Unconscious & Cost-Conscious: The Plight of an Uninsured Hospital Patient

Imagine a relaxing stroll in the park becoming a nightmare when a falling branch results in an emergency room visit. Even the most cost-conscious consumer — if it’s a patient who’s lost consciousness — has no control over which hospital the ambulance chooses.

Scenarios like this happen, and where the ambulance delivers you can result in dramatically different bills. For patients who have private insurance or are covered under public programs, there may be a buffer against high charges. For uninsured patients, they are left on their own to negotiate the price of their care.

A recent study found that there is enormous variation across hospitals in terms of what they charge. The study by Johns Hopkins Bloomberg School of Public Health generated headlines declaring that hospitals are charging the uninsured more than 10 times the cost of care. This report focuses attention on the fact that health care pricing lacks transparency. It compared what hospitals charge for a procedure to what Medicare – the federal health care program for elderly and disabled – would actually pay the hospital for the care. On average, hospitals charge nearly 3.5 times the Medicare rates.

The report found that the top 20 hospitals charge more than 10 times the Medicare rate. The Medicare rate is set by the federal government. And 49 of the 50 hospitals with the highest charges were for-profit hospitals. Half of them were owned by a single chain.

Many cry price-gouging, but the response from the for-profit hospital industry claims the study is an unfair assessment of hospital prices. They assert that charges are not a relevant measure of what consumers, insurers or government programs pay for services.

To be fair, what hospitals charge and what they expect patients to pay are generally two very different numbers. For patients covered by the other large public program, Medicaid (a federal/state program for low income individuals and families), the government sets the rates. Privately insured patients reap the benefit of discounts that their insurers are able to negotiate off of the initial charge.

So, does the sticker price really matter? Well, yes it does. Many claim that hospitals increase the rates charged to hike reimbursement from payers. For example, starting with higher rates in negotiations on insurance discounts can drive up even these discounted prices.

Who is likely to pay the highly inflated, sticker-price rate? To begin, patients with no insurance may be asked to pay the highest rates. Insured patients who seek care from an out-of-network provider may also end up paying the sticker price. Same, too, for patients covered by workers compensation insurance or automobile personal injury protection.

Both for-profit and nonprofit hospitals claim that few patients pay the sticker price. This may be true, but how would the average patient even know? For patients of nonprofit hospitals, this should be easy to assess. Obamacare included a provision that all nonprofit hospitals must have written financial (charity care) assistance policies that are to be posted on the hospital website. The policy should explain how the sticker rate is discounted for patients who qualify for assistance. One way to find these assistance policies is to do a search for charity care or financial assistance using the hospital website’s search function.

For patients at for-profit hospitals, it is not so simple. They are not subject to the same Obamacare rules since they do not get federal tax-exemptions. However, even for-profit hospitals claim to give breaks to uninsured patients – though the terms of those discounts can be rather opaque. And if you don’t know about these discounts, you may be billed the sticker price, be hounded for payment and have your credit ruined if the bill is sent to collection and reported to the credit bureaus.

What to Do If You Get a Big Bill

Here is some solid advice for anyone with a large hospital bill. First, contact the hospital and ask if it is a for-profit or nonprofit hospital.

If the hospital is a nonprofit, ask for a copy of their financial assistance policy. They are required under federal law to provide it to you. The policy should outline whether assistance is available to both insured and uninsured patients and explain how to apply.

If the hospital is a for-profit, ask them whether they have a financial assistance or charity care policy. If you are uninsured, ask about their uninsured discount policy. Ask them for a copy of their policy. Let them know if you need help with your bill, and apply for assistance. Just remember, the for-profit hospitals are not required to offer it — though many do.

A final note on the research: The industry claims that few patients pay the sticker price. If you feel that you are being charged an inflated rate for services, ask the hospital for an itemized bill that breaks out all discounts and assistance provided. And if you are still puzzled by the bill, look for a qualified health care consumer advocate to help you resolve it.

[Editor’s note: It’s important to check your credit reports regularly for accuracy and for your own information. You can see whether any medical debts are affecting your credit by getting your free annual credit reports from AnnualCreditReport.com, and you can get a free credit report summary from Credit.com every month to watch for important changes.]

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its affiliates.