Sunday’s column: Why can’t hospital billing be simple to understand?
healthwise-everything.blogspot.com
Last year I brought you some eyebrow-raising stories about hospital bills.
There was a woman from Martinsville billed $1,200 for an emergency room visit where she got some Benadryl, and a guy from Roanoke whose bite from a stray cat ended up costing him (and his insurance company) more than $20,000 for rabies shots.
Reed Embrey’s story involves surgery, 28 hours in Carilion Roanoke Memorial Hospital, and a hospital bill of $38,116 that included multiple charges of $970 for forceps and $1,150 for surgical scissors. (The surgeon’s and anesthesiologist’s fees were separate).
If anything it highlights once again how difficult it can be to fathom hospital billing, even for patients with insurance.
Especially when patients are left feeling caught in the middle between what the hospital bills and his insurance company is willing to pay.
Embrey owns the Pine Tavern, a restaurant in Floyd. He had surgery in 2008 for prostate cancer, which his father had died from. It was caught early and he’s healthy today. He had health insurance, but it’s a catastrophic-style policy with a $5,000 deductible.
Embrey knew in advance he would have significant bills. So he did some research on his anticipated costs.
He says that twice before his surgery (and once afterward) he called a Carilion Clinic “price line” that gives patients advance estimates based on the actual costs billed for other similar-type surgeries.
The first call, “I was given a low of $16,000 and a high of $18,500. The second call resulted in charges of $17,000 to $23,000. I called a third time after surgery and saw my bill. I was given a low of $17,000 and a high of $42,000,” Embrey said.
He inquired about the $42,000 quote, and “the $42,000 operation had major complications. I had no complications.”
His insurance company, Mega Life and Health, paid the hospital about $9,000, which left Embrey’s portion of the bill at about $29,000.
“Something’s not right,” Embrey told me. “The insurance company says it’s not reasonable. The hospital says it is reasonable.”
And that’s when he contacted Medical Billing Advocates of America, a company in Salem that represents consumers in medical billing disputes.
An MBAA associate quickly zeroed in on one problem with the bill: Embrey’s insurance company was paying for outpatient surgery, even though he was admitted to the hospital and was there overnight.
So the insurance company coughed up another $7,000, roughly. Meanwhile, Carilion’s contract with Mega Life and Health called for about $5,700 in discounts. That took Embrey’s portion of the bill down to around $17,000.
He says he’s been paying $150 per month on that for 11 months, while repeatedly requesting an explanation of the remaining charges.
“They’ve never responded, other than to say, ‘we’re going to take you to court and sue you,’ ” Embrey told me.
Carilion did just that. On March 10, Embrey found himself in Roanoke General District Court, defending himself against a Carilion lawsuit for just under $15,000 – the legal limit in small claims cases.
Candice Butcher, the CEO of MBAA, says Medicare would have paid $7,500 for a prostatectomy, the kind of surgery Embrey had.
But Carilion Clinic spokesman Eric Earnhart said the hospital costs were far higher than that principally because Embrey had robotic surgery. That’s far more expensive than traditional surgery (because the robot cost a fortune) and the outcomes for patients frequently are better, too.
Butcher said some of the charges on his itemized bill, such as $6,500 Carilion billed for four robotic forceps and two robotic scissors, should have been included in the hospital’s operating room charge of $20,980 (that works out to $98.50 per minute for Embrey’s 3.5-hour surgery).
In an e-mail, Earnhart said the hospital bills separately for operating room supplies, and that forceps and scissors used by the surgical robot are highly specialized.
“These are not $5,000 toilet seats,” the hospital spokesman added. “These are complex and expensive instruments that can only be sterilized and reused a limited number of times.”
He also noted that the fee Medicare would pay is a poor yardstick by which to measure Embrey’s bill. Medicare payments frequently fall beneath a hospital’s cost for a procedure.
Earnhart said the only record he can find of any estimate furnished to Embrey showed a single range of $28,000 to $43,000, and that Embrey’s bill fell within that.
The range of average prices for a radical prostatectomy at hospitals in Salem, Lynchburg and Norfolk is $25,000 to $37,000, Earnhart added. That includes both robotic and less-expensive traditional surgery.
Finally, also built into Carilion’s charges for paying customers is the uncompensated care it performs. In the year Embrey had surgery, that amounted to $129 million, Earnhart said.
“There is a hidden tax,” as a result of all that uncompensated care, the hospital spokesman said.
As you can tell, there’s a lot of he-said, she-said going on here. It can get pretty head-spinning. I predict it’ll be worked out by May, which is when Embrey’s hearing was postponed until.
He’s hiring a lawyer. Butcher says MBAA is back on the case, too, examining all the operating room supplies that were billed separately from the $21,000 operating room fee.
But perhaps you can understand Embrey’s frustration. Because when you’re a customer at his establishment, you easily know in advance what you’re going to be on the hook for.
At the Pine Tavern, a Bass Ale on draft costs $4.50, and there’s no extra charge for the clean glass it comes in, or for the pour. They don’t add a stove fee for the $12 steaks, or for the fork used to flip it, or the salt and pepper used to season it.
You don’t have to hire a food critic to help you beat the price down to something that seems more reasonable. What you’re going to pay is listed right there on the menu.
Wouldn’t it be nice if your hospital operated that way?
March 20, 2011 - 10:18 AM
Incredibly annoying thing to read. Obamacare takes care of this, right?
None of this will change in America as long as the entire healthcare industry is set-up to make a profit just like the grocery store and used car lot down the street from your house are. This ain’t rocket science.
I’m sure Medicare would be very interested to know that they are billing for re-usable supplies and equipment…assuming they are charging Medicare patients the same thing and way they are everyone else (which they are supposed to).
If someone felt compelled to fax this article to CMS (The Centers for Medicare and Medicaid Services), I’m sure they would quickly re-think their position.
I’m just saying.
It appears his insurance company did not have a contractual agreement with Carilion,in which case he would have only had to pay the contractual amount his insurance company negotiated with Carilion. Had he had Anthem or United Health Insurance, for example, he would have had to pay only the lower negotiated fees.
Great analogy! Too bad we don’t have the option of choosing from a “menu” when it comes to health care.
Speaking of “choosing”, was the option of having “robotic” surgery included the “menu” prior to his signing his “consent for treatment”?
Reed Embrey told me the advantages of robotic surgery were explained to him; the price differential was not. The advantages are substantial — small incisions, more precise cuts, etc.
None of this will change in America as long as the entire healthcare industry is set-up to make a profit just like the grocery store and used car lot down the street from your house are. This ain’t rocket science.
Entities that make a profit are ALWAYS more efficient and less expensive than government purveyors of the same good or service. That’s the part leftwingers never seem to get despite hundreds of examples. Is it because y’all have an agenda? Or are you just plain stupid?
Oops, my bad! I read this too fast, his insurance did have a “contract” which is far better than what he would have had he been uninsured. Hopefully this surgery won’t result in an increase in his premiums. So many questions, so few answers.
I’m with Rick on this. Didn’t we fix this with obamacare? You can see numerous bad things in store for the future. Medicare will reduce it’s reimbursements. Fewer hospitals will accept medicare. More people will not be able to afford treatment. More will die. Who was that wise person who said, during the healthcare debate, “to solve the problem, look first at where the money goes”???
How can it be charity care if, as Earnhart said, Carilion is “taxing” the insured to recoup the cost?
Dear Suzie,
What’s your opinion of how the insurance game tilts the free market with a giant benefit toward the wealthy? It’s like taxes, it’s not how much you pay, it’s what’s left over to live on. How much did it cost the Kennedy estate to fight a losing battle? Why are people that can afford to pay their own bills allowed to participate in a safety net for those that can’t?
Life is a death panel long before it’s a health issue. The concept of health insurance is no different than one of those chain letters where you send some money with the promise that someday you’ll get a big pile when your name gets to the top of the list.
Plain stupid is the notion that everyone is entitled to extraordinary care at unlimited cost. When that cost exceeds the total gross life time earnings of the patients it’s more than obvious adding a middle man for profit is not an improvement or a solution.
Cold hearted or not, your healthcare is just like everything else, you get what you can pay for. Remove the lottery system and let the healthcare system exist in the real economy.
I wonder if Zsa Zsa got a new hip on the same leg that got amputated? Money is no object as long as someone else pays the majority of the bill just because they are still healthy and a payer, not a collector.
The profit aspect is a moral issue, depending on how it’s distributed, spent, or re-invested.
Yes, I’ve been accused of being altruistic, that’s not political.
If as it has been stated that for profit entities are more efficient, how can one explain under any circumstances thirteen hours waiting for a doctor, who then gives a medication which the patient is allergic to, forces a procedure, without contacting patient’s personal physcian as requested. You go to this hospital at your own risk, just leave all your money and humanity at home.
“Finally, also built into Carilion’s charges for paying customers is the uncompensated care it performs. In the year Embrey had surgery, that amounted to $129 million, Earnhart said.”
And there’s the problem… He’s paying for everyone else. Some crack whore who doesn’t work can go in there and get the surgery for free while this guy, who works for a living and contributes to society gets the shaft… and a lawsuit on top of it.
Oh, and tell Carillion to quit feeding us the “non-profit” BS.
#6 “Entities that make a profit are ALWAYS more efficient and less expensive than government purveyors of the same good or service.”
Yeah, that’s why the son of a guy I know just retired from the military and is back in Afghanistan working for a private contractor doing exactly the same thing he did in the military but is making almost 5 times as much and with virtually the same bennies. That’s our tax dollars paying for that.
Controlling the kinds of costs described here are the key to “fixing” healthcare in America, not mandatory insurance. I have personally seen the same types of costs a few times. Go to the ER with chest pain. Hopefully it will be nothing serious because your chest will really be huting when you see that they charge you about $100 for two baby aspirin. The reason? They said they have to charge you for the whole bottle. What kind of stupid lame excuse is that? What kind of dope is doing the buying for the hospital pharmacy that can’t find aspirin cheaper than $100 a bottle?
“Entities that make a profit are ALWAYS more efficient and less expensive than government purveyors of the same good or service.”
LOL … Depending on the source you look at, the administrative costs of private health insurance companies are anywhere from 2 to 6 times the admin costs of Medicare.
Re: #5
Hum?
“…the advantages of robotic surgery were explained to him; the price differential was not”?
I’m neither doubting the man nor challenging the report — but that seems very different to three experiences that my wife and I have had with Carilion re: differential cost for optional / more advantageous techniques.
Each time the options and cost were explained in detail. In two cases, they had us pay half of the extra cost — up-front. In all three cases we had to sign a request for the more expensive procedure and acknowledge, in writing, that we would pay the the extra cost, which would not be covered by our insurance.
OTHO, I have had a few experiences with them where I had to dispute a bill, repeatedly, before they finally got it right. Specifically, I would win round one and two to three months later get re-billed for the same thing. Win round two on the same charges, only to have round three pop up later. Etc.
The biggest problem is finding out who to deal with and what the heck they are talking about. They can pass-the-buck far better than most.
OTOH, having dealt with the same bull with a number of other health-care institutes (for-profit and not-for-profit) over the years, I can assure you that the problem is not unique to Carilion.
FWIIW, I have gone so far as to sue and win or win after tell another hospital “See you in court.”
One time the charging practices / misrepresentations, which I disputed lead to an investigation by the Federal Government and major recovery of both Government’s and insurance companies’ payments which they had received — not unlike what (o\ ! /o) is suggesting at #3.
FWIIW2, The best Hospital with which I ever dealt, at explaining things care-wise, options-wise, finances-wise, etc, was DC Children’s. Our youngest was in their Neonatal-ICU for an extended period. The care that they took to keep us (and all the other parents who we got to know) in the loop was remarkable. We were far luckier than many, in our outcome. However, I saw the way that they dealt with hard decisions, in a bad situations, for a newborn and with families under unimaginable stress. Great people working there!
FWIIW3, the worst, hospital with which I ever dealt, billing / finances-wise, also happened to be one of the best care-wise — so I not name it.
Mostly bad record keeping, as far as I could tell. Lots of charges for doctors who my wife never saw, and meds & procedures that my wife never had. Some even dated on the invoice as provided before admission & after discharge. Duh!
They also sent an initial bill for some items two years late — long after BC/BS or my catastrophic policy would have considered accepting it. I fought. I won. Had they billed on time, one of the insurances would have paid, as I had paid all the out-of-pocked for that year, which was required by the catastrophic policy. Their mistake, not my liberality that they missed billing before the filing deadline.
We nearly ended up in court over a bill for the full cost of a wheelchair. I had rented it from them. They alleged that I had never returned it. I sent them photo-copies of the signed receipt for the return. They would agree it had been returned. A few months later the the loop would replay. Finally, I said “Sue me.” Never heard more. Assume their attorney looked at the records and dropped it.
Always go over the bills with a fine tooth comb. Sometimes you just have to fight. In my experience, professionals that represents consumers in medical billing disputes can cost you — but still can be far less costly that what they save you.
Re: #15, overhead, and profit
In an earlier thread I posted about “minimum medical loss ratio” and commissions, brokers’ fees, etc.
Maybe folk might want to engage now.
See: http://tinyurl.com/47r8q8s
**
March 15, 2011, 1:22 pm
The Debate Over Brokers’ Fees
SNIP
Under the law’s rules governing an insurance company’s minimum medical loss ratio, insurers must spend at least 85 cents out of every dollar they collect in premiums on the health care of their customers. While acknowledging the important role brokers play in helping people buy insurance policies on their own, the regulators included the cost of commissions in their calculation of administrative expenses.
The brokers and others, including some state regulators, are now actively lobbying to exclude commissions, and Senator Rockefeller said he is against the new treatment of these costs.
SNIP
**
So, what do you think about any limit on the percent of premiums paid that can be kept as overhead & profit by the companies? Should commissions, brokers’ fees be counted as part of that limited percent?
Do you think the mandate (assuming it survives SCOTUS review) has a bearing on limits on overhead & profit?
DaveH,
I’m not sure the conversation Reed Embrey had re: the advantages of robotic surgery was with his surgeon (who is not affiliated with Carilion, except that he has operating-room privileges there) or with Carilion.
If it was with the former, then the difference in prices the hospital would charge, conceivably, was not explained.
Fyi, Reed says the surgeon quoted him a price for the surgeon’s fee and that is exactly what the bill was.
Pat Palmer, a former Blue Cross employee who founded Medical Billing Advocates of America (she is Candice Butcher’s mother) told me that it’s common for the differences in pricing of traditional vs. robotic surgery not to be mentioned.
She also said that MBAA finds mistakes in 8 of 10 hospital bills they examine — and this applies to all hospitals, not only Carilion.
Dan, Why is it an either/or situation in the first place? Everything in this life is about how much you can afford to pay, or you do without.
I’ve been in and out of any health insurance for any number of reasons. It’s not a common benefit for most, anyone reading the deal for companies that fake the benefit would be a numbskull to buy in. If the deductible and co-pay will bankrupt you, why bother?
The indigent care argument seems pretty weak. No doubt they might patch a person up with minimum life sustaining ability, but they aren’t going forward with rehab or the latest bionic limb if they amputate one.
The last time I saw a doc I went with a checkbook and evidence I could pay the bill. I didn’t get a discount and they didn’t have to dance and wait to get paid.
People still get sent home to die, and I personally don’t have a problem with that. Others brag about how many heart surgeries and the 500k it cost everyone else so they could be around to brag about it.
Some lives aren’t worth extending and finances shouldn’t be the measure. I can’t really think of what is the proper measure. Death with dignity perhaps? If it’s just a repair, congratulations, you have been saved and you can make monthly payments until you die, if they let you.
Not surprised.
Simple yearly checkup results in multiple “non-paid” bills from Centra. Even though I have records clearly stating that Cigna paid the bills. I have to believe the health care companies send out duplicate bills hoping we will pay them even though our insurance has already taken care of these expenses. Sad state of affairs we are in.
Re: #20
“I have to believe the health care companies send out duplicate bills hoping we will pay them….”
———-
I have long suspected the same and might suggest there are even more “even though” considerations.
Went through this with my husband in June of 2998 and it took us to our knees financially, but we survived it. Medical issues take down many families as even something as simple as one surgery and a couple days in the hospital can easily be 40K. Few families have that kind of money in the bank and few have the ability to pay whatever insurance does not in one swoop. It took us well over a year to repay the hospital, doctors, & labs and we are still struggling to rebuild our “nest egg” for the next crisis. It is not easy and the medical system does so little to help you feel like you understand and even less to help you feel like you got a fair price. It is the “mystery” that frustrates you and it should not be acceptable.
“Some lives aren’t worth extending”
Who decides?
A menu would not work. If offered heart surgery for $5000 or $50,000, most would pick $50,000, thinking more is better.
LOL … Depending on the source you look at, the administrative costs of private health insurance companies are anywhere from 2 to 6 times the admin costs of Medicare.
That’s one of the more ridiculous comments you’ve made, Dan, and that’s saying quite a bit. Medicare is going bankrupt, and 0bamacare would be much more expensive than private health care.
http://www.weeklystandard.com/blogs/medicare-loses-nearly-four-times-much-money-health-insurers-make_552860.html
http://www.nypost.com/p/news/opinion/opedcolumnists/reid_fuzzy_math_bykKhLTE2JnwN40xtayzWM
The only ‘study’ than shows otherwise is authored by Cristina Boccuti who happens to be an analyst employed by…ooops..Medicare.
What is it with leftwingers and the lack of basic research skills? Sheesh!
One large reason for Medicare’s financial problems is fraud, by medical providers. Millions of dollars are lost yearly due to fraud. Even when some of the perpetrators are caught and prosecuted, most of the fraudently received money is not regained.
I was trying to decide if Jeffrey King was being serious or satirical.
One large reason for Medicare’s financial problems is fraud, by medical providers. Millions of dollars are lost yearly due to fraud. Even when some of the perpetrators are caught and prosecuted, most of the fraudently received money is not regained.
How can this be? I thought the government was honest (compared to evil private sector robber barons) and only wanted the best for everyone.
Welcome to the world of socialized anything. Fraud and indifference are exactly why the government can NEVER compete with the private sector in anything.
The government isn’t stealing the money, private Dr’s and durable medical equipment companies are. Welcome to the world of lying, cheating medical providers.
Most medical providers are honest, but there are crooks in every profession. It’s called greed.
Yeah, that’s why the son of a guy I know just retired from the military and is back in Afghanistan working for a private contractor doing exactly the same thing he did in the military but is making almost 5 times as much and with virtually the same bennies.
Someone’s wage isn’t necessarily reflective of the cost of a whole operation, Granddad. Maybe the private firm is that much more efficient that it can pay the man five times as much.
“29.The government isn’t stealing the money, private Dr’s and durable medical equipment companies are. Welcome to the world of lying, cheating medical providers.”
http://piratenews.org/billfrist.html
Like former GOP Senate Majority Bill Frists’s company!
Private sector ‘not yet better or cheaper’
Competition is the key IMO and there are areas where no competition and profit have made the cost prohibitive and THAT is the problem. Not every service that can be profitable can be afforded by all. Is there nothing for which profit should not be the motive? As it is now, hospitals, doctors, medical care providers and insurance providers do not really compete and whether it is government tax dollars, insurance company dollars or dollars out of pocket without competition there will be no savings.
A few observations:
1. Margins are much higher in the medical field than in most businesses. A friend of mine is the CEO of a company that sells to both the medical and automotive industries. His margin when he sells to medical companies is more than double what he makes when selling to the automotive industry. I have no reason to believe that his experience is unique.
2. It is virtually impossible to price shop for medical services, which means in effect that there is no competition. This puts you at the mercy of the provider. And paying more definitely does NOT guarantee you superior care.
3. It is also difficult to ascertain the quality of the providers you are entrusting your life to. And if they do make a mistake, chances are you will end up paying for whatever they do to fix their own mistakes.
Most of the debate I hear about health care is disappointing. The biggest problem is that it just costs too much. We need to talk about that, not where the insurance comes from to pay for it.
Dan this was a great article and clearly makes the point I have been saying all along. This is the problem with our health care system and healthcare reform does nothing to solve this issue. You guys continually complain about the insurance companies and you even mentioned them in a comment above but the real problem is the health care providers.
Carilion’s practice of charging for other unpaid bills is also not something new. All medical facilities that except Medicare/Medicaid charge other patients more to make up for the lost revenue from the government programs. Again, healthcare reform does not address this issue. This should be illegal.
One last thing, in the article you mentioned that the insurance company paid for the out-patient rate and should have been in-patient. When the insurance company was contacted they corrected the payment. Did the insurance company pay incorrectly or did Carilion bill them incorrectly? I don’t know how many times I’ve had to call a doctor’s office back to get them to resubmit a claim because they did it wrong the first time. I wonder how many other people don’t bother and just pay Carilion anyway? Maybe they should keep track of this and give people a hidden discount for all the money they’ve stollen.
@22 Sandi,
I believe you have spoken about the financial burden from medical bills before and I have posed a similar question.
You mention a few days in the hospital can be $40k, most likely more, but if someone has insurance, then most policies have a max out of pocket such as $2,500 or $5,000 per year.
I don’t know your situation or if your husband had insurance, but if so then a max out of pocket should have been applicable. Could still be a burden, but manageable.
Regardless, I wish you guys the best and speedy financial recovery.