You can now level the playing field when you get that exorbitant hospital bill.
Hospitals have a dirty little secret and this time I don’t mean that nasty MRSA infection they cultivate. This secret relates to charges for the uninsured patients or patients with insurance they do not accept, so-called non participating provider insureds. For these unwitting souls hospitals have a billing scheme using "master" charges, or retail rate charges, where they can essentially charge you whatever they want!
First, the context. Your son, being a kid, falls and hits his head while you are away on vacation. You rush him to the nearest emergency room and present your insurance card or credit card. They take it no problem. He gets an x-ray, is watched and turns out fine. Then two weeks later comes the bill: it is equal to 6 months mortgage payment for a 60 minute evaluation. Then comes the kicker: your insurance company only will pay for 1 month’s mortgage worth of medical care, what they call usual and customary charges. You, my friend, are left owing the balance of the retail rate. If you are unlucky enough to have no insurance you owe the full retail bill. The retail bill, by the way, is the one with the $40.00 Tylenols that you may or may not have been provided.
What to do? Fight. How? Well HMOs now have a remedy. A recent Florida Court ruling states that HMOs can pay what is a fair, market rate charge and there is no balance owed to the patient! The ruling is based on a Florida statute that applies to HMOs only. But, as for patients, the same analysis should apply. The hospitals do not post the rates or provide a patient a chance to price shop. Therefore, they cannot argue that the retail rate is the market rate. It is just a made up number to make the discount rate for participating insurers look good. Patients should fight by making the hospital justify the retail rate by a market analysis or by a cost justification. When they cannot the patient should refuse to pay more than the rate the hospital charges to participating insurers. After all, if they can make money (and they do) on the rates they charge participating insurers they should not get a windfall from the retail rate they charge just because a patient happens to be not insured. The hospital will do anything, including reducing the bill, to avoid having to justify publicly in court the bills they charge. Here is a hint, let’s make sure that the hospital executives’ salaries will be included and evaluated in determining the reasonable costs of care. Many will want their multimillion dollar compensation packages hidden from the evaluation of the cost of that Tylenol.
So fight back. Pay the market rate, not the retail rate, when you get your next hospital bill.