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Here's the scenario: You've been hurt in a drunk driving accident. You're suffering from a broken leg and lacerations requiring immediate medical attention. The ambulance takes you to the nearest hospital. Before treatment commences, you or a family member must sign a form stating that you will pay the hospital bill without receiving even a rough estimate of that amount and certainly without having the time or opportunity to seek a second opinion.
So, how do you know whether the hospital will charge a fair price for services rendered?
That's exactly what a study published recently in JAMA Internal Medicine set out to discover. They studied more than 12,000 billing records from more than 2,700 hospitals nationwide. What they uncovered is disturbing, especially for patients heading to the nearest emergency room.
Basing their study on the allowable amount for Medicare services rendered, which is a predetermined amount that Medicare reimburses hospitals for specific procedures, JAMA found that many hospitals charge exorbitantly high marked-up prices for medical care. Specifically, emergency departments were found to charge up to 12.6 times the cost that Medicare allows for services. For example, if the Medicare allowable reimbursement amount to the hospital were $100, the hospital might charge the patient up to $1,260 for the service.
Emergency departments – where patients with life-threatening injuries arrive – were found to charge more for the same services than the internal medicine departments of the same hospital. And since there is no law requiring consistent pricing from hospital to hospital, each individual hospital sets its own prices.
Clearly, consumer and patient protections are needed in the hospital setting.
For a person covered by Medicare, such mark-ups wouldn't impact their final bill because the hospital has agreed to accept a set reimbursable amount. However, for those with an insurance plan besides Medicare who are taken to an out-of-network hospital or for people without insurance, this practice of excessive cost mark-up could mean hospital bills for more than 12 times the allowable Medicare cost of a procedure! Depending on the severity of the injuries sustained, such surprise medical bills could easily bankrupt a typical patient.
As a patient, it's critically important that you choose your hospital wisely, and know which local hospitals participate in your insurance provider's plan.
If you have been injured at work or through the negligence of another individual or entity, contact us at (804) 999-9999 or or use the form below to connect with our legal team. We will fight to get you the justice you deserve.