Coping with crushing medical bills

Dear reader, 

Seven of 10 patients live in fear of medical bills they can’t afford and get by surprise, a recent survey found. Patients said they worry about such charges more than they do about putting food on the table or keeping a roof over their heads. And 4 in 10 said they experienced this nightmare because they were hit with a big, unexpected medical expense in the last year.

Bills of any kind can be displeasing. But medical bills have a special capacity to outrage.

Doctors, hospitals, and insurers have made the process as confusing, paper-laden, and aggravating as possible with dubious practices like “surprise” and “balance billings.” They put us under financial stress when we or our loved ones already are sick, injured, and vulnerable. They almost seem designed to cause the greatest grief for those with the most severe injury and grave and chronic illness.

Don’t roll over. Resist!  Negotiations can be beneficial to your care and finances.

And in this issue of our newsletter, we tell you how to do it. *

The mess with medical bills grows by the day

Medical bills weren’t always as staggering as they are now. That $80.75 bill shown above from 1951 covered six days of maternity care for my mother and five days for me in a newborn nursery in Lawrence, Kansas. (Yes, this is my very own birthing bill, discovered recently when we were moving my mom out of our family home to assisted living.)

Punch that $80.75 number into an online calculator that adjusts for inflation and cost of living, and, that delivery bill in 2019 terms would equal $783.02.

As you will likely guess, families now pay a LOT more for childbirth, even though they spend a lot less time in the hospital than my mother and I did.

A 2013 study found that the average total charged for pregnancy and newborn care was $30,000 for a vaginal delivery and $50,000 for a C-section, with commercial insurers paying an average of $18,329 and $27,866, the New York Times reported. Women with insurance pay out of pocket an average of $3,400, as compared with two decades ago, when they typically were billed nothing other than a small fee if they opted for a private hospital room or television.

Further, patients — no matter who they may be — now get slapped with inexplicable costs even in a relatively routine delivery, a medical service so basic that most of us would expect doctors and hospitals to have the billing down pat.

Consider what happened to two Ph. D.s at the RAND Corporation in Santa Monica, Calif. The women, roughly the same age and in good health, are expert health policy researchers. They put their savvy to work, studying where they could get the best care, best deal, and most pleasant experience when giving birth to their first kids. They chose the same hospital, had the same insurance, and neither had a complicated delivery. Both had epidurals. So why did just one mom get socked with a $1,600 surprise anesthesia bill?

The RAND expert didn’t pay that charge. She negotiated it away. Translation: She girded herself for aggravation and fought the doctor, hospital, and insurer. She won. She and her colleague also wrote up the experience in a well-respected journal read by many in the health care field. Her story was picked up by network TV. It became yet another of the many widely reported cases that make us all ask: Isn’t there a better way?

With price elasticity, why not negotiate?

Elisabeth Rosenthal, who became a noted New York Times health policy reporter, began to get exasperated with medical venality early in her career while working as an emergency room doctor. She saw, for example, care delayed for a gowned patient while he called frantically from a gurney to a friend to find his credit card number, so the hospital knew he could pay for treatment.

Rosenthal wrote a best-seller, “An American Sickness: How Healthcare Became Big Business and How You Can Take It Back,” describing how medical profit-seeking interferes with the quality, safety, and cost of patients’ care. She now is editor-in-chief of the nonpartisan, independent Kaiser Health News service (KHN), which has published a bunch of news articles with National Public Radio, detailing medical billing outrages.

A key theme in this work is that patients may hold wrong ideas about modern medicine. When we’re hurt or sick, yes, we’re stuck. We must rely on our doctors, hospitals, and insurers. We need them to be our champions. We want to be grateful for the good they do for us and our loved ones. And there are compassionate, thoughtful, and excellent people in the field who try to meet and even exceed expectations.

At the same time, it is key for patients to grasp what it means that medicine has become a $3.6 trillion part of the U.S. economy, accounting for 18 percent or so of the gross domestic product. Health care not only is awash with cash, it is driven by it. Over-testing, over-diagnosing, and over-treatment add billions of dollars in wasteful spending in the U.S. health system and crush patients with costs. Medicine is in the midst of a boom, exerting huge social and political sway, if for no other reason that so many Americans are flocking to work in health care. The increased personnel aren’t focused on direct patient care alone, but also include platoons of profit-seeking, C-suite suits and armies of administrative and bill-collecting personnel, all adding a half-trillion-dollars in costs, half of which may be unneeded.

When it comes to pricing medical services, doctors, hospitals, and insurers have become untethered from reality, bashing patients with whatever costs the market will bear. In Wisconsin, experts conducted a detailed time and resource study on knee surgeries, one of the most often performed procedures nationwide. A hospital chain priced them at $50,000. But after a deep dive into their actual costs and improvements that could make them cheaper, executives of the chain negotiated with local businesses and insurers a far different cost for the surgery: $8,700.

As the pro-business Wall Street Journal reported of this gaping differential: “Competitive forces are out of whack in health care. Hospitals are often ignorant about their actual costs. Instead, they often increase prices to meet profit targets. Patients, especially those with insurance, often don’t know the price of a procedure and rarely shop around. This dynamic is a driving force in the explosion in health-care spending in the U.S.”

The Houston Chronicle looked at medical bills, reporting that: “[H]ealth policy experts say the final price [of treatment] is often less about the true cost of care and more about what an insurance company or other payer is willing to spend and what providers are willing to accept. If a patient is uninsured or out-of-network, they face a bigger chunk — if not all — of the initial sticker price.”

Patients may not know this, and it’s true that many doctors also are ignorant of the cost of specific medical care they provide every day: There’s huge elasticity in prices. And in the billing process, there can be a real person who may be persuaded to take a potentially bankrupting charge and reduce or eliminate it.

Negotiating or haggling may not work. Most of us are unaccustomed to even thinking about it with our medical care. Isn’t it a throwback to bartering in an open-air market over farm animals? But isn’t it also worth trying, especially with so many Americans living so near the financial edge? The U.S. Federal Reserve found that 4 in 10 Americans don’t have the cash on hand to cover a $400 emergency expense without borrowing or selling possessions.

Too many Americans are drowning in medical debt. As the Kaiser Family Foundation and the New York Times found in a major national survey, “A quarter (26 percent) of U.S. adults ages 18-64 say they or someone in their household had problems paying or an inability to pay medical bills in the past 12 months. Though certain groups are more likely than others to report such problems, the survey finds that people from all walks of life can and do experience difficulty paying medical bills.”

Even when patients have medical insurance — and notably if it comes from their workplace, where employers have off-loaded more of the rising coverage costs onto their staffs — their decision to take lower premiums but higher deductibles compounds their health care expense and billingproblems. They can’t afford out-of-pocket expenses they must pay before their coverage kicks in, so they’re skipping care they may need to the detriment of their health.

For patients, insurer ‘narrow networks’ expand medical billing nightmares

Rosenthal and her colleagues at KHN, as well as reporters at the online news site Vox, have chronicled how patients get socked in the face with big, unaffordable, and unexpected medical bills. For example, a middle-aged, seemingly healthy teacher had a heart attack, and his insurer paid $56,000 for his care. But the hospital insisted it was owed $108,951 more — the unpaid portion of his treatment’s cost, aka a balance billing. After a KHN news story on his financial battle was picked up by news outlets nationwide, the hospital settled for $332.39 while still defending its costs and collection practices.

Reporters also have written about:

• A $50,000 bill a Florida woman got for treatment of a cat bite, a shot that typically costs not more than $3,000;
• An $18,000 trauma care charge for a vacationing Korean couple whose baby fell off a hotel bed but was fine and just given a clean diaper and a warm bottle of milk;
• A $1,500 prescription to treat a case of toenail fungus;
• A $15,000 charge for four tiny surgical screws used in a foot surgery;
• And $8,500 for physical therapy for a minor hand injury.

When President Obama and his Democratic allies pushed through the Affordable Care Act almost a decade ago, they needed health insurer support. The firms found that to make Obamacare coverage happen  — which also would become standard for policies offered to most Americans through workplace health insurance — they needed to figure ways to keep their offerings affordable. In exchange for consumer benefits like nondiscrimination for preexisting conditions and no lifetime limits, insurers got to push customers into “narrow networks.” These are a small and defined set of doctors, labs, clinics, and hospitals covered under specific policies. They often exclude big-name institutions and large academic medical centers. Insurers could negotiate tough prices with providers in the narrow networks who also knew that insurers would send them steady business in exchange.

For patients, the shift created practical and financial hazards, including making them scour long lists to see which caregivers were “in network” and affordable because insurers would pay for them, and which were not. Different policies covered different MDs, specialists, labs, clinics, and hospitals. Insurers penalized patients with whopping uncovered costs for care outside networks. But how were they supposed to avoid it, especially when it hit them in dire circumstance?

Vox reporter Sarah Kliff has documented extensive problems with emergency rooms. Because ERs must be staffed and equipped for many urgent and varied medical responses, treatment they provide is expensive. Specialists going in and out of ERs may be in many insurer networks, and patients can’t quiz each about their status in various plans. This has caused surprise bills to burgeon in ERs, where many trauma specialists are feuding with colleagues and hospitals about their charges and participation in insurer networks.

They aren’t alone. Patients have howled about sizable, unexpected charges from doctors they may never see, like pathologists and anesthesiologists. Patients have little or no say when these experts provide services, and they can’t screen them for network status. Remember those RAND moms? An out-of-network, on-call anesthesiologist administered the expensive epidural the one Ph.D. received. As she pointed out, she was in no condition to discuss alternatives. There’s more: Patients have been staggered to learn that sky-high costs of emergency transport by ambulance, or by medical airlift services, all too often are uncovered.

The public outcry over surprise bills has been rising, with Consumer Reports and other advocacy groups leading the charge. Some state lawmakers have stepped up to deal with surprise medical bills, with Maryland, California, New York, and Florida curbing them and balance billing — practices that, in effect, seek payment twice (once from insurers and from patients). Texas is pushing ahead on a bill to address surprise billing, while Georgia just put a similar law into shaky status. The Commonwealth Fund has posted a guide to balance-billing laws in states, finding this a key component of surprise billing. Patients may wish to research whether their state’s laws can help them.

In Washington, the deeply divided Congress is scrambling to find a way for Democrats and Republicans to help constituents cope with surprise bills and balance billing. Partisans haven’t figured a way around a key hurdle: determining fair payment for out-of-network treatments. Republicans are wary, of course, of any government role in health care, and especially of federal officials involving themselves in medical pricing.

Consumer Reports, by the way, offers an online tool for patients to complain about and seek officials’ help with insurers and surprise medical bills (click here to see the drop-down menu option for the District of Columbia).

Patience and persistence can pay off

So, what can we do about  medical bills?

In promoting her book, Rosenthal has given many interviews that provide a template for fighting back. At the online information site Medium, she has posted a series, including how to save on medical bills  at the hospital and at the doctor’s office. The Wall Street Journal has posted a how-to guide on medical bills, as has Consumer Reports (click here). CR also has reported on which specialists to be wary of and how to battle their surprise bills (click here).

Patients don’t need more headaches with medical bills, but they need to deal them head-on because they’re won’t go away. Trying to duck or go silent on creditors is never a good idea. Keep talking with them.

Never hesitate to ask ahead of time what a test or therapy will cost. The American Medical Association may not be helpful for patients complaining about quality of care. But the group’s Code of Ethics calls on doctors to be candid and transparent with patients about difficult financial concerns. Local medical societies may be able to refer callers to mediation services for billing disputes.

Anyone who gives medical care also must provide patients with informed consent. This means they are told clearly and fully all the important facts they need to make an intelligent decision about what treatments to have, where to get them, and from whom. With medical costs troubling so many patients, they should be free to ask their doctors about safe and effective alternative treatments and drugs at lower cost. Patients also may wish to discuss with doctors, labs, and hospitals whether prices are negotiable, especially if paid in cash. Ask if the price goes down if you pay in advance.

Get a detailed breakdown of any medical bills. You may spot not only overcharges but also errors—unacceptable billings for tests and procedures you never received. This happens way too often.

Although the documents may be hard to even look at and filled with what looks like gobbledygook, you may wish to learn about billing codes they list, numbers that provide a summary of medical tests and procedures. Changing the codes affects your bill, possibly boosting what doctors, labs, and hospitals make. It also may prompt an insurer to cover more than expected by suggesting urgency or diagnoses that justify a more costly approach. You may require expertise here (described below).

Take a lesson from trained medical personnel who will campaign for you with insurers. They may be called on to use every ounce of their calm, patience, and rationality to dicker with less educated, minimum-wage clerks at insurers or hospitals over treatment approvals and bills. You may need to develop a detailed filing system to collect the voluminous back-and-forth statements flying among doctors, specialists, labs, clinics, and hospitals. Keep a careful record of your every contact about billing.

Don’t let the paper blizzard intimidate you. A onetime law firm partner on the West Coast, accustomed to big deals, withered when he got a seven-figure hopsital bill after his son was hit by a drunk driver, a colleague says. Yet the family’s ultimate cost for weeks of intensive care? Zero, all paid by insurance (after months of letters and phone calls).

Here’s something many patients won’t know: They seem to work in concert against you, but when it comes to money, there’s no love lost among doctors, labs, clinics, hospitals, and insurers. You may find a friendly supervisor at an insurer who tips you how to get an MD or lab to reduce or ax a cost, or maybe a doctor’s billing service that explains how coding can get a reluctant insurer to cough up more. Hospitals have jumped in with financial counselors to assist patients through minefields of paying for their care. Caveat emptor: Be sure you know who pays such counselors and that they avoid conflicts of interest.

If your injuries or illness are severe enough that you face a mountain of charges, you may wish to seek independent expertise to review and negotiate your bills for a fee or percentage of their total. You may wish to read articles on this option from Consumer Reports (click here), the online consumer site NerdWallet (click here), the online health consumer site Healthcare Bluebook (click here), or the health site Healthgrades (click here). Some outfits mentioned include:

• The Patient Advocate Foundation may offer resources to consider.
• The Alliance for Claims Assistance Professionals may be worth a look.
• The National Association of Healthcare Advocacy might be an option.
• Medliminal is one private firm that deals with medical billing issues.

With our lives, health, and finances at stake, we all need to keep close watch on what state and federal lawmakers accomplish in the near term about medical bills. Can they solve surprise and balance billing? Can they slim down the paper work, and get us simple, comprehensible bills without confusing lingo? Can we get transparent and rational prices for tests, treatments, and prescription drugs, as well as emergency care and transportation, and ancillary but vital services like lab work and anesthesia? Can labs, clinics, and hospitals get together with medical personnel so patients can check those infuriating lists and know that if a given place is in their insurer networks, all the providers there will be, too?

As patients, it’s clear our wish lists could go on and on — and the medical establishment has lots of work to do with us to make their practices saner and more acceptable. I, of course, hope you and yours stay so healthy and well that you keep far from doctors, hospitals, labs, and clinics, and woeful medical bills!

Hospital price lists public but confusing

Wouldn’t it be great if, even before any medical bills flew around, patients had a better way to know what tests and treatments might cost them?

That was the idea behind a long-awaited push to get hospitals to post online for public review their chargemasters —their long lists of prices for services they offer. Reform advocates said this would be a key first step in fostering greater transparency about medical costs and, in turn, medical bills.

Hospitals have complied with the chargemaster rule, grudgingly. The lists can be tough to find on complex institutional websites, and they raise as many questions as they might answer — and hospitals aren’t going out of their way to offer explanations.

You can try clicking here to access the chargemaster for hospitals in the Johns Hopkins system. Or maybe try clicking here for the “standard services price guide” for George Washington University Hospital — yes, to see that document you’ll need to check enough boxes you’ll wonder if you gave up your first-born in the process. How about clicking here for the chargemaster for a major Los Angeles academic medical center often dubbed the “hospital to the stars?”

Those list prices differ a lot, don’t they, especially for seemingly similar tests or procedures?

They also fail to show competitive discounts and other price reductions that hospitals may negotiate in private with insurers and key groups like big employers. Hospitals say they don’t provide uniform prices because of these and other variables, including the quantities and types of patients they treat: Are they sicker, richer, better or worse insured? Their Medicaid-Medicare patient mix might affect their volumes and rates, though they may adjust for this by charging more to those with private insurance.

For consumers, the confusion over hospital list prices may be too familiar. It’s reminiscent of the fog  surrounding prescription drug costs. Medication prices vary widely, depending on discounts, rebates, and other differences. Those are negotiated not only by doctors and hospitals but also by insurers and middlemen, aka prescription benefit managers who may work for not only insurance companies but also big corporations with many employees.

As for the cost of medical services and how insurers cover them, the discrepancies are great — larger than in most areas that experts study, the New York Times reported. Amanda Starc, an associate professor at the Kellogg School of Management at Northwestern, told reporter Margot Sanger-Katz, “It’s shocking. The variation in prices in health care is much greater than we see in other industries.”

Can savings plans ease that bill shock?

To ease the battering they may take with medical costs and bills, many consumers have turned to specialized savings plans that have specific requirements and benefits and fall under an alphabet of titles, notably the FSA (flexible spending account) and HSA (health saving account).

Grab your bills and your budget and cadge time with your human resources person, accountant, and financial adviser to see how these plans might benefit you, especially in compensation, taxes, and shock protection.

Because most Americans get health coverage through their jobs, they may have become familiar with FSAs. As the federal government summarizes these plans, they are:

“An arrangement through your employer that lets you pay for many out-of-pocket medical expenses with tax-free dollars. Allowed expenses include insurance copayments and deductibles, qualified prescription drugs, insulin, and medical devices. You decide how much to put in an FSA, up to a limit set by your employer. You aren’t taxed on this money. If money is left at the end of the year, the employer can offer one of two options (not both): You get 2.5 more months to spend the leftover money. You can carry over up to $500 to spend the next plan year.”

Why use an FSA? If you have predictable medical expenses uncovered by insurance, putting money in this account from salary, works as a sort of pay increase — money that you would spend anyway but don’t pay taxes on.

Your FSA dollars can’t pay for health insurance. But they can cover copayments, coinsurance, deductibles, prescription medications, and dental and vision care, according to the IRS. FSAs also can pay for birth control, blood-sugar and pregnancy tests, insulin, mental health care, and more.

Do remember that FSAs have a use-it-or-lose-it hitch. You need to know the rules and limits and be sure you figure well how much to put in them.

As for HSAs, they’re gaining more attention with the rise of high-deductible health insurance and the “gig economy” in which more Americans are contingent workers who get coverage on their own. To be clear, some employers offer HSAs, too, including to encourage workers to take on high-deductible health coverage. HSAs, as Uncle Sam describes them, are:

“A type of savings account that lets you set aside money on a pretax basis to pay for qualified medical expenses. By using untaxed dollars in a Health Savings Account to pay for deductibles, copayments, coinsurance, and some other expenses, you can lower your overall health care costs. An HSA can be used only if you have a High Deductible Health Plan — generally any health plan (including a Marketplace plan) with a deductible of at least $1,350 for an individual or $2,700 for a family. When you view plans in the Marketplace, you can see if they’re ‘HSA-eligible.’ “

Money in HSAs — unlike with FSAs — rolls over year-to-year, and account holders may have the option to invest it. HSAs can’t pay for health insurance premiums, but they can cover deductibles, copayments, coinsurance, vision and dental care, and other out-of-pocket medical costs. And the range of services that qualify is broad: You can use your HSA to pay for acupuncture, chiropractor services, or even traditional Chinese medicine. Everything you can use it for is outlined in IRS Publication 502.

HSA contribution limits, notably for older taxpayers, can be generous, and the benefits at tax time can be positive. Consumers interested in HSAs should consult closely with HR experts, and their accountants, and financial advisers to ensure that they qualify and to see how these plans best might benefit them.

Recent Health Care Blog Posts

Here are some recent posts on our patient safety blog that might interest you:

• When older Americans suffer major injury or illness, their loved ones may find themselves under the gun, making expensive and complex decisions about their care. They’re likely to be slammed, too, with stacks of paperwork from caregiving facilities. It’s tough stuff to take in — and it too often ask them to sign documents that will boot them from constitutional protections of the civil justice system and into the secretive, private system of forced arbitration.The U.S. Supreme Court—loaded with appointees from a business-friendly party—has backed “corporate controlled” arbitration systems in several rulings, further arming them with bans on class-action lawsuits. This has led to burgeoning injustices, cases in which “corporate wrongdoers … completely escape any legal accountability,” according to the Center for Justice & Democracy at New York Law School, Public Citizen, and the National Consumer Law Center. The groups have amassed representative cases showing how forced arbitration forecloses plaintiff’s pursuit of remedies from harms in the civil justice system, as the Constitution guarantees.
• Almost two decades after public health officials declared them eradicated from this nation’s children, measles infections have returned with a vengeance to the United States, rising to the highest level in almost two decades, with hundreds of cases in almost two dozen states, and the incidences climbing still.The outbreaks have been concentrated in New York, in Brooklyn in a religious community, and in Washington state. But authorities have taken aggressive steps, including quarantine orders for hundreds of students and staff on two big college campuses across town from each other (UCLA and Cal State, LA), to ensure that the disease is contained and does not spread in Los Angeles.
• After years of patient complaints about injuries and tens of thousands of lawsuits, the federal Food and Drug Administration yanked from the market a surgical mesh widely used to repair pelvic conditions in women.The agency has  been slow to act on transvaginal mesh, which has been in use since the 1970s, with surgeons increasing its use in the 1990s. That in turn created an avalanche of complaints from safety advocates and women patients, who said the implant and procedure caused pain, bleeding, and scarring. This was not the surgical innovation, they said, that was supposed to remedy the pelvic tissue collapse that can cause the bladder or reproductive organs to slip out of place, causing pain, constipation and urinary leakage.
• Uncle Sam has paid what critics have called long overdue attention to women’s breasts and how surgeons and diagnosticians treat them. In an angry and emotional public hearing, women ripped the federal Food and Drug Administration for lax oversight of implants that surgeons use to augment and reconstruct breasts, even as the agency proposed its first changes in 15 years to guidelines about mammograms for patients with dense breast tissue.
• Doctors, hospitals, and their malpractice insurers like to demonize lawsuits brought by injured patients, but these legal actions provide a powerful way to identify problem practitioners, and the medical profession should see this truth and use it to better police its own ranks. That’s one of the recommendations from medical-legal researchers at Stanford University, who examined more than a decade of 60,000 payments for malpractice claims against more than 50,000 doctors. They found a tiny slice of doctors rack up a disproportionate share of repeated malpractice claims. They describe these MDs as “frequent flyers,” a term familiar to the medical community because it often is applied to indigent and homeless patients who rack up big bills for repeated emergency room visits.

Sincerely,

Patrick Malone
Patrick Malone & Associates