With healthcare costs rocketing toward the stratosphere and about 14% of Americans wandering around without health insurance, you’d expect hospitals and insurance providers to make it easier to receive reliable care. Well, that’s not necessarily the case.
Among the millions of dollars the medical industry charges patients each year, it’s easy for patients’ medical bills to become artificially inflated without anyone noticing — especially the patient. Some instances of overcharging can be chalked up to honest mistakes in billing, but it seems many times there are deliberate attempts to mask charges, inflate prices, or otherwise dump unnecessary costs on the patient.
Here are some of the tricky tactics healthcare providers use to inflate medical bills, and some ways to protect yourself.
1. Adding “invisible” charges — Often medical bills come in lump form, without showing exactly what is being charged for. But if you have the foresight to ask for an itemized bill, you may see charges that seemingly come from nowhere – treatments you don’t recall receiving, or services you were told were included. For example, one patient received a bill for her husband’s hip surgery that included charges for newborn blood tests and a crib mobile. Another patient reported having $142 added to a bill, for a set of x-rays that had supposedly been left off the first bill. The patient pointed out the x-rays, clearly accounted for on the lower bill, and was simply referred again to the higher one. The tricky part is that the technical language on the bills makes it easy to overlook such charges, so most patients just pay.
How to avoid it: If you rack up a large medical bill from surgery or an extended hospital stay, ask for an itemized bill and make sure you understand everything that’s on it. Those charges add up quickly, so you probably only want the ones you’re responsible for.
2. Charging large sums for small items — It’s not uncommon to see large amounts charged for cheap, everyday items on a hospital bill. You may have heard the example of the $12 “mucous recovery system” — a box of tissues. A 10-cent pill can sometimes cost $5 or $10, or a bag of ice cubes can cost $30 as a “thermal therapy kit.” In one example, a 70-cent I.V. cost one patient $90. Haven’t they ever heard of Target?
How to avoid it: If you foresee a need for things like tissues or ice packs, bring your own or have a friend bring you one, rather than pay mind-boggling fees for them. You can also contact a medical billing advocate, a company that negotiates hospital bills for a fee.
3. Double-billing — Often a medical bill can include separate charges for items that were included in other bills. For example, hospitals sometimes charge separately for the sheets and pillows on a hospital bed, a cost that is usually included in the price of the room. It’s also possible to see a charge for the scrubs, masks and gloves worn by an OR staff on both the surgery bill and the bill for the operating room time.
How to avoid it: Sometimes the only way to avoid these charges is to ask questions about your bill. Ask what was included in the room charge and other vague charges, and don’t pay the bill before you know what’s there. They might think you’re annoying, but at least you won’t be bankrupt.
4. Balance billing — If you’re lucky enough to have health insurance, you may notice that some doctors are “in-network,” meaning they have a contract with your carrier, while some are “out-of-network.” The insurance carrier has pre-set rates they will pay the in-network doctors, but sometimes you will wind up being cared for by a doctor who doesn’t have a contract with your carrier. Often these doctors want to be paid much more than the insurance companies are willing to shell out. Then, when the carrier denies them their full payment, the doctors have a tendency to ungraciously dump the balance on the patient. This, of course, means patients are paying a lot more than they owe by their insurance plans.
How to avoid it: Thankfully, balance billing is already viewed with scorn by the general public. It is illegal with regard to Medicare, and California has even made it illegal in general. If you do end up being referred to another doctor, make a point of asking if they’ll take your insurance, and if you can, wait until you find one who does.
5. Charging more for the uninsured — It seems backwards, but hospitals charge much less to insurance companies than they do to patients without insurance. According to AlterNet.org, prices for uninsured patients can be up to 70% higher than what insurance companies pay. And since the low-income population makes up the largest portion of Americans without health insurance, you can see how this is a problem.
How to avoid it: If you’re uninsured, find out about your hospital’s patient discount program, or try to negotiate your bill. Only about 13% of patients ask for a discount on their bill according to BottomLineSecrets.com, and oftentimes they get some kind of price reduction. Asking in person helps.
6. Charging for charity — Many hospitals are registered as nonprofits, which allows them to get some big government tax breaks. Part of the deal is they’re required to offer free services to needy and low-income patients, but unfortunately in a lot of cases they charge these patients just like everyone else. For example, in 2003 the Illinois hospital chain Advocate took heat in the press for underserving needy patients and inflating their charity figures, despite being a nonprofit, and religiously affiliated.
How to avoid it: The only thing needy and low-income patients can do to avoid this practice is to be aware of a hospital’s nonprofit status, and ask about discounted or free services for the poor. Simply not paying the bill is another path many underfunded patients take, but that leads us to the next tactic on the list…
7. Relentlessly pursuing debts — Hospitals can be friendly on the inside, but once you’re in debt to them, you can see how pushy they can be. Hospitals will often go to extreme measures to collect on money owed them, including hounding the patient with debt collectors, suing, garnishing wages, placing liens on property, and even pursuing the patient’s spouse. Hospitals have even been known to refuse care to patients who still owed previous debts.
How to avoid it: Paying for medical bills on a low-interest credit card is a good way to avoid being indebted to them. Also, don’t use home loan money to pay for medical bills, because it can put your home at risk. Asking about payment plan extensions is another good method.
8. Denying reasonable reimbursement — It’s almost expected that insurance carriers would try to avoid paying medical costs, but some carriers have been known to go to greater lengths than others. In theory, insurance companies use independent research to determine their patient reimbursement rates. In reality, several carriers were using Ingenix, a research company owned by the carriers’ parent company, UnitedHealth Group. Ingenix would report skewed figures in order to save the carriers money, resulting in claim denials for common, reasonable treatments, including chemotherapy.
How to avoid it: Fortunately, agencies like the New York Attorney General’s office have been investigating insurance companies for practices like this, so instances of reimbursement denial should diminish as cases like this are uncovered. For now, it will pay to know what is covered by your insurance carrier and what isn’t, so you can avoid falling into a reimbursement trap in the future.
It’s also helpful to know that medical billing advocates (for example, the Medical Billing Advocates of America) exist to help clients reduce or eliminate unreasonable medical charges. Companies like this negotiate with hospitals to remove unnecessary or unfair charges from patients’ bills. If you are stuck with a medical bill you can’t pay, this can be another helpful option.