Emergency Departments Still Overcharging Patients, Lawsuit Filed

Nashville, TNThere was a flurry of reports and studies about five years ago that found routine price gouging in emergency rooms nationwide, and it was worse for the most vulnerable populations – poor and minority patients. It appears that, no matter how advanced medical technology gets, many emergency room patients are left in the dark, and left with an unexpectedly huge ER overcharges bill.

The 2017 study, published in JAMA Internal Medicine, determined that emergency departments charge on average 1.0-12.6 times  ($100-$12,600) more than what Medicare paid for services.

“There are massive disparities in service costs across emergency rooms and that price gouging is the worst for the most vulnerable populations,” said lead author Martin Makary, M.D., professor of surgery at Johns Hopkins, and reported by Fierce HealthCare. “This study adds to the growing pile of evidence that to address the huge disparities in healthcare, healthcare pricing needs to be fairer and more transparent.”

The researchers found that on average:

• Emergency medicine doctors had a markup ratio of 4.4 (340% in excess charges), or emergency medicine physician charges of $4 billion versus $898 million in Medicare allowable amounts.
• Charges were higher when a service was performed by an emergency medicine physician rather than a general internal medicine physician.
• Overall, general internal medicine physicians had an average markup ratio of 2.1 compared to the Medicare allowable amount.
• Wound closure had the highest median markup ratio at 7.0, and interpreting head CT scans had the greatest within-hospital variation, with markup ratios ranging between 1.6 and 27.
• The median Medicare allowable rate is $16 for a physician interpretation of an electrocardiogram, but EDs charged anywhere from $18 to $317, with a median charge of $95 (or a markup ratio of 6.0). General internal medicine doctors in hospitals charged an average of $62 for the same service.
• ERs that that charged patients the most were more likely to be located in for-profit hospitals in the southeastern and Midwestern U.S., and served higher populations of uninsured, African-American and Hispanic patients.

A 2016 study found that 1 in 5 inpatient emergency-room cases result in surprise bills. The Kaiser Family Foundation survey said that among insured, non-elderly adults struggling to pay medical bills, charges from out-of-network providers were a contributing factor one-third of the time. And 7 in 10 individuals with unaffordable out-of-network medical bills said that the provider wasn’t in their plan’s network when they received care.

$100 million Federal Lawsuit

According to a $100 million lawsuit filed in federal court last year by UnitedHealthcare, the ER overcharging problem is not going away. The nation’s largest health insurer has accused Tennessee-based TeamHealth of systematically overcharging ER patients for minor medical needs.

The lawsuit includes examples of “upcoding” from New York to Texas and charging exorbitant fees to patients who had back pain, strep throat, or an earache – fees that are typically billed for complex ER visits.

Neither the government nor health plans have had much success proving that ER charges are intentionally padded. Enter UnitedHealthcare. The health insurance provider independently reviewed 47,000 claims and found that, for roughly 75% of the charges at the highest level, there was no reasonable justification in the medical records, and the rate of charges at the highest billing code is far higher than other providers, according to the lawsuit. TeamHealth executives and the company’s owners are blamed, not physicians providing the care.

The lawsuit states that, “Notably, no emergency room physician ever saw a dime of this extra revenue…TeamHealth pays physicians a flat hourly rate, and retains all of the revenue above costs generated by TeamHealth-affiliated medical groups. TeamHealth’s inequitable conduct served only to line the pockets of TeamHealth executives and their private equity backers.”
TeamHealth CEO countered by calling the lawsuit “frivolous” and accuses UnitedHealthcare of profiting through “down coding claims and refusing to consider the expertise of frontline clinicians who make a diagnosis.”

Here are a few facts, according to CNBC:

• Americans are being overcharged by more than $3 billion a year for ER services, according to data from Johns Hopkins School of Medicine.
• Bills can be nearly 13 times the rates paid by Medicare for the same services.
• Americans in the Southeast and Midwest, and poor and minority patients, are the most exploited by emergency-room billing practices, especially at for-profit hospitals.