Earlier this week I read an article in the Los Angeles Times about fraudulent charges for anesthesiology services at the Sutter Health hospital chain in California, which drives home a point I’ve made before about the need for self-pay patients to pay close attention to their hospital bills.
A major California hospital chain, Sutter Health, agreed to pay $46 million and disclose more pricing information to consumers to resolve a whistle-blower complaint alleging false and misleading charges for anesthesia.
Sutter Health, which runs 24 acute-care hospitals in Northern California, said it reached the settlement Monday just prior to a trial starting this month over the allegations that it added thousands of dollars for “Code 37x” anesthesia charges that were already covered by other billing for the hospital operating room.
Nationwide, federal officials and consumer advocates have been putting pressure on hospitals to explain their high prices, while many employers have been demanding greater price transparency in an attempt to hold down costs.
I’m no stranger to the idea that businesses often settle these types of suits (this one was brought by the state Insurance Commissioner) simply to avoid further bad publicity or having their resources and focus drained in order to defend themselves from baseless allegations. And that is certainly what Sutter Health and the state hospital association claim is the case here:
Sutter didn’t admit to any wrongdoing as part of the settlement, and spokesman Bill Gleeson said it opted for the agreement to avoid spending significant resources contesting the allegations at trial.
“Sutter hospitals consistently followed appropriate regulations and protocols in billing for anesthesia services,” Gleeson said.
The state’s hospital trade group also defended Sutter and said its billing practices were in line with industry standards.
“Sutter Health’s method of billing for these services was, and still is, consistent with federal and state laws and regulations,” said C. Duane Dauner, chief executive of the California Hospital Assn.
But given the way hospital billing works, even following ‘appropriate regulations and protocols’ that are ‘consistent with federal and state laws and regulations’ is no guarantee that hospital patients are being billed honestly, particularly in the case of self-pay patients.
So-called ‘chargemaster’ prices typically inflate the bill for self-pay patients by three to five times what an insurer would pay, as I’ve written about numerous times.
And regardless of the prices, just figuring out what services are being charged for can be almost impossible to decipher. Last week I wrote about the experience of the D’Andrea family, who wound up getting hit with massive out-of-network charges when after daughter Sienna’s hospital treatment. Mrs. D’Andrea’s mother took charge of figuring out the medical bills, which was described by the New York Times this way:
Consumers would do well to follow the lead of Ms. D’Andrea’s mother, Livia Cooper. The couple relied on her to deconstruct and analyze the reams of invoices that arrived in their mailbox — including a collection notice — since they were busy caring for Sienna.
Ms. Cooper spent countless hours poring over the bills, trying to make sense of it all. “It was so overwhelming,” said Ms. Cooper, who had to close the women’s boutique she ran with Ms. D’Andrea so they could focus on Sienna, who is now 9 months old. “We received department bills and there could be 60 invoices on one printout. You would have a bill for $8,100 from one department or $6,500 from another department. It was hard to figure out what was covered, what wasn’t covered and what was balance-billed.”
And of course mistakes are common, as Michelle Katz has pointed out in a blog post on avoiding big bills from the emergency room:
Get a copy of your medical chart: This is legally yours and it will not only help you recall some of the finer details of the event, but it also might help uncover some of the mysterious charges on your bill. When Suzanne and I compared this with the itemized bill we uncovered the following: wrong dates, wrong times, wrong amounts, double charges, unnecessary tests and even a wrong diagnosis.
The best advice for self-pay patients when it comes to care provided by hospitals is probably to avoid hospitals altogether, if at all possible. Don’t get lab tests or imaging services like MRIs done at a hospital, go to independent surgery centers for outpatient procedures, and if you need to go to a hospital try to find one that will provide you with a ‘package’ price that includes all charges in a single fee, either in the U.S. or even overseas as a medical tourist.
You might also consider a medical bill negotiation service, which can often be used both before or after the treatment.
Large insurers have teams of auditors able to root out inaccurate or dishonest hospital charges. Self-pay patients only have themselves, at least until they decide to bring in some help. So pay close attention, question every line item, and know when you need to get help understanding what the charges are. It might be the difference between getting an honest bill and getting ripped off.