A nationwide analysis of medical bills shows that hospitals typically charge uninsured emergency room patients four times what they’re willing to accept from Medicare for the same service, U.S. researchers say.
That’s more than double what those same hospitals charge for services performed in other parts of the hospital, the authors report in JAMA Internal Medicine.
The new study found, for example, that for a $100 treatment in the emergency room, some hospitals were charging patients up to $1,260.
“It points to the practice of price gouging by hospitals because patients often can’t pick their doctors in the emergency department,” lead author Dr. Tim Xu told Reuters Health in a telephone interview. “It’s a system that needs help.”
The extra cost is borne by people who don’t have health insurance and by insured patients who inadvertently - or out of necessity - get their treatment from doctors and hospitals that are not in an insurance company’s network of providers.
Even when a person is covered and insurance pays part of the bill, the patient may be responsible for paying the amount the insurance company considers unreasonable, a practice known as balance billing.
A few states, such as New York, ban the practice of issuing these “surprise medical bills.” They all should, said Xu, who did the study at the Johns Hopkins School of Medicine in Baltimore, Maryland.
“Unfortunately, only a handful of states have that kind of law. So patients really get struck in the crossfire and get these enormous bills that they really don’t expect,” he said.
Medical bills are the leading cause of bankruptcy in the U.S.
The study examined charges by 12,337 emergency medicine physicians and 57,607 internal medicine physicians based in the same 3,669 hospitals.
When the Xu team compared charges within the same hospital and what Medicare was willing to pay for them, they found that internal medicine services were typically charged at twice the Medicare allowance. But charges for services performed in the emergency room were typically 4.2 times higher, with some hospitals charging 12.6 times more.
Uninsured patients, or people treated outside their insurance company’s preferred network, were charged seven times the Medicare payment to repair a cut, six times more for interpreting an electrocardiogram to check heart function and 5.4 times more to insert an intravenous tube.
Those prices, they found, could vary widely. An uninsured patient could be expected to pay from 1.6 times more to as much as 27.7 times more to have an emergency department read a CT scan of the head.
When Medicare was paying $34 to read that electrocardiogram, hospitals typically charged patients $62 if it was read by an internal medicine physician and $96 if it was read by an emergency department physician.
People usually can’t plan for an emergency room visit “so hospitals take advantage of that. They’re more likely to set their prices higher,” Xu said.
Patients who ended up at a for-profit hospital faced the highest markup for getting emergency department services. They were charging, on average, 5.7 times what Medicare allowed.
Nationally, the markups were highest in the southeastern United States at 5.3-fold higher than the rest of the country, the researchers found.
Hospitals serving a large African American population or a large proportion of uninsured patients also charged more than average at five times the Medicare rate.
The group used 2013 price information collected through Medicare because “there’s not a lot of data out there about what hospitals charge. There’s a real lack of transparency,” Xu said.
What should consumers do?
“Some pay this amount even though it’s egregious, Xu said. “Patients need to know they do have rights in this case. Often if they negotiate with the hospital they can get a discount, but that’s not solving the problem. This practice can continue because there’s no law stopping them.”
A better solution, he said, would be to get states and the federal government to ban balance billing.
SOURCE: bit.ly/2s9ScyW JAMA Internal Medicine, online May 30, 2017.