After years in the health insurance industry, I believe that you should do everything possible (while maintaining legal, moral, and ethical standards) to keep more of your money in your pocket and less in the pockets of health insurance companies and medical services providers. Hospitals routinely overcharge patients for their services, often charging them for services which were not even performed. Here are some strategies to take in order to avoid being ripped off by hospitals and physicians.
What Happened to Transparency?
Most businesses work hard to be transparent when it comes to the pricing of products or services. When you order a book from an online retailer, you know exactly how much it is going to cost. Similarly, when you order a meal at a fancy restaurant, it’s pretty easy to know what you are paying for and what the resulting bill will look like. When it comes to hospital stays, however, there is nothing clear about the pricing.
The reason hospitals love to hide their prices is because they know that the majority of patients will not review the bill closely. The bottom line is always about how to make more money, and being deliberately confusing regarding billing is a good way to generate income.
If you have ever taken a close look at a hospital bill, you know how difficult it can be to figure out exactly what you are paying for. The bills seem to be written in a foreign language. This makes it easy for hospitals to overcharge for their services. Industry experts estimate that health consumers are overcharged approximately $10 billion per year, which averages out to about $1,300 extra charges per hospital stay. Whether these overcharges are deliberate or are simple (and honest) mistakes is irrelevant; consumers are being taken no matter how it happens.
Comparison Shopping Works for Medical Care Too!
However, there are things you can do to prevent being overcharged by a medical facility. One of the most important is to shop around for services before undergoing any elective procedure. Prices may vary greatly depending on the hospital. For example, heart bypass surgery can cost as much as $230,000 at the Valley Hospital Medical Center in Las Vegas, whereas the same procedure can cost a third of that at the Mayo Clinic.
Research Estimated Costs Ahead of Time
When possible, call the billing department of each hospital in your area, both for the estimated cost of the procedure and the charge for a room. This will give you a rough estimate to compare with other hospitals. Also, make sure you ask what items are included in the room. For example, toiletries and personal items such as tissues are not typically included. In order to avoid being charged for those items, you can bring them from home. The same goes for your medications; if you are currently taking daily prescribed medication, bring your pills from home. That way, you can avoid using costly hospital-dispensed medications.
If your hospital stay is a scheduled procedure rather than an emergency, contact your insurance company ahead of time to find out what exactly will be covered. Make sure you read the fine print that explains any exceptions or exclusions. This way, you will not be surprised by charges you thought were covered.
It can also be helpful to ask your doctor for an estimate of the cost of your procedure. For the most part, doctors have a good idea of their hourly rates, and their charges often include pre and post-op visits.
Verify Coverage for Services
Another important thing to do to avoid overcharges is to make sure that everyone performing services participates in your insurance plan. This includes anesthesiology, radiology, pathology, and any other outside provider. If any of them are out-of-network providers, the cost to you could be as much as 50 percent higher.
When it comes to tests that are run while you are in the hospital, keep a written record of procedures performed and medicines dispensed, and why. If this is not possible for you personally, try to designate a family member to keep track for you. You would be surprised at how many charges are made for tests that were not done. For example, you might go in for surgery and be erroneously charged for a newborn screening.
Compare Your Bill to Your Benefit Summary
When you receive the Explanation of Benefits (EOB) from your insurance company, review it carefully to make sure that the items are the same as on your bill. It helps to ask for an itemized bill from the hospital as well. When you get an itemized bill, ask for clarification if there are vague items listed such as “lab fees.” Do not settle for a vague explanation, but ask someone in the hospital’s billing department to explain exactly what for the charges mean.
Once you have both the bill and the EOB, compare the two documents and make sure they are the same. This comparison can give you an idea how much you are going to have to pay yourself.
Don’t Let The Billing Department Bully You!
Absolutely do not let the hospital try to strong-arm you into paying your bill before you leave the hospital. They will tell you that you are required to pay the bill upon release, but this is not true. You have time to review your bill and compare it to the estimate given to you prior to your stay. If they are adamant about you paying immediately, you can be almost positive that there will be overcharges.
Negotiate Your Bill
Another way to avoid paying too much for a hospital stay is to hire a bill negotiation service. Any of the bills that are over $250 can be reviewed and often negotiated to a lower price. Although the service will typically take 35 percent of the amount saved on a bill as their fee, you may still come out ahead if the reduction in cost is significant. In addition, if a bill cannot be lowered successfully, usually you will not pay anything for the service.
One of the benefits we provide for our readers is a Medical Bill Review Service. You can find more information about this service by visiting our website, or simply click here.
If you do not want to hire a bill negotiation service, you can also negotiate bills on your own. For example, many hospitals or physicians will offer a discount for up-front cash payments. If you have a Health Savings Account, you can use those funds to pay for hospital bills and services. You can also talk to the billing manager of the hospital to find what discounts they are willing to give, or if there is a charitable assistance program available for patients in your income bracket. In many cases, being aware of the cost involved with collecting a bill (whether through monthly payment arrangements and billing statements or through a collection agency) gives you some real bargaining power.
Although making money is the bottom line for hospitals, saving money is the bottom line for you. If you do your research ahead of time and make informed decisions about your health care, you will be able to save hundreds, if not thousands, of dollars. It is well worth your time to go through your bills with a fine-tooth comb in order to keep more of your money.
Wiley Long is President of HSA for America, and a passionate advocate for consumer-based solutions that will improve price transparency and lower health insurance and medical costs for people purchasing individual and family health insurance plans.