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10 ways to avoid outrageous hospital overcharges

What's more, most insurance plans have a cap, meaning, "Money siphoned off by errors or fraud can chip away at your lifetime total," says Tom Brennan, Blue Cross/Blue Shield's director of special investigations.

And your credit rating may be at risk too. "Hospitals have become very aggressive about collecting money," says Nora Johnson.

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And, according to a 1998 study of hospital billing procedures, they go to extraordinary lengths to discourage patients from delving too deeply into their bills. "Citizens are becoming more educated about hospital billing and taking responsibility of ensuring that their charges are correct," said the study's principal author, Dr. Kimberly Elsbach, of the University of California, Davis. "Hospitals are countering that with their own efforts to discourage people from becoming involved with challenges or audits because it costs them a great deal of time and money."

And they waste no time turning accounts over to collection agencies or filing liens. Some have even resorted to having overdue debtors arrested if they don't show up in court.

Nevertheless, experts say you can take these steps to make sure that you're not taken for a ride.

  • If your hospitalization isn't for an emergency, check your insurance policy to find out just what it will cover and how much it will pay. Be sure to carefully review the section on "exceptions and exclusions." It will tell you what your plan will not cover.
  • Phone the hospital's billing department and ask them what you will be charged for the room, and just what the room charges cover. If tissues aren't included, for example, bring your own.
  • Ask your doctor to estimate your cost of treatment. Also, ask if you can bring your regular prescriptions from home to avoid paying for medications administered at the hospital.
  • Make sure that everyone who will be treating you -- the surgeon, anesthesiologist, radiologist, pathologist, etc. -- participates in your insurance plan.
  • If you can, keep your own log of tests, medications, and treatments. If you are not able to, ask a friend or loved one to do it for you.
  • At some point you will receive an explanation of benefits (EOB) from your insurance company (if you're on Medicare, you will receive a summary notice). It will say, "This is not a bill." Don't toss it in the trash. Examine it. It will tell you how much the hospital is charging, what your insurance plan will cover, and what you will have to pay out of your own pocket in deductibles and co-payments.
  • Never pay your bill before leaving the hospital -- even if you're told that it's required.
  • When you get your bill, read it carefully. Compare it to the log you made, to the EOB, and to the estimate of costs you requested before you were admitted.
  • If there are items you don't understand, call the billing department and your insurer, and ask them to explain. Don't accept bills that use terms like "lab fees," or "miscellaneous fees." Demand an itemization. If you don't get satisfaction from the hospital billing department -- and you probably won't -- appeal in writing to the hospital administrator or patient ombudsman.
  • If you are still scratching your head, ask for an itemized bill as well as your medical records to confirm whether you received the treatments and medications you've been billed for. Every state now requires hospitals to provide itemized bills.

Since helping sort out his late father's medical bills, Richard Clarke, the former hospital CFO, has became founder and president of the Healthcare Financial Management Association, an Illinois-based association of medical finance officers who work with the American Hospital Association and other groups to develop more consumer-friendly billing.

They're aiming for easy-to-read bills and printed pamphlets that will help consumers understand hospital-speak. Until that happens, however, consumers will be on their own.

-- Posted: Feb. 6, 2004




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