Guest post from clearhealthcosts.com– We’re bringing transparency to the health-care marketplace.
Unusual billing practices from hospitals are the topic of this piece, written by our friend iPatchman. He received a master’s degree in health policy management and economics from the Columbia University. He currently has his own health-care consultancy, Health2Social.
Consider this a lengthy but cautionary tale. I just spent two hours going back and forth between my provider and my insurance vender trying to decipher a health-care bill. I was trying to figure out why my doctor billed me $441.58 for a service date, when my insurance company claimed I owed only $131.99. I had originally called the hospital because I found it odd that they were billing me an amount that was much more than the difference between what they billed my insurance company and what they received as payment. (As discussed in previous blog posts, the amount a patient owes in-network is usually a co-payment or co-insurance based on what the insurance company contract with the provider determines is owed for the service.)
It usually goes something like this:
Covered Amount = Amount Billed to Insurance – preferred provider or network discount. The covered amount is then divided into what the insurance will pay and what the patient owes.
In my case, I pay 10 percent of the covered amount (my co-insurance), so it would be: Covered Amount – (% co-insurance*Covered Amount) = Amount Paid by Insurer to Hospital.
The hospital wrote on my bill:
Amount Billed to Insurance ($1204.00) –Insurance Payment ($1083.61) =
Amount Owed by Patient ($441.58).
Now, anyone can see that the difference between the billed to insurance and amount actually paid by insurance is only $120.39 (the maximum amount owed to the hospital for my visit), and that is without taking into account any PPO discount, which lowers the amount further. Still, my doctor’s account representative insisted that this $441.58 is the amount based on theexplanation of benefit (EOB) from my insurance vendor, so that is what I am being billed. I tried to explain that it negates any logic that the amount my doctor is billing could be more than three times the amount the hospital is even owed — but my logic fell on deaf ears.
The hospital also refused to contact my insurance vendor to look into this matter, saying it is the patient’s job to do this. I decided to hold off on explaining that it is not the patient’s job or place to coordinate between the hospital and the insurance companies (which is the exact reason billing departments exist at hospitals) since I wanted to call up my insurance vendor myself to get a copy of the explanation of benefits.
From my education and work background, I have analyzed health claims for hundreds of thousands of employees from dozens of Fortune 500 companies. This is why I never pay any doctor or hospital bill until I review it and compare to the EOB from the health plan. I cannot imagine how most people, who do not have the health-care education or work experience I do, deal with their health-care bills. I catch mistakes by the health plans and the hospitals all the time, and most times they are for hundreds of dollars.
After obtaining the explanation of benefits from my insurance vendor I was left with the following explanation:
Charges Billed ($1629.54) – PPO discount ($309.59) = Covered Amount ($1319.95),
Insurance Payment ($1187.96) + Patient Responsibility ($131.99) = Covered Amount ($1319.95).
This now makes sense as my responsibility was exactly 10 percent of what my insurance company decided was the covered amount. Still, when I asked my insurance company to send this information to my doctor, the representative said they had already done so, and had already paid, so they would not do it again. They were willing to fax me a copy instead. Again I encountered the misconception that the patient is somehow responsible for communication between the hospital and insurer. In this case, though, I wanted to call my provider back anyway because I need to understand where their mistake was.
Calling back my doctor did not result in any productive conversation as the representative was only able and willing to read back to me what they had in their system. I tried to explain again, but got nowhere. When I asked my provider to start an inquiry into this matter, the rep told me to ask my insurance company to send them the EOB again. I politely explained that I can make a few phone calls, like I did, but I cannot facilitate the communications between the hospital and insurance company and that is what they were for. I also explained that this practice of billing a patient a large amount that was not owed was either criminally negligent, or fraudulent, but in either case I expected a full inquiry into this matter (mind you, my provider mostly deals with patients with cancer – patients who have enormous health-care bills, not to mention plenty of other things to worry about). I asked her to have someone in a management role in the billing department call me back, but she responded that they do not call back anyone. She said I can call in 7 to 10 days to see if there was an adjustment.
When I asked if they had received the fax with the new EOB I had sent them, she responded that it takes 24 hours for them to receive the fax digitally into their system. This cracked me up, since not only do they require patients to use an anarchic method of communication, but they do not even really have a fax machine, and instead use the digital system to receive faxes (which makes you wonder why I could not e-mail them the EOB).
The takeaway lesson here is simple.
Think carefully about automatically accepting or paying any bill you receive from a health care provider. It’s only prudent to review and compare all bills to your plan’s explanation of benefits.
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More from clearhealthcosts.com:
How much does an M.R.I. cost? The view from the medical billing office
Mammogram costs: A Boston-New York rivalry
Why so many angioplasties? A mystery story
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