10 ways to avoid outrageous hospital overcharges
By Peter Davidson ? Bankrate.com

American hospitals are fleecing patients out of billions of dollars
annually, and experts say that while some of the overcharges are honest
errors, many are deliberate.
That's because hospital bills are next to impossible for consumers to
understand, which means hospitals can hide improper charges behind
mysterious medical terminology and baffling codes.
That's what Nora Johnson found when her 56-year-old husband, Bill,
underwent hip-replacement surgery in 1999. The cost of the operation was
$25,000.
Knowing that her family would have to pay a percentage of the costs, she
requested an itemized bill.
"What I got was five feet of single-spaced names and codes," recalls
Johnson. Written in "hospital-speak," some of it made sense, she says,
while some of it was absurd.
"Like the charge for newborn blood tests and a crib mobile. That stopped me
in my tracks," recalls Johnson. "As far as I know, my husband never had a
baby."
Johnson, from Caldwell, W.Va., was so shocked by the overcharges she became
a trained medical billing advocate. Today, she audits hospital bills for
consumers and for state employees in West Virginia.
"More than 90 percent of the hospital bills I've audited have gross
overcharges," says Johnson.
Estimates on hospital overcharges run up to $10 billion a year, with an
average of $1,300 per hospital stay. Other experts say overcharges make up
approximately 5 percent of hospital bills.
"I've seen $90 charged for a 70-cent I.V. How about $129 for a mucous
recovery system? That's a box of Kleenex," Johnson adds.
She's also seen charges for ordinary supplies, such as towels and sheets,
that should be included in the room charges.
Johnson says some overcharges are mistakes, but many are deliberate.
"Hospitals are huge moneymakers," she explains. "Their executives enjoy big
bonuses."
As a result, "Hospitals have become highly innovative when it comes to
billing, and ordinary citizens have no idea they're being ripped off," says
Johnson, who is affiliated with Salem, Va.-based Medical Billing Advocates
of America.
Experts baffled, too
But making sure that you are charged correctly can be a daunting task.
That's what Richard Clarke found out firsthand shortly after his father
died in 2000.
Despite the fact that he is a former hospital chief financial officer,
Clarke admits, sorting through the bills took him a year. In the end he
found $2,000 in errors.
That's because bills from just one hospital stay will come pouring in, and
they come from many providers: Your surgeon, anesthesiologist, pathologist,
labs, as well as the hospital.
If you've been victimized by erroneous hospital bills, we'd like to hear
about it. Send your letters to hospital overcharges.
Bill Mahon is executive director of the National Health Care Anti-Fraud
Association, a group of insurers and law enforcement officials in
Washington, D.C. He says patients are helpless to decipher their bills. As
a result, says Mahon, providers can slip in overcharges.
"The medical billing system is complicated and confusing," admits Rick H.
Wade, senior vice president of the American Hospital Association, which
represents most of the hospitals in the United States. On December 27,
2002, he told a Dateline NBC investigative team, "Trying to understand all
the code words and jargon can turn your brain into oatmeal."
And because health insurance plans have different contracts with differing
payment schedules, there is no single rate sheet you can consult.
Nevertheless, experts say reviewing your bill for overcharges is vital. For
one thing, if you are required to pay some of your hospital expenses,
either as a deductible or a co-payment, overcharges will come out of your
pocket.
What's more, most insurance plans have a cap, meaning, "Money siphoned off
by errors or fraud can chip away at your lifetime total," says Tom Brennan,
Blue Cross/Blue Shield's director of special investigations.
And your credit rating may be at risk too. "Hospitals have become very
aggressive about collecting money," says Nora Johnson.
And, according to a 1998 study of hospital billing procedures, they go to
extraordinary lengths to discourage patients from delving too deeply into
their bills. "Citizens are becoming more educated about hospital billing
and taking responsibility of ensuring that their charges are correct," said
the study's principal author, Dr. Kimberly Elsbach, of the University of
California, Davis. "Hospitals are countering that with their own efforts to
discourage people from becoming involved with challenges or audits because
it costs them a great deal of time and money."
And they waste no time turning accounts over to collection agencies or
filing liens. Some have even resorted to having overdue debtors arrested if
they don't show up in court.
Nevertheless, experts say you can take these steps to make sure that you're
not taken for a ride.
If your hospitalization isn't for an emergency, check your insurance policy
to find out just what it will cover and how much it will pay. Be sure to
carefully review the section on "exceptions and exclusions." It will tell
you what your plan will not cover.
Phone the hospital's billing department and ask them what you will be
charged for the room, and just what the room charges cover. If tissues
aren't included, for example, bring your own.
Ask your doctor to estimate your cost of treatment. Also, ask if you can
bring your regular prescriptions from home to avoid paying for medications
administered at the hospital.
Make sure that everyone who will be treating you -- the surgeon,
anesthesiologist, radiologist, pathologist, etc. -- participates in your
insurance plan.
If you can, keep your own log of tests, medications, and treatments. If you
are not able to, ask a friend or loved one to do it for you.
At some point you will receive an explanation of benefits (EOB) from your
insurance company (if you're on Medicare, you will receive a summary
notice). It will say, "This is not a bill." Don't toss it in the trash.
Examine it. It will tell you how much the hospital is charging, what your
insurance plan will cover, and what you will have to pay out of your own
pocket in deductibles and co-payments.
Never pay your bill before leaving the hospital -- even if you're told that
it's required.