Don't understand how medical billing works? You're not alone!
At Pratter.us, we feel your pain. We understand that an educated health care consumer is the best health care consumer. At Pratter.us, there is no need to be intimidated when you look at your medical bill. Just read below to understand the principles of medical cost and billing, including how to read and understand your Explanation of Benefits (EOB). We are here for you every step of the way.
Rules of thumb
It is important for you to understand that most often the hospital charge or ambulatory surgery center charge for a procedure is not what you will be financially responsible to pay. The hospital or surgery center charge for a medical service represents the ceiling charge, or alternatively worded, the highest price you could have to pay for that medical service. Higher medical charges do not result in better medical care but they do guarantee you just what you don’t want - higher medical bills.
If a lumbar spine MRI charge from one facility is $500 and from another facility is $4,000, there is considerable peace of mind and potentially significant financial savings by scheduling and getting your lumbar spine MRI from the $500 MRI facility.
Price discrimination is set to occur under four circumstances:
1) if the patient has no health insurance or
2) if the patient has a high deductible, such as $5,000 out-of-pocket before the insurance company kicks in any money for medical care, or
3) if the patient has a 20% or 40% co-insurance or
4) if the insurance company denies authorization and states that the medical service rendered is not covered.
By standard insurance contract law, the hospital or doctor is not permitted to go after you for the balance of a medical service not paid by the insurance company. The insurance payment is considered payment in full. For example, if a facility charged $4,000 for a lumbar spine MRI and you have health insurance, your health insurance company is typically a multi-billion dollar entity with heavy financial leverage and can negotiate with the MRI facility to have a $1,000 reimbursement for the MRI for its insured member to be considered payment in full. The MRI facility cannot bill the patient for the other $3,000 by insurance contract law. Nonetheless, the lower the total charge for an MRI by any MRI facility, the more likely you will have a lower out-of-pocket expense.
Pratter lists the total cost of an outpatient medical test or procedure whenever possible. All imaging and blood work costs listed represent total cost when possible. The cost could be broken down into a facility fee (what the hospital gets) and a radiologist fee (what the radiologist gets). At Pratter.us, we know the total cost is what matters most to you. Hospitals, surgery centers, MRI centers and lab centers will enter their total costs for procedures via our secure and authenticated portal and will guarantee those prices through the remainder of the calendar year.
For states that require the submission of all hospital charges, anesthesia fees are not considered for elective outpatient procedures nor are surgical supplies considered and packaged into a total cost. Hospital systems have failed to list these charges. Hospital systems also have almost universally failed to list the professional component fee (what the doctor charges) for all medical tests and procedures even when they employ the physicians and even when these charges are required to be submitted by state law.
Where possible, Pratter has combined the two most significant charges – the doctor charge and the facility charge. Combined, these two charges will give you a good idea where cost effective medical care can be found. Pratter also notes that the most expensive fees are assigned to the medical facilities, whether they be hospitals or surgery centers. Doctors receive and charge but a fraction of what these facilities do even when the physician performs the most significant amount of work.
For example, a screening colonoscopy will have a gastroenterology fee assigned a billing code 45378 for which there is a charge. If a colonoscopy is performed in an ambulatory surgery center, there is a surgery center fee based off the same billing code 45378. If the screening colonoscopy is performed in a hospital setting, there is a charge assigned with the billing code referred to as the hospital ambulatory payment classification (APC) charge with code 0143. There is also an anesthesia fee for sedation by units of time with a base code of 00810. Hospitals charge and receive more money than ambulatory surgery centers by our general medical experience here at Pratter, often in the order of 40% to 50% more than ambulatory surgery centers. Price compare for yourself, though, because you are not just a patient - you are a health care consumer.
Pratter.us is making it easy for all hospitals and ambulatory surgery centers to enter total costs via our hospital and surgery center portal. Our goal is to have an apples-to-apples comparison for all Americans and take the sticker shock out of purchasing medical care. We are working diligently behind the scenes to bring the most comprehensive and accurate medical pricing to you. We are doing our best to help you. Please help us create medical cost transparency by calling your local hospital and surgery center CEOs and urging them to place their medical costs on Pratter. You do have a voice in your health care costs! We thank you for your cooperation.
Explanation of Benefits (EOB)
If you have to dispute your medical bill with the hospital or if you just want to understand it before paying a large dollar figure, the hospital billing personnel will ask you if you have your EOB. Most of the time, they will refer to it as such instead of simply stating the words “explanation of benefits.” Please note the EOB example below in regard to a cervical spine MRI.
Insurance Carrier Hospital EOB
In this example, Latrobe Hospital charged the patient $1,796. BlueCross informed Latrobe Hospital and the patient that BlueCross paid Latrobe Hospital $948.90. This means that patient owed $847.10 for payment in total for the cervical spine MRI. This $847.10 is applied toward this patient’s annual high deductible of $5,200 per year. After an additional $189.90 is paid toward medical bills (see left hand pie chart on page two of EOB above), the patient will not have any more out-of-pocket medical expenses the rest of the insurance year as long as the medical services are both covered and in-network. Next, note the patient bill sent out by the hospital below. This Latrobe Hospital bill affirms the BlueCross EOB that $847.10 is due as patient payment in full for the cervical spine MRI. The hospital bill indicates that BlueCross paid the other $948.90.
Hospital Bill - $847.10 owed by patient
The above named patient also received an EOB from BlueCross for the radiologist interpretation of his MRI of $200 with a BlueCross negotiated discount of $117 rendering a radiologist bill of $83 total for the cervical spine MRI interpretation (below). Thus, this patient received an overwhelming four pieces of mail for one test – two EOBs from his health insurance carrier – one for the hospital and one for the radiologist, and two medical bills – one from the hospital for the test for $847.10 plus one from the radiologist for the test interpretation for $83 for a total out-of-pocket expense of $930.20 which is also applied toward his annual $5,200 high deductible.
Insurance Carrier Radiologist EOB
Radiology Bill - $83 owed by patient
Please realize that the medical facility charge really does matter. If medical facility A charges $1,000 for a cervical spine MRI and medical facility B charges $3,000 for a cervical spine MRI, rest assured that even after an insurance company discount, you will pay much more out-of-pocket for the medical facility B $3,000 cervical spine MRI. If you wish to use common sense and think that because you pay a health insurance company $15,000 a year for a family health policy and expect it to level the playing field for you so that a cervical spine MRI costs you the same at every medical facility in-network – think again. That logic and level of service does not exist. You should not receive medical care without knowing the cost of a test or procedure before you receive your medical care. Pratter is here to help you in that regard.