ER Bills and Hospital Overcharging: It’s Not Getting Any Better

Boston, MARegardless of the machinations undertaken by the Trump Administration to replace the so-called ‘Obama Care’ with something that may, or may not be superior the fact remains that health care costs continue to balloon, with hospital billings and emergency room charges chronically higher than rates set by Medicare. With such hospital overcharging going on, it’s little wonder patients seek justice with an ER bill lawsuit, or similar.

To that end, a study released this past May by researchers at Johns Hopkins School of Medicine paints a bleak picture of emergency room fees as compared against what such services are normally worth. For example, according to an in-depth report by CNBC (08/11/17), the emergency room cost when the bill finally reaches the consumer can be nearly 13 times the rate paid by Medicare for the exact same service.

Overall, according to the study, patients are being overcharged by more than $3 billion in emergency room charges.

And that’s each year.

The hospital overcharging study determined that certain services presented with a higher ‘markup’ than others, such as wound closures, identified as having a median markup ratio of 7.0 – but there are other examples, according to CNBC. Interpreting a CT scan on a patient’s head has been identified as having a price variation within hospitals of anywhere from a markup ratio of 1.6 above what Medicare would pay, up to 27.

There are other disturbing examples of ballooning emergency room costs. A physician review of an electrocardiogram is valued at $16 by Medicare – in other words, that’s what Medicare allows. However, some emergency rooms have charged up to $317 for the same service.

A big part of the difficulty for insured patients who are covered for services conducted within their specific network of approved providers are services performed by doctors and healthcare professionals from outside their network. Chatrooms are rife with stories from patients lamenting a huge bill from an out-of-network provider when the patient was convinced that services received were well within their covered network.

But the lines are further blurred, as revealed by a study conducted by researchers at Yale University. To that end, The New York Times (07/24/17) reported that some hospitals are outsourcing emergency room services to groups of doctors and / or for-profit organizations that are reported to aggressively hike ER charges and other emergency room fees.

Combined with the reality that many of these practitioners are outside of a patient’s approved and qualifying coverage network, emergency room fees can prove astronomical.

A survey conducted by the Kaiser Family Foundation last year determined that amongst insured adults struggling with high medical costs and ER bills, charges from out-of-network practitioners were a factor one-third of the time.

Jenifer Bosco, a staff attorney at the National Consumer Law Center in Boston, tells CNBC that “this is a huge problem. Consumers are being overcharged, sometimes exorbitantly.”

And the disconnect between in-network, and out-of-network service is already pervasive and becoming more so as doctors and other healthcare professionals band together to form collectives that offer services to various hospitals for the opportunity of additional billings.

And it can begin innocently enough, according to The New York Times. The venerable newspaper tells of a small hospital located about an hour north of Spokane, Washington. Newport Hospital and Health Services were having difficulty attracting doctors to its rural setting for potential work in its emergency room.

Thus, it contracted all, or part of its emergency room service to EmCare, an entity which specializes in emergency room staffing. That solves the problem of staffing shortfalls for the hospital, but in so doing creates a healthcare network problem for patients: while a hospital may be within an insured patient’s approved network for health services, the doctors staffing the emergency room may not. Nor, may they be inclined to identify themselves as being outside the patient’s network.

The New York Times tells the story of patient Debra Brown, who attended the emergency room of Sutter Coast Hospital in California, with a broken ankle. While most of her ER charges were paid by her insurer, Brown later received an emergency room bill from a doctor who, Brown alleges, did not identify himself as being outside of her network. Brown says the doctor “barely touched” her ankle. She soon received a bill for service with the portion she was responsible for valued at $500.

EmCare, identified in The New York Times as part of the publicly-traded Envision Healthcare, said in a statement that it felt the study paper produced by researchers at Yale, was flawed. And yet Fiona Scott Morton, a professor at the Yale School of Management and a co-author of the paper, described the strategy as a “kind of ambushing of patients.” A patient attending an emergency room can verify that the hospital will honor her insurance, but the patient rarely has an opportunity to choose the doctor who treats her.

Beyond the in-network / out-of-network debacle, is the appearance that emergency room services provided through outsourcing are more expensive, and billed at much higher rates. The New York Times reports that prior to the arrival of EmCare to Newport Hospital and Health Services, about six percent of visitors to the emergency room were given an ER bill that reflected the most complex – and the most expensive – levels of care. When Newport began outsourcing their ER room, the highest billing code was issued to patients 28 percent of the time.

In terms of dollars, a physician billing with the highest-level code at Newport sought a fee of $467. EmCare’s charge for the same service, The New York Times reports, was $1,649. While Newport had previously negotiated rates with numerous health insurers, EmCare physicians were not part of those networks and thus bill patients directly at a much higher rate.

EmCare, The New York Times reports, has been hired to outsource emergency rooms at hundreds of hospitals across the US. Part and parcel with that is a marked increase in emergency room bills.