restaurant, or product online.
I agree. And I say we should enact some healthcare reform law that addresses this lack of transparency in billing practices and....oh wait, I guess it's too late.

As a physician I've actually been disappointed in my own hospital's attempts to swindle me. I needed regular and frequent blood tests for awhile and my insurance said "go anywhere you want it is covered since the ordering physician is in network." So since I am at the hospital everyday that's where I went. Hospital said the same thing--in network, fully covered. But months later I get all these little $12 dollar uncovered charges for each blood test. A "pathologist's fee." I know for a fact the pathologist did not draw the blood, perform the test, nor ever look at the result. His name was written above the lab door though I suppose. My actual doctor did in fact take the time to look at the results, and each time called me herself to let me know the result and the necessary medication adjustments. For which she billed nothing.

After inquiring it turns out that it was simply because I went to a hospital and not a freestanding lab. (Part of the reason hospitals like to buy up practices and do everything in house--charge more for the same service I guess) My insurance simply wouldn't pay a pathologist fee for a routine blood test that somebody else interpreted, and I don't blame them since it's completely ridiculous.

I considered fighting, even bringing it up with the pathologist during lunch, but since it was still a small sum I just paid it, and started going to a free-standing satellite lab 10 min from the hospital that is ironically owned and operated by my hospital's biggest local competitor. For these blood draws my out of pocket costs were zero. And now when people ask me where they should go for outpatient labs I direct them towards the exit.
Same here... I am a physician and spend lots of times studying, overseeing, working with, cursing, and preparing voodoo rituals over billing.

It's a big hot mess.

And I can't figure it out half the time.
Agreed. I have paid good money to even go to 3 day coding courses and I still get screwed.

User avatar
kwan2
Posts: 384
Joined: Thu Jun 14, 2012 9:13 pm

Re: Are hospitals allowed to do this? [Costs quoted vs. actu

Post by kwan2 » Wed Aug 13, 2014 11:36 pm

It is sad, that such a morass, is likely forever, in my lifetime anyway, I work in healthcare, and spend 1/2-3/4 of my time doing adminstrative activities, cause they downsize our office workers, and increase the software exercise ....
“The history of Paris teaches us that beauty is a by-product of danger, that liberty is at best a consequence of neglect, that wisdom is entwined with decay."

SimonJester
Posts: 1630
Joined: Tue Aug 16, 2011 12:39 pm

Re: Are hospitals allowed to do this? [Costs quoted vs. actu

Post by SimonJester » Thu Aug 14, 2014 8:49 am

toofache32 wrote: This. I have worked as a doctor in high-priced settings and extremely low-price settings. People b!tch regardless so I no longer entertain discounts or attempt to work with patients. The price is what it is. What's my incentive to lower the price?

This is because people are not told the price ahead of time. You are surprised after the fact when you cant make any decision about the procedure. I detest this practice in the medical industry. Do you walk into McDonalds and order off the menu not knowing the prices for food? No...

Today I found out my dental insurance doesnt cover any charges related to patient education and instruction, so now I have a $60 charge for my son's rescent dental cleaning. No one asked me if I wanted this non covered service. $60 for 5 minutes of how to brush your teeth, good grief! Guess I will go find yet another dentists....
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin

SimonJester
Posts: 1630
Joined: Tue Aug 16, 2011 12:39 pm

Re: Are hospitals allowed to do this? [Costs quoted vs. actu

Post by SimonJester » Thu Aug 14, 2014 8:55 am

toofache32 wrote:I will also say that comparisons to other industries, like buying a car, are not relevant one bit. We are not selling widgets in hospitals. Rarely do things go as planned since healing and biology is difficult to predict. I admitted a guy to the hospital last week for a procedure which is not covered by his (or anyone's) insurance so he paid my cash price. He has liver cirrhosis and is trying to get on the liver transplant list. Because of his bad liver, he had post-op bleeding problems requiring him to go back to the operating room, despite doing all the right things and preparing him before surgery with methods to make him not bleed as much. Although I certainly do not charge him any extra for my additional time and services, he will certainly incur additional bills for another trip to the OR and extra days in the hospital.

I know much of this is just banter but those that insist this is like buying a car are really saying that they have a crystal ball where they can predict the amount of hospital resources used. Hospital admins will pay you big money to hire you if that's the case. In reality, the car has not been built yet and will not be completely built until the patient leaves the hospital.
I think the biggest gripe is when this sort of thing happens, the DR doesnt really know if the procedure is covered and or what the insurance negotiated rate is. How could they know all of this, they would spend 95% of their day dealing with insurance matters.

The entire medical insurance industry is a mess.
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin

toofache32
Posts: 1324
Joined: Sun Mar 04, 2012 6:30 pm

Re: Are hospitals allowed to do this? [Costs quoted vs. actu

Post by toofache32 » Thu Aug 14, 2014 9:12 am

SimonJester wrote:
toofache32 wrote: This. I have worked as a doctor in high-priced settings and extremely low-price settings. People b!tch regardless so I no longer entertain discounts or attempt to work with patients. The price is what it is. What's my incentive to lower the price?

This is because people are not told the price ahead of time. You are surprised after the fact when you cant make any decision about the procedure. I detest this practice in the medical industry. Do you walk into McDonalds and order off the menu not knowing the prices for food? No...

Today I found out my dental insurance doesnt cover any charges related to patient education and instruction, so now I have a $60 charge for my son's rescent dental cleaning. No one asked me if I wanted this non covered service. $60 for 5 minutes of how to brush your teeth, good grief! Guess I will go find yet another dentists....
I understand the frustration which is why I present a detailed treatment plan prior to any treatment which outlines our fees and also how much insurance is expected to cover based on the info given to us by the insurance company (which is often incorrect). The patient signs the treatment plan that says they understand that this is only an estimate of what insurance will cover since insurance companies frequently change their minds later. But I never add on other fees later even if I end up needing to do something extra. We recently started requiring payment of 50% of the patient's portion of the fees to schedule the procedure, and the remaining 50% is due on the day of the procedure. Patients who show up on the day of the procedure who "forgot their wallet" are re-scheduled. We were reluctant to do this at first but it turns out the only patients we piss off are the ones who never intended to pay to begin with.

Random Poster
Posts: 1674
Joined: Wed Feb 03, 2010 10:17 am

Re: Are hospitals allowed to do this? [Costs quoted vs. actu

Post by Random Poster » Thu Aug 14, 2014 9:21 am

toofache32 wrote:I will also say that comparisons to other industries, like buying a car, are not relevant one bit. We are not selling widgets in hospitals. Rarely do things go as planned since healing and biology is difficult to predict.
Perhaps, but I note that several law firms/attorneys are going to a flat-rate, all-in, fixed fee model, even though, say, title work or litigation matters rarely go as planned and human psychology and the unknown is difficult to predict.

Obviously, this method of billing is working for those attorneys who adopt it and continue to use it.

So why can't doctors implement the model?

TDAlmighty
Posts: 170
Joined: Fri Dec 06, 2013 1:01 pm

Re: Are hospitals allowed to do this? [Costs quoted vs. actu

Post by TDAlmighty » Thu Aug 14, 2014 9:26 am

toofache32 wrote: I understand the frustration which is why I present a detailed treatment plan prior to any treatment which outlines our fees and also how much insurance is expected to cover based on the info given to us by the insurance company (which is often incorrect). The patient signs the treatment plan that says they understand that this is only an estimate of what insurance will cover since insurance companies frequently change their minds later. But I never add on other fees later even if I end up needing to do something extra. We recently started requiring payment of 50% of the patient's portion of the fees to schedule the procedure, and the remaining 50% is due on the day of the procedure. Patients who show up on the day of the procedure who "forgot their wallet" are re-scheduled. We were reluctant to do this at first but it turns out the only patients we piss off are the ones who never intended to pay to begin with.
I wish more doctors/hospitals did this, but I have only seen it twice and both times were for very predictable treatments (elective cosmetic treatment and prenatal care). I have never seen it for situations that required a combination of diagnosis/testing/treatment where the "unknowns" are much higher. But hopefully that will change.

Edit: With that said, I always ask how much something will cost after it is recommended. Some doctors act really annoyed when you ask this question and some are understanding. A couple of doctors have told me that "you would be surprised how few people ask."

In addition, if the recommendation is for additional testing, I always ask what the purpose of the test and what will be done based on the possible outcomes of the test. If the answer is "nothing" will be done regardless of test outcome -- which is often the case -- then I save my time and money. Several times I have had doctors try to order tests that had no purpose other than running up the bill.
Last edited by TDAlmighty on Thu Aug 14, 2014 9:34 am, edited 1 time in total.

toofache32
Posts: 1324
Joined: Sun Mar 04, 2012 6:30 pm

Re: Are hospitals allowed to do this? [Costs quoted vs. actu

Post by toofache32 » Thu Aug 14, 2014 9:27 am

SimonJester wrote:
toofache32 wrote:I will also say that comparisons to other industries, like buying a car, are not relevant one bit. We are not selling widgets in hospitals. Rarely do things go as planned since healing and biology is difficult to predict. I admitted a guy to the hospital last week for a procedure which is not covered by his (or anyone's) insurance so he paid my cash price. He has liver cirrhosis and is trying to get on the liver transplant list. Because of his bad liver, he had post-op bleeding problems requiring him to go back to the operating room, despite doing all the right things and preparing him before surgery with methods to make him not bleed as much. Although I certainly do not charge him any extra for my additional time and services, he will certainly incur additional bills for another trip to the OR and extra days in the hospital.

I know much of this is just banter but those that insist this is like buying a car are really saying that they have a crystal ball where they can predict the amount of hospital resources used. Hospital admins will pay you big money to hire you if that's the case. In reality, the car has not been built yet and will not be completely built until the patient leaves the hospital.
I think the biggest gripe is when this sort of thing happens, the DR doesnt really know if the procedure is covered and or what the insurance negotiated rate is. How could they know all of this, they would spend 95% of their day dealing with insurance matters.

The entire medical insurance industry is a mess.
I get frustrated by this from the doctor' standpoint also. Medical insurance companies generally will NOT tell the doctor's what the "insurance negotiated rate" is. Now that I think about it, I have no idea how my office staff figures out how much the patient has to pay prior to surgery. The deductible is easy to find out, but one of my common surgeries adds up to about $30,000 going by my "cash" office fee schedule and insurance pays me between $3000-7000 depending on the insurance. And the patient usually has to pay maybe $1500 up front as their portion. I have no idea how my office comes up with that $1500 figure.

Just in case there is confusion with my previous post about the dental insurance where I contradicted what I said in this post, I participate in both dental and medical insurance plans which are entirely different animals.

toofache32
Posts: 1324
Joined: Sun Mar 04, 2012 6:30 pm

Re: Are hospitals allowed to do this? [Costs quoted vs. actu

Post by toofache32 » Thu Aug 14, 2014 9:35 am

Random Poster wrote:
toofache32 wrote:I will also say that comparisons to other industries, like buying a car, are not relevant one bit. We are not selling widgets in hospitals. Rarely do things go as planned since healing and biology is difficult to predict.
Perhaps, but I note that several law firms/attorneys are going to a flat-rate, all-in, fixed fee model, even though, say, title work or litigation matters rarely go as planned and human psychology and the unknown is difficult to predict.

Obviously, this method of billing is working for those attorneys who adopt it and continue to use it.

So why can't doctors implement the model?
It's a good idea but I suspect it would only make things more expensive. One of my colleagues has this model when he places dental implants in his office. He has an all-inclusive fee that everyone pays for him to place an implant. Some of these implants are straightforward but other require bone grafting (expensive to purchase) and other "custom" made parts (more expensive) instead of the "stock" components. Some require gum grafting and other stuff. So his implant fee has to be pretty high to function this way because he has to make sure that all his costs are covered on the majority of cases. On simple cases he makes out like a bandit, but on more complicated cases he barely breaks even and may not even profit. Then there is the law of unintended consequences....is he now incentivized to treat only "simpler" cases to maximize his profit margin?

TDAlmighty
Posts: 170
Joined: Fri Dec 06, 2013 1:01 pm

Re: Are hospitals allowed to do this? [Costs quoted vs. actu

Post by TDAlmighty » Thu Aug 14, 2014 9:45 am

toofache32 wrote:I get frustrated by this from the doctor' standpoint also. Medical insurance companies generally will NOT tell the doctor's what the "insurance negotiated rate" is. Now that I think about it, I have no idea how my office staff figures out how much the patient has to pay prior to surgery. The deductible is easy to find out, but one of my common surgeries adds up to about $30,000 going by my "cash" office fee schedule and insurance pays me between $3000-7000 depending on the insurance. And the patient usually has to pay maybe $1500 up front as their portion. I have no idea how my office comes up with that $1500.
Really? I have been shown the fee tables that that coders use that shows a reimbursement rate for every code based on the patient's insurance. It even shows what the patient co-pay is. The only unknown at that point is the deductible which can be figured out by entering in billing system or calling insurance company. If you or your coders have not mapped this out, then you are operating blind. How do you decide what insurance to accept vs. not accept without knowing the reimbursement rates?

toofache32
Posts: 1324
Joined: Sun Mar 04, 2012 6:30 pm

Re: Are hospitals allowed to do this? [Costs quoted vs. actu

Post by toofache32 » Thu Aug 14, 2014 9:57 am

TDAlmighty wrote:
Edit: With that said, I always ask how much something will cost after it is recommended. Some doctors act really annoyed when you ask this question and some are understanding. A couple of doctors have told me that "you would be surprised how few people ask."

In addition, if the recommendation is for additional testing, I always ask what the purpose of the test and what will be done based on the possible outcomes of the test. If the answer is "nothing" will be done regardless of test outcome -- which is often the case -- then I save my time and money. Several times I have had doctors try to order tests that had no purpose other than running up the bill.
This is a relatively new phenomenon now that patients have skin in the game with costs. But many patients who still have more all-inclusive plans where they pay virtually nothing for extra tests (Medicaid, some Medicare, few remaining private plans) still want every possible MRI, CT scan, PET scan, etc "just to make sure". They sometimes get annoyed when I tell them those tests won't add any useful information because, hey, it's free!

Patients over the years have complained that healthcare is so expensive. So costs have been shifted to patients so less will be spent on healthcare.... and now patients complain that they are actually having to pay for it.

User avatar
grabiner
Advisory Board
Posts: 22688
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: Are hospitals allowed to do this? [Costs quoted vs. actu

Post by grabiner » Thu Aug 14, 2014 9:59 am

TDAlmighty wrote:Really? I have been shown the fee tables that that coders use that shows a reimbursement rate for every code based on the patient's insurance. It even shows what the patient co-pay is. The only unknown at that point is the deductible which can be figured out by entering in billing system or calling insurance company.
Up-front billing based on the deductible has a problem because the insurance company's value for the deductible is well out of date. If you had $500 left on your deductible in July when you had a procedure which cost more than $500, but insurance doesn't process the bill until September, any doctor you see in August will still see that you have $500 left on your deductible.
Wiki David Grabiner

Locked