Doctor bills

Effort to Decipher Hospital Prices Yields Key Finding: Don’t Try It at Home

Greg Greenfield Leave a comment

Although the No Surprise Act and Transparency in Coverage Rule have become the law of the land and consumers are technically protected, price transparency is still ridiculously complex.  For those hoping to anticipate the total cost of their medical procedures and compare prices among hospitals you still may want to enlist the assistance of a professional advocate.

By Bernard J. Wolfson – JULY 9, 2021

Sutter Health negotiates separate deals with numerous health plans, and its prices can vary by thousands of dollars for the same service, depending on your insurance.

A federal price transparency rule that took effect this year was supposed to give patients, employers and insurers a clearer picture of the true cost of hospital care. When the Trump administration unveiled the rule in 2019, Seema Verma, then chief of the Centers for Medicare & Medicaid Services, promised it would “upend the status quo to empower patients and put them first.”

Asking Never Hurts

A series of columns by Bernard J. Wolfson addressing the challenges consumers face in California’s health care landscape.

Send questions to bwolfson@kff.org.

I set out to test that statement by comparing prices in two major California hospital systems. I am sorry to report that, at least for now, that status quo — the tangled web that long has cloaked hospital pricing — is alive and well.

I have spent hours toggling among multiple spreadsheets, each containing thousands of numbers, in an effort to compare prices for 20 common outpatient procedures, such as colonoscopies, cataract surgeries, hernia repair and removal of breast lesions.

After three months of glazed eyes and headaches from banging my head against walls of numbers, I am throwing in the towel. It was a fool’s errand. My efforts ultimately yielded just one helpful piece of advice: Don’t try this at home.

I was most of the way to that realization when a conversation with Shawn Gremminger helped push me over the line.

“You are a health care reporter, I’m a health care lobbyist, and the fact that we can’t do this ourselves is an indictment of where things stand at this point,” said Gremminger, health policy director at the Purchaser Business Group on Health, which represents large employers who pay their employees’ medical bills directly and have a big stake in price transparency. “The subset of people who can do this is pretty small, and most of them work for hospitals.”

I heard similar comments from other veterans of the health care industry, even from the former managed-care executive who inspired the story.

He had come to me with a spreadsheet full of price info that appeared to show that a Kaiser Permanente hospital in the East Bay charged significantly higher prices for numerous procedures than a nearby hospital run by archcompetitor Sutter Health.Top of Form

Bottom of Form

That was a compelling assertion, since Sutter is widely viewed in California as the poster child for excessive prices. Nearly two years ago, Sutter settled a high-profile antitrust case that accused the hospital system of using its market dominance in Northern California to illegally drive up prices.

I knew from the outset it would be tricky to compare Kaiser and Sutter because, operationally, they are apples and oranges.

Sutter negotiates separate deals with numerous health plans, and its prices can vary by thousands of dollars for the same service, depending on your insurance. Kaiser’s hospitals are integrated with its insurance arm, which collects premiums — so, in effect, it is playing with house money. There is just one Kaiser health plan price for each medical service.

Still, the story seemed worth looking into. Those Sutter and Kaiser prices matter, because they are used to calculate how much patients pay out of their own pockets. And helping patients know what they’ll owe in advance is one of the goals of the transparency rule.

The federal rule requires hospitals to report prices for all the medical services they provide in huge spreadsheets that can be processed by computers.

It also obliges them to provide prices in a more “consumer-friendly” format for 300 so-called shoppable services, which are procedures that can be scheduled in advance. And it requires that they report the cost of any “ancillary services,” such as anesthesia, typically rendered in concert with those procedures. Of the 300 “shoppables,” 70 are specified by the government and the rest are chosen by each hospital.

Kaiser Permanente is both a provider and an insurer: Its hospitals are integrated with the insurance arm, which collects premiums — so, in effect, they are playing with house money.

Most of the 20 common medical procedures I attempted to compare were among those 70. But a few, from lists of top outpatient procedures provided by the Health Care Cost Institute, were not. I decided to use the more comprehensive, less friendly spreadsheets for my comparisons, since they contained all 20 of the procedures I’d chosen.

Each carried a five-digit medical code known as a CPT, a term trademarked by the American Medical Association that stands for “current procedural terminology.” The transparency rule requires hospitals to include billing codes, because they supposedly provide a basis for price comparison, or in the rule’s jargony language, “an adequate cross-walk between hospitals for their items and services.”

Much to my chagrin, I soon discovered they don’t provide an adequate crosswalk even within one hospital.

My first inkling of the insuperable complexity came when I noticed that Sutter’s Alta Bates Summit Medical Center in Oakland listed the same outpatient procedure with the same CPT code three times, thousands of rows apart, with entirely different prices. CPT 64483 is the designated code for injection of anesthetics or steroids into a spinal nerve root with the use of imaging, which relieves pain in the lower back, legs and feet caused by sciatica or herniated discs. The spreadsheet showed a maximum negotiated price of $1,912 in row 12,718, $3,650.85 in row 19,014 and $5,475.80 in row 19,559 (let your eyes glaze over for just a few seconds, so you know what it feels like). The reason for the triple listing is tied to Medicare billing guidelines, Sutter later told me. I’ll spare you the details.

My head really began to hurt when I decided to double-check some of the prices I had pulled from the big spreadsheets against the same items on the shorter shoppables sheets. Kaiser’s prices were generally consistent across the two, but for Alta Bates, there were large discrepancies.

The highest negotiated price for removing a breast lesion, for example, was $6,156 on the big sheet and $23,069 on the shorter one. The difference seems largely attributable to the estimated cost of additional services, some rather nonspecific, that Sutter lists on the smaller sheet as accompaniments to the procedure: anesthesia, EKG/ECG, imaging, laboratory, perioperative, pharmacy and supplies.

But why not include them in both spreadsheets? And what do the two dramatically divergent prices actually encompass?

“How many bills they really represent and what they mean is difficult to interpret,” said Dr. Merrit Quarum, CEO of Portland, Oregon-based WellRithms, which helps employers negotiate fair prices with hospitals. “It depends on the timing, it depends on the context, which you don’t know.”

In some cases, Sutter said, its shoppables spreadsheets show charges not only for ancillary services typically rendered on the day of the procedure, but also for related procedures that may precede or follow it by days or weeks.

The listings for Kaiser’s ancillary services do not always match Sutter’s, which further clouds the comparison. The problematic fact of the matter is that hospitals performing the same procedures bundle their bills differently, use different medications, estimate varying amounts of time in the operating room, and utilize more or less advanced technology. And physician charges are not even included in the posted prices, at least in California.

All of which makes it almost impossible for mere mortals to anticipate the total cost of their medical procedures, let alone compare prices among hospitals. Even if they could, it might be of limited value, since independent imaging centers and surgery centers, which are increasingly common — and generally less expensive — aren’t required to report their prices.

The bottom line, I’m afraid, is that despite my efforts I don’t have anything particularly insightful to reveal about how Kaiser’s prices compare with Sutter’s. The prices I examined were as transparent to me as hieroglyphics, and I’m pretty sure that hospital executives — who unsuccessfully sued to stop implementation of the price transparency rule — are not losing any sleep over that fact.

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

Bernard J. Wolfson: bwolfson@kff.org, @bjwolfson

Read More

Health Law Pricing and the Exchanges

admin

Implementation of several of the largest changes for Health Care Reform will take place in 2014. One major step is the creation of the Health Care Exchanges that will enable consumers to buy insurance directly, with or without employer sponsorship. As insurers and providers prepare their offerings for the exchanges, one goal is to offering lower cost options for consumers. A manifestation of this drive is the emergence of “Narrow Networks”. Providers are offering discounts to be part of a narrower group of providers that insured members can use to remain in network. Providers are expecting that they will get more volume for the lower price. These narrow networks will limit the choices consumers have and may add to additional out of pocket costs if they choose to go outside of the networks. Read on and Hold on, the changes are just beginning.

Health Law Pricing Begins to Take Shape.

Wall Street Journal – By ANNA WILDE MATHEWS and JON KAMP

Hospitals and health insurers are locking horns over how much health-care providers will get paid under new insurance plans that will be sold as the federal health law is rolled out.

The results will play a major role in determining how much insurers will ultimately charge consumers for these policies, which will be offered to individuals through so-called exchanges in each state.

The upshot: Many plans sold on the exchanges will include smaller choices of health-care providers in an effort to bring down premiums.

To keep costs low, the insurers are pressing for hospitals to grant discounts from the rates hospitals usually get in commercial plans. In return, participating hospitals would be part of smaller networks of providers. Hospitals will be paid less by the insurer, but will likely get more patients because those people will have fewer choices. The bet is that many consumers will be willing to accept these narrower networks because it will help keep premiums down.

Tenet Healthcare Corp., one of the biggest U.S. hospital operators with 49 hospitals, Tuesday said it had signed three contracts for exchange plans that would involve either narrow or “tiered” networks, in which people pay more to go to health-care providers that aren’t in the top tier.

Tenet said that in exchange for favorable status in these plans, it granted discounts of less than 10% to the three insurers, which it said were Blue Cross & Blue Shield plans covering 15 of its hospitals, or around 30%.

“It makes strategic sense for us,” said Trevor Fetter, Tenet’s CEO, in an interview. “There will be a market here, and it’s important for us, we believe, to participate in that market.” He said that insurers around the country have approached Tenet to discuss similar plan designs.

Analysts said Tenet’s disclosures, which came during an earnings call with analysts, are the most explicit from any hospital chain so far about how the negotiations are shaping up. “It’s the clearest statement they’ve gotten about exchange products, pricing and impact,” said Sheryl Skolnick, an analyst with CRT Capital Group LLC.

Exchange plans will take effect in 2014. In that first year, health plans sold on the exchanges could have 11 million to 13 million enrollees and generate $50 billion to $60 billion in premium revenue, according to an estimate from PwC’s Health Research Institute, an arm of PricewaterhouseCoopers LLP.

Stonegate Advisors LLC, a research firm that works for health insurers, has been testing clients’ plans with consumers in a mock-up version of an exchange, which is an online insurance marketplace. Marc Pierce, the firm’s president, says nearly all the products have included limited provider networks.

The tests have found that premiums are the most important factor in consumers’ choices, he said, with more than half typically opting for a narrow-network product if it cost them at least 10% less than an equivalent with broader choice.

Florida Blue, the Blue Cross & Blue Shield plan in the state, will offer plans with a “tighter, more select group of providers” in its exchange, said Chief Executive Patrick J. Geraghty in an interview. “We believe the exchange is going to be driven by price, and therefore we’re looking for a lower-price option.”

The insurer has already struck deals for narrow-network plans and will use those same terms for the exchange versions, it said. Florida Blue said it has been winning discounts of 5% to 10% off typical commercial rates from hospital systems, but getting breaks as high as 20% in some cases.

Plans with smaller choices of health-care providers are a big focus for insurers, partly because many other aspects of exchange plans, including benefits and out-of-pocket charges that consumers pay, are largely prescribed by the law, giving them few levers to push to reduce premiums.

(more…)

Read More

Tallying the Cost to Bring Baby Home

Doug

Another informative article from the Wall Street Journal about the lack of pricing transparency and how difficult it is for consumers to get an estimate of charges, understand the cost, and their portion of the payment.

By ANNA WILDE MATHEWS

Bringing my newborn son home was a joy. Figuring out the hospital bill wasn’t.

Cedars-Sinai Medical Center in Los Angeles provided excellent care and thoughtful treatment during my uncomplicated traditional delivery in December. Then the invoices started coming. The hospital sent one for me, and another for my baby. The doctors billed separately. The total charge for three days: $36,625.

People lucky enough to have good health insurance, including me, don’t have to come up with such sums. Insurers typically pay a lower, negotiated price for hospital care, and patients pay a portion of that amount. Even people without insurance often get sharp discounts from list prices on their hospital bills.

Still, consumers have a big financial stake in the cost of care. People who get health insurance through their workplaces have been paying higher premiums in recent years, and more people have been enrolling in plans that include very high deductibles. A recent survey by the International Foundation of Employee Benefit Plans found that two-thirds of employers are increasing, or considering an increase in, workers’ deductibles, co-insurance and co-payments.

It’s important for patients to get good information about what they have to pay and why. That’s not easy. Before my son was born, it was difficult to figure out what I was going to owe. And I struggled after the birth to learn whether the amounts I was told to pay were appropriate. I could have done a better job at calculating some of my costs. But often, information wasn’t available, or was hard to decipher.

My own health plan is a so-called PPO, or preferred-provider organization, which means I pay less when I use doctors and hospitals that have contracts with Aetna Inc., the insurer that administers my employer’s coverage. For hospital and surgery services from these providers, I am on the hook for 15% of Aetna’s negotiated price. I also have a $400 annual deductible. Fortunately, there is a $2,000 cap on how much I might have to spend out of pocket each year for my in-network care.

From the Wallet

    Having a Baby? How to Prepare for the Hospital Bill

My research started before my due date, with a call to Aetna. I asked the customer-service representative how much the birth would cost me, and she didn’t answer the question directly. She did confirm that Cedars-Sinai was in my network. Aetna’s Web site offered typical maternity costs for other Los Angeles-area hospitals, but there was no such listing for Cedars-Sinai.

The Aetna representative did say that I had $1,370 remaining before I reached my out-of-pocket maximum for the year. So I decided to set aside $1,370 toward maternity costs, and hoped that I’d have some of that left over for a crib.

It didn’t turn out that way. In fact, I owed a total of $2,118.90, a sum I arrived at only after adding figures from five separate documents. Why the difference? Along with dark hair and blue eyes, my son was born with his own $400 deductible. Also, the maximum annual out-of-pocket charge for the two of us was $4,000, double what mine alone had been. I should have re-read the fine print of my plan.

Before paying the bills, I wanted to double check them to make sure I’d actually received the services I was billed for. At my request, Cedars-Sinai sent itemized invoices, with 14 items listed for my baby and 34 items for me, not including doctors’ fees.

Those charges I could decipher seemed stunningly high. A “Tray, Anes Epidural” cost $530.29. (After inquiring, I learned this was the tray of sterile equipment used to give me an epidural anesthetic injection.) An “Anes-cat 1-basic Outlying Area” was billed at $2,152.55. (I was told this was the cost of the hospital’s resources related to the epidural.) These items were in addition to the separate anesthesiologist’s charge of $1,530 for giving the epidural. Even though the pain-killing epidural shot felt priceless during my 20 hours of labor, I was amazed that its total cost could run so high.

To decipher other items, I decided to check out consumer services that advise people about medical bills. Candy Butcher, chief executive of Medical Billing Advocates of America, wondered why the hospital listed a price of $2,382.92 for my recovery, when I hadn’t had a Caesarean section. It turned out the charge was for the 90 minutes I spent in the birthing room after my delivery. I recalled lying exhausted there while a kind nurse checked my vitals and cleaned me up. Important help, for sure, but was it really worth that much money?

(more…)

Read More

Bargaining Down the Medical Bills

Doug

Below is a recent New York Times article suggesting that consumers take responsibility for lowering the cost of their health care bills.  Most consumers find it difficult to negotiate with health care providers because they don’t have the experience or don’t feel comfortable discussing finances with their physician.  We recommend using experts like Medical Cost Advocate, which leverage health care market data and use experienced negotiators to reduce consumers medical bills.

 

 By LESLEY ALDERMAN

 

When money is tight, everything is negotiable — including your health care bills.

 

As the economy sheds jobs and more people lose their health insurance or are forced to switch to less generous plans, doctors and hospitals are becoming accustomed to patients who are struggling financially. According to the American Hospital Association, half of their members reported an increase in the number of patients needing help with their bills. And that was in November, before the national unemployment rate hit 8.1 percent.

 

“It’s rough out there,” said Dr. Jacques Moritz, the director of gynecology at St. Luke’s-Roosevelt Hospital Center in New York, who also has a private practice in Manhattan. (Full disclosure: He delivered my son five years ago, but my insurance at the time covered me in full.)

 

Lately, Dr. Moritz said, “The first thing I say to my long-term patients is, ‘Do you still have a job?’ ” If patients say no, or otherwise indicate that paying will not be easy, Dr. Moritz says he assures them that bills are negotiable.

 

And keep in mind that doctors, hospitals and medical labs are accustomed to negotiating. After all, they do it all the time with insurers. A hospital may have a dozen or more rates for one procedure, depending on whether Medicare, Medicaid or a private insurer is paying the bill, said Ruth Levin, corporate senior vice president for managed care of Continuum Health Partners, a nonprofit hospital system in New York. Your request for a special arrangement will hardly confound their accounting department.

 

And it is usually in everyone’s interest to avoid dealing with a bill collector.

 

If you recently lost your insurance or have a plan with minimal benefits, here is what you need to know if you want to seek a price break from the doctor, hospital or lab.

  (more…)

Read More

For Uninsured Young Adults, Do-It-Yourself Health Care

Doug

This is an excellent article in the New York Times about young people who avoid purchasing health insurance because their age makes them feel invulnerable or because health insurance policies are too expensive.  While there are clinics set up to handle routine care for the uninsured, if an uninsured individual needs treatment for a major illness it will likely cost them a large amount of money.  Medical Cost Advocate can achieve significant savings for uninsured families by professionally negotiating their bills.

The New York Times, By Cara Buckley

They borrow leftover prescription drugs from friends, attempt to self-diagnose ailments online, stretch their diabetes and asthma medicines for as long as possible and set their own broken bones. When emergencies strike, they rarely can afford the bills that follow.

“My first reaction was to start laughing — I just kept saying, ‘No way, no way,’ ” Alanna Boyd, a 28-year-old receptionist, recalled of the $17,398 — including $13 for the use of a television — that she was charged after spending 46 hours in October at Beth Israel Medical Center in Manhattan with diverticulitis, a digestive illness. “I could have gone to a major university for a year. Instead, I went to the hospital for two days.”

In the parlance of the health care industry, Ms. Boyd, whose case remains unresolved, is among the “young invincibles” — people in their 20s who shun insurance either because their age makes them feel invulnerable or because expensive policies are out of reach. Young adults are the nation’s largest group of uninsured — there were 13.2 million of them nationally in 2007, or 29 percent, according to the latest figures from the Commonwealth Fund, a nonprofit research group in New York.

Gov. David A. Paterson of New York has proposed allowing parents to claim these young adults as dependents for insurance purposes up to age 29, as more than two dozen other states have done in the past decade. Community Catalyst, a Boston-based health care consumer advocacy group, released a report this month urging states to ease eligibility requirements to allow adult children access to their parents’ coverage.

“There’s a big sense of urgency,” said Susan Sherry, the deputy director of Community Catalyst. She described uninsured young adults as especially vulnerable. “People are losing their jobs, and a lot of jobs don’t carry health insurance. They’re new to the work force, they’ve been covered under their parents or school plans, and then they drop off the cliff.”

If Governor Paterson’s proposal is approved, an estimated 80,000 of the 775,000 uninsured young adults across New York Statewould be covered under their parents’ insurance plans. That would leave hundreds of thousands to continue relying on a scattershot network of improvised and often haphazard health care remedies.

In dozens of interviews around the city, these so-called young invincibles described the challenge of living in a high-priced city on low-paying jobs, where staying healthy is one part scavenger hunt and one part balancing act, with high stakes and no safety net.

“For a lot of people, it’s a choice between being able to survive in New York and getting health insurance,” said Hogan Gorman, an actress who was hit by a car five years ago and chronicled her misadventures in “Hot Cripple,” a one-woman show that was a hit at last summer’s Fringe Festival. “There was no way that I could pay my rent, buy insurance and eat.”

 

(more…)

Read More

A Healthcare System Out of Balance

J Roberts

Why is the price of healthcare for the same procedure dramatically different from one hospital to the next? Why aren’t American’s aware of this? To find out more read the article from The Boston Globe about difference in pricing at Massachusetts Hospitals.

As his patient lies waiting in an adjacent exam room, Dr. James D. Alderman watches while an assistant reaches into a white envelope and pulls out a piece of paper that will determine where the man will be treated. Big money is on the line. of Massachusetts and Harvard Pilgrim Health Care. The gap is even more striking for many individual procedures, which can be two or three times more expensive in one hospital than in another.data shows, but now the escalating prices that hospitals and doctors charge is far more important. A recent Massachusetts study concludes that the price of inpatient care at hospitals is rising by 10 percent a year, while overall use of hospital beds is declining. obtained by the Spotlight Team. The health official who provided the information asked not to be identified for fear of professional retaliation. Though Partners’ rates are not the highest – that would be Children’s – Partners has more effect on statewide costs because its revenue is five times larger.’We were willing to take the risk of challenging payers,’ said Partners chief financial officer Peter Markell, adding that Partners should not have to apologize for a successful strategy. ‘If you are never willing to challenge them, of course they are going to jam it down your throat.’That willingness to get tough turned Partners’ main insurance contracts from money losers a decade ago to the company’s largest source of profit, Partners officials say. Extrapolating from Partners’ internal tally of its insurance revenues, the Brigham and Mass. General receive at least $500 million a year more from the three biggest insurers than if they were paid at the lower rates typical of their rivals. Likewise, Partners’ 6,000 physicians are paid 15 percent to 40 percent more than most other Massachusetts doctors, based on Blue Cross rates, while the company’s community hospitals earn at least 10 percent more than their peers., Tufts, and Harvard Pilgrim. officials discount Partners’ role, while Baker at Harvard Pilgrim says there is a meaningful but hard-to-measure ‘Partners effect’ on statewide insurance costs. And Partners officials themselves have said in the past that their goal was to ‘reset the prices’ paid to hospitals even if it drives up insurance premiums.rates obtained by the Globe.’Shouldn’t there be some correlation between what you get paid for doing something and the quality of what you do?’ asked Beth Israel chief executive Paul Levy last month in remarks at the Massachusetts Medical Society.; the two closely track. The Blue Cross data show that about 10 hospitals – four Boston teaching hospitals and six community hospitals – are paid at least 30 percent above the state average, while 12 hospitals make at least 20 percent below average, including Cambridge Hospital, which earns about half as much per procedure as the Brigham and Mass. General.

Alderman, an interventional cardiologist, plans to open the patient’s clogged coronary artery by inserting a flexible tube with a tiny balloon at the tip. Usually he does the procedure, called angioplasty, at MetroWest Medical Center in Framingham. But he sometimes operates in Boston as part of a research program. One time of every four, by the luck of the draw, Alderman and his patient go to a big teaching hospital in the city.

If the white slip of paper directs him to do the procedure in Framingham, the insurance company will pay the hospital about $17,000, not counting the physician’s fee. If Alderman is sent to Brigham and Women’s Hospital in Boston, that hospital will get about $24,500 – 44 percent more – even though the patient’s care will be the same in both places.’It’s the exact same doctor doing the procedure,’ said Andrei Soran, MetroWest’s chief executive. ‘But the cost? It’s unjustifiably higher.’Call it the best-kept secret in Massachusetts medicine: Health insurance companies pay a handful of hospitals far more for the same work even when there is no evidence that the higher-priced care produces healthier patients. In fact, sometimes the opposite is true: Massachusetts General Hospital, for example, earns 15 percent more than Beth Israel Deaconess Medical Center for treating heart-failure patients even though government figures show that Beth Israel has for years reported lower patient death rates.

Private insurance data obtained by the Globe’s Spotlight Team show that the Brigham, Mass. General, Children’s Hospital, and a few others are, on average, paid about 15 percent to 60 percent more than their rivals by insurance companies such as Blue Cross Blue Shield

This payment pattern has become a driving force in the state’s galloping healthcare costs, and it raises hard questions about why certain hospitals and physicians receive premium pay for care that is no better than that of their competitors. Until now, the growing pay gap has not been subject to public scrutiny because contracts between insurers and hospitals typically include confidentiality agreements.

But an ongoing Spotlight Team investigation of healthcare in this state found scores of payment disparities for routine procedures in which there is no obvious difference in quality. Consider:

(more…)

Read More