Demystifying, and Maybe Decreasing, the Emergency Room Bill
DURING a snowstorm last winter, my 6-year-old son fell and cut his chin — not outside on the ice, but inside on the tile bathroom floor. My husband walked our son, Charlie, through the knee-high snow to the local emergency room.
Charlie’s gash was small, less than half an inch long, but deep. The hospital called in a plastic surgeon, who put 14 tiny stitches into his chin.
Charlie called the incident “the worst day of my life” — mostly because he had to spend hours in a hospital instead of throwing snowballs. Weeks later, when the bills arrived, we had our own bad day.
The total charges for his minor spill came to $5,398. The largest single charge was a shocking $4,950 from the plastic surgeon.
Emergency room bills are notoriously high and perplexing; patients often are left feeling like captives who have few alternatives. It is impossible to know how much the services will cost when you walk in the door. The hospital bill, which arrives weeks later, may include seemingly inflated charges for things like Tylenol or an M.R.I. Doctors who treated you may send their own separate bills, further complicating the payment process.
The first step toward managing this expense is understanding what goes on in the hospital’s billing department.
NOBODY PAYS RETAIL The majority of hospitals are required by law to treat any person who walks into an emergency room whether that person has insurance or not. To make up for those who cannot or will not pay, a hospital sets its so-called gross charges very high.
At the same time, hospitals negotiate contracts with managed care and commercial insurance carriers that specify prices much lower than the gross charges. Medicare and Medicaid dictate lower rates for medical services to hospitals. In virtually every instance, “we get paid a lot less than we bill,” said Michelle Leone, senior vice president for revenue cycle operations at Continuum Health Partners in New York City.
You may receive a statement that shows your E.R. visit totaled $3,000, for example, but your insurer may agree to pay just $500, which the hospital will accept. Depending on your plan, you owe either a portion of that $500 — say, 20 percent, after a deductible — or a co-payment.
People without insurance end up with bills that are much higher than those for covered patients, because the uninsured are charged the hospital’s gross rates.
“People don’t realize that the prices on the bill are just a starting point,” said Dr. Jesse M. Pines, an associate professor of emergency medicine and health policy at the Center for Health Care Quality at George Washington University. “Prices listed on the bill often don’t represent what the insurer or the patient will ultimately pay.”
The prices ultimately paid to a hospital can vary considerably for treatment of similar medical problems. “It’s kind of like the airline industry,” Dr. Pines said. “It’s rare that two people on a plane will have paid the same amount for their seats.”
COMMENT: This is a huge personal peeve of mine. If you could pay the same rate, as the insurers negotiate, we wouldn’t HAVE a “Health Care Crisis” in my opinion.