Healthcare Consumer Tips

America’s Healthcare Secret Pricing Scandal Exposed

For everyone who is literally sick and tired of being held ransom by a corrupt healthcare system where insurance companies, their lobbyists, hospital networks, and pharmaceutical

For everyone who is literally sick and tired of being held ransom by a corrupt healthcare system where insurance companies, their lobbyists, hospital networks, and pharmaceutical companies have had the upper hand by keeping us in the pricing dark, Pratter believes it is time for the unsustainability and unfairness of secret pricing and crippling “surprise” medical bills to stop.

This article exposes America’s secret pricing scandal like never before and how it is carefully and purposefully crafted. A review of several self-insured companies’ medical bills has led to the following conclusions. They call their pricing proprietary. We call it secret and unethical. Take your secretly priced anti-nausea medicine and keep reading.

The system is rigged against us when insurance company software is programmed to hide the hospital’s fee for service by removing the five digit CPT (Current Procedural Terminology) billing code if the NPI (National Provider Identification) is a hospital NPI number.  This bait and switch coding occurs every time a hospital NPI number is pinged per claim row. CFOs and benefit VPs cannot manage company money when the medical spend is not itemized.

Insurance companies also fail to provide self-insured employers all of their medical claims.  Both the gastroenterologist and the hospital must use the same CPT billing code and the same date of service for a colonoscopy. Often in the data sets analyzed, all of the doctor fees are provided yet none of the hospital fees are provided. The hospital fees are the big ones and are omitted from claims data sets when employers ask to review all of their claims.

Insurance companies do not provide NPI numbers on some employer medical claims data sets. The NPI number identifies the medical provider by name. If the insurance company provided the NPI number, it would permit the actual price of care for each medical item to be labeled by medical provider name, whether it is a hospital or a surgery center, for example. If not, the pricing remains secret.

Insurance companies, in some instances, claim that the bills that an employer pays are owned by the insurance company. Really?! Go to a grocery store run by an insurance company and they would tell you how much you owed, not let you see an itemized bill and expect you to pay the bill plus charge you an access fee to use that grocery store with wildly different pricing from the one down the street. Why do they do this? Answer: corporate America has let them to this point.

Health insurance companies refuse to provide the employer a copy of its bills, thereby, telling the employer to remain in violation of ERISA law for fiduciary responsibility of health benefits and to continue to irresponsibly write blank checks for medical care. Sadly, most companies continue to write such blank checks, ever so briefly making me want to be an insurance company.

Insurance companies create vast networks, referred to as PPOs (Preferred Provider Organizations). The only thing that is preferred is the deal the insurance company cuts itself.  About a full one third of the total medical spend by an employer can be eliminated by removing in-network pricing variation for commodity care alone.  

Employers need to realize that when they pay for PPO access, they are paying to access a network designed to maximize the insurance company’s revenue - not to save the employer money on medical care.  If a chest x-ray was priced identically at all 20 locations in-network, then all the money an employer pays to an insurance company might make sense. Twenty different prices at 20 different locations is the secret pricing scandal revealed.

With true medical cost transparency, meaning known charges and known claim allowables (fancy term for the real price paid for care) before the time of service, there would be no need and no value for a PPO.  PPOs will die because of this.

Hospitals have failed to provide a list of their charges for medical care as required by the ACA (Affordable Care Act), Section 2718.  This would be very easy to do, especially for outpatient commodity care. None of the 5,700 hospitals in the US have done so, because there is no fee, fine or jail time for a lack of compliance with this federal law.  There soon will be a few leaders here and thankfully.

Hospitals do not provide itemized medical bills. There is either a “pay this amount” or generic categories listed, eg blood work or cardiology service. In order to review an itemized medical bill, believe it or not, a health care consumer must ask for one. This is something no other industry does and something we should not tolerate. I recommend not paying any hospital medical bills until after someone from the collection department calls at which point an itemized bill is requested to review and compare to the insurance EOB (Explanation of Benefits).

The secret pricing scandal has left all self-insured employers in violation of ERISA law, as they cannot manage their healthcare fiduciary responsibility. If sued by their employees, perhaps they can point the finger at their carrier. It is a best-of-breed business practice to obtain, review and analyze all medical bills in order to meet ERISA fiduciary requirement for health benefits. CFOs also cannot manage what they cannot measure.

The solution to this corruptness lies within ethical self-insured companies who do not have any personnel bought off by health insurance companies or hospital systems. These employers own their medical bills that they paid. By providing them to Pratter, the actual costs of outpatient procedures that are otherwise not revealed at all, or cloaked in unhelpful and deceptive price ranges, are published and searchable by zip code. A detailed medical cost savings analysis is generated so that an employer, for the first time ever, knows its medical cost drivers by the name of each test. These high cost commodity items are itemized and targeted for savings.

About the Author

Bill Hennessey, MD, is the CEO of Pratter, a medical cost savings and transparency company. Having worked 25 years as an MD, and still owner of a physician billing company, Dr. Hennessey has been first line in the trenches to bring this one-of-a-kind reality. 

Pratter is the only healthcare service that empowers consumers and their self-insured employers with truly transparent ”know before you go" pricing for outpatient medical care.  Pratter is independent of all health insurance companies and partners with consulting benefit experts and independent third party administrators (TPAs).  Our passion is to fight for everyone to have affordable access to medical care.

Are You Paying for Health Care? Or Health Insurance?!

Think about it - does your home policy pay for a new coat of paint? Does your auto policy pay for an oil change or tire rotation? It's crystal clear that homeowner and auto

Think about it - does your home policy pay for a new coat of paint? Does your auto policy pay for an oil change or tire rotation? It's crystal clear that homeowner and auto insurance is to avoid a financial catastrophe and that we must pay for routine care out-of-pocket. Health care should be the same way.

We should pay for routine health care, such as blood work, imaging and some elective procedures. And we should know the exact price tag, just like we do for home and car parts and service.

Medical cost transparency for routine care, coupled with a catastrophic health insurance policy with a high deductible of $20K or more, would keep more hard-earned money in our pockets and yet avoid financial catastrophe. Lobbyists have prevented us from purchasing health insurance like auto and homeowners’ insurance. This broken, rigged system has blurred the line between care and insurance enhance profit margins.

Let's separate routine health care purchase from catastrophic health insurance coverage. Routine care can and is being itemized with price tags right here, right now, at pratter.us. Placing an insurance product around it makes a lot of common sense.

Cost is Not Related to Quality

High medical costs will get you only one thing – a high medical bill. In fact, there are many cases in which lower medical care costs get you better care. Two key notes

High medical costs will get you only one thing – a high medical bill. In fact, there are many cases in which lower medical care costs get you better care.

Two key notes about quality:

  1. In-network. There are plenty of good choices in-network and vetting of medical providers to include them in your network is meant to provide you reassurance as to their quality.
  2. Pratter focuses on routine care, such as blood work, imaging and surgery center procedures.

There is no quality issue to discuss for blood work and imaging studies since they do not even require a physician to be performed.

If you are seeking a high quality physician for an elective medical procedure, consider the following:

  1. Board certification.Verify that your doctor is board certified by one of the 24 medical specialties under the American Board of Medical Specialties (ABMS) umbrella at:http://www.certificationmatters.org
  2. Training locations.  This includes both medical school and residency program.  There are three ways to learn where a doctor has been trained with those that are American university-trained being most frequently held in high regard.
    Check the doctor’s website.
    Check the hospital’s website. Hospitals go to great length to verify a physician’s credentials before providing him or her with hospital privileges. This renders this technique trustworthy.
    Call the doctor’s office and ask.
  3. Volume. If a doctor performs too few or too many procedures, you may wish to go elsewhere.  While there is no magic number to consider, the answer to this will either add or subtract from your decision comfort level.  Call and ask this question also.
  4. Ask your doctor. Ask your doctor if he or she or a family member would or has gone to this doctor. And remember, hospital-employed physicians have to refer you to another hospital-employed physician if possible or else risk losing their jobs. Know that it’s your physical and financial health so you get to decide where you want to go.

Doctor Appointment Checklist

Here’s how to get the most time out of your doctor appointment. 1. Make a Tuesday, Wednesday or Thursday early morning appointment. There are plenty of valid reasons

Here’s how to get the most time out of your doctor appointment.

1. Make a Tuesday, Wednesday or Thursday early morning appointment. There are plenty of valid reasons doctors fall behind schedule by the end of the day but no so in the early morning.

2. Wear loose clothing that permits immediate examination of the symptomatic body part. 99% of the time, a patient who needs a thigh examined wears tight jeans. Shorts, short sleeve shirts and sweat pants are all great options. Otherwise, you are asking for a hospital gown and a few less minutes with the doctor to change clothes.

3. Typed list of medications with dosages. Bring it. This tells doctors your medical conditions and whether or not any other medication can be prescribed.

4. Chief complaint. State which body part, what makes symptom worse, what makes symptom better, how long it has been bothering you, and whether it is getting better, worse or staying the same over time. Know these answers ahead of time.

5. Imaging study. If you had one, bring a copy of it on a disc. If you are getting one, ask for a free copy on disc. Do not assume your doctor has access to 30 different electronic medical record systems to access the imaging study. Bring it.

6. Don’t BTW. “By the way, I have this and that and this and that” is a sure way to get your main problem ignored. Stay focused on your main concern. If you have a second or third medical issue to address, tell the medical staff about all of them when you make the appointment. No ambushes please.

7. Spouses, boyfriends, girlfriends and neighbors – let the patient answer the questions. Speak only if spoken to. Doctors aren't there to treat you that day.

8. Bring your co-pay. If you say you forgot it, doctors don’t believe you because you never forget your money when you buy alcohol, cigarettes and gas. Show your doctor this bit of respect if you want it in return.

9. Bring a pen and paper. Write down the important conclusions being recommended.

10. Don’t mention Google or television ads. Your doctor trained at better places. This distracts time from addressing your problem.

Don’t Pay an Unitemized Medical Bill

Do you write blank checks for anything else in your life? Then don’t do it for medical care. As consumers of health care, we deserve to know the cost of medical care before

Do you write blank checks for anything else in your life? Then don’t do it for medical care. As consumers of health care, we deserve to know the cost of medical care before we pay for it.

Many medical providers, especially hospitals, will send us medical bills with a total amount to be paid. The hospital does not provide us with the customer service we deserve – an itemized medical bill listing each medical care item line by line and telling us the cost of each item and what we owe for each item.

For example, a consumer who had four blood work test received a bill for $600. The consumer should have received a bill stating each blood test by name, such as complete blood cell count (CBC) with a cost of $75 and consumer responsibility of $25, for example, and repeat this process for the other three blood tests.

Hospitals have become accustomed to not providing an itemized bill unless the consumer asks for one. This is unacceptable and poor customer service. Pratter therefore recommends the following:

1. Do not pay an unitemized medical bill. This means don't pay a medical bill where you are instructed to write a blank check for the dollar amount shown without a detailed, line by line explanation of what you are paying for.

2. Wait the common six to nine months for the hospital or other medical provider to call you about why you did not pay your medical bill. At that point, you can politely respond, “Oh, I have been waiting for you to call. I need you to provide me with a detailed, itemized medical bill before I can consider paying it. Thank you.”

3. Once you receive an itemized bill in the mail, match it to your insurance Explanation of Benefits (EOB). This is mailed to you by your health insurance company - not the hospital - and will list the medical services billed. 

4. Make certain that the same list of services appears on your medical bill and your EOB. If they match, you owe the amount due. If not, dispute the difference if the amount on your EOB owed is less than that reported on the hospital or other medical provider bill.

It is long overdue that as health care consumers we demand to be treated with respect and not belittled by big hospital corporations telling us to open our wallets and purses without knowing what we pay for. 

Health Care Consumer Bill of Rights

1. You are a health care consumer – not just a patient. 2. You have the right to determine where you receive your health care.  3. You can choose to have your imaging

1. You are a health care consumer – not just a patient.

2. You have the right to determine where you receive your health care. 

3. You can choose to have your imaging performed at a hospital or at a freestanding imaging facility. Either entity will provide you with one free copy of your images on a disc for you to give to your doctor for review.

4. You can choose to have your blood work performed at a hospital or at a freestanding clinical laboratory. Freestanding clinical labs can interface with most Electronic Medical Record (EMR) systems.

5. You can choose to have your elective surgery care, such as a colonoscopy, cataract surgery or carpal tunnel surgery performed at a hospital or at a freestanding ambulatory surgery center.

5. Knowing you have the above choices empowers each of you as a health care consumer, particularly when you know your medical cost before your medical procedure by looking it up on Pratter. 

Note: Higher medical charges do not result in better medical care but they do guarantee you just what you don’t want - higher medical bills.

Health Insurance Terms

1) Premium.   Definition: The amount of money a person pays for health insurance coverage.  An individual premium for one person costs less than a family

1) Premium.  
Definition: The amount of money a person pays for health insurance coverage.  An individual premium for one person costs less than a family premium that provides health insurance coverage to an entire family.

Example 1.  A single person purchases an individual health insurance policy for $6,000 a year or $500 per month. For this health insurance coverage, the annual premium is $6,000.

Example 2.  A family purchases a family health insurance policy for $30,000 a year or $2,500 per month. For this health insurance coverage, the annual premium is $30,000.

Please note that by a having health insurance policy premium paid, a person or family is still responsible for paying additional medical costs associated with medical care including co-pays, co-insurances, non-covered medical services and deductibles as described below.

2) Co-pay.
Definition: A flat fee paid by the patient for a medical service at the time of service.

Example 1. A patient goes to see his doctor and has to pay a $30 co-pay for the doctor visit service. 

Example 2. A patient goes to the pharmacy to purchase a prescription antibiotic prescribed by her doctor. She pays a $20 co-pay for the antibiotic prescription regardless as to whether the antibiotic costs $25 or $100. 

3) Co-Insurance.  
Definition: The amount of money the patient has to pay for medical care that is the balance of what the health insurance company does not pay. 

A common health insurance plan that requires the patient to pay or “pitch in” for his or her health care is set up as an 80/20 plan. In this scenario, the health insurance company pays 80% of a hospital bill for medical services rendered. The patient is responsible for the other 20% of the bill to get to 100% medical payment to the hospital for the hospital bill.

Example 1. A patient has a carpal tunnel release surgery and receives a $1,000 total medical bill for this service. The patient will have to pay $200 and the health insurance company will have to pay $800 in this 20% co-insurance example.

In general, the higher the percentage of co-insurance toward medical care payment the patient is responsible for, the lower the annual health insurance premium in dollars. 

4) Deductible.
Definition: The amount of money that must first be paid out-of-pocket by the patient before the health insurance company pays for medical care. 

Deductibles for health insurance are like deductibles for car or homeowners’ insurance. For example, if a person has a $50 car deductible, she can expect to pay a higher annual car insurance premium than if she had a $1,000 deductible. Similarly, a health insurance annual premium for a family of five people with a $5,000 deductible might be $26,000 whereas that same policy may cost $35,000 if there was only a $1,000 deductible. The higher the deductible, the lower the annual health insurance policy premium.

5) High deductible.
Definition: health plans with deductibles in the $2,500 and above range. These are referred to as high deductible health insurance policies. These are becoming very common as employers have shifted the financial burden of paying for health care to their employees. 

In this setting, health care consumers have “skin in the game.” If they stay healthy, their medical expenses are low out-of-pocket. If consumers are unhealthy, they pay more out-of-pocket medical expenses until the deductible is met at which point the insurance company pays for medical care. The best way to keep medical costs down is to stay healthy.

6) Charge. 
Definition: the retail or “rack” rate price for medical care. The charge represents the maximum consumer financial risk. It is what the consumer will have to pay if his or her claim is denied by a health insurance company.

7) Claim allowable.
Definition: the discounted rate off of the charge retail rate that the health insurance company has negotiated as the real final price tag for medical care. It represents what a consumer will pay for a medical care item if his or her deductible has not been met. This is the price tag of care when a medical claim is accepted by a health insurance company, also referred to as a covered service.

Hospital vs Surgery Center Care

Elective medical procedures, such as screening colonoscopies, carpal tunnel releases, bunionectomies and cataract surgeries are all routinely performed daily in hospitals and

Elective medical procedures, such as screening colonoscopies, carpal tunnel releases, bunionectomies and cataract surgeries are all routinely performed daily in hospitals and surgeries centers across America.  There are approximately 5,700 hospitals and 7,000 surgery centers in the US. So what’s the difference?

The answer: money! Surgery centers are priced often at only ½ or ¼ of a hospital for the same medical care, even if the same physician performs a carpal tunnel release surgery at Hospital A and Surgery Center B.   Sounds crazy, right?! But it is the truth.

Pratter wants you to know that the medical facility fee is the most expensive part of care for an elective medical procedure and it is often twice or quadruple the price in a hospital compared to a surgery center. This has come about due to hospital lobbyists stating that they have more overhead so they should charge more.  It’s a poor argument, but with enough money, politicians are indeed influenced.

The quality of medical care offered at surgery centers is just as good, if not better, than that offered at hospitals. 

If a hospital buys a surgery center and owns it, they get to charge the expensive hospital medical facility fee, referred to as the HOPD (Hospital Outpatient Department) fee. If a hospital does the billing for a freestanding surgery center, they get to charge the expensive hospital medical facility fee, referred to as the HOPD fee.  Care there becomes just as expensive as if it occurred at the hospital. 

Take home points:

1) Independent surgery centers cost less than hospitals for medical procedures, usually $1,000s less.

2) Hospital-owned surgery centers are just as expensive as the hospital itself.

3) Hospital-employed physicians will be instructed by their administrators to send you to their expensive facilities.

4) You have the right to go wherever you want to receive medical care. That’s your right as a health care consumer. This type of discussion with your doctor can save you $1,000s and not compromise your care. There are many good in-network medical facilities and doctors. 

Pratter understands that affordable access to care is often the difference between receiving it or not. We want each of you to have the most access to the care you need.

How to Ask for Medical Care Pricing

The Wrong Approach Asking for a Cost from a Medical Provider If you are ambitious enough to call your local hospital or MRI center billing department to ask, “What will my

The Wrong Approach Asking for a Cost from a Medical Provider

If you are ambitious enough to call your local hospital or MRI center billing department to ask, “What will my low back MRI cost?” The typical responses include “I don’t know” or “I don’t know until we run this through your insurance company.”

Just imagine going through the checkout line at a grocery store and asking the clerk how much your gallon of milk costs and the clerk responding, “I won’t know until I process your milk through your homeowner’s policy.” Sounds silly but this is how medical providers treat health care consumers.

So what went wrong that led to you not getting a price tag for your low back MRI?  The answer is you did not use the magic word “charge” and you did not tell them that you are not interested in what the insurance company has negotiated as its price tag since you are not an insurance company. You are a consumer.

The Right Approach Asking for a Cost from a Medical Provider

Call your local hospital or MRI center billing department and ask for your low back MRI price tag as follows: “Would you please tell me your charge for a low back MRI? I am not interested in what the insurance company pays you.  Please tell me your chargemaster charge for a low back MRI.” This is admittedly a mouthful but it will get you the correct answer.

If the medical provider is a hospital, and they provide you poor customer service by stating they won’t tell you the charge, tell them they must. Do the following:

1) Ask for the person’s first and last name.

2) Ask for the person’s title.

3) Tell the “customer service” person that you are demanding to know their charge master price in accordance with your right under the Affordable Care Act, Section 2718(e) that such price is to be made known and user friendly to the consumer by federal law. They will give you the price then.

At Pratter, we refer to this hospital charge as the “high” or the maximum financial risk you would have for your low back MRI given that 20% of medical claims are denied. The “charge” amount is what you are legally responsible for if your claim is denied.  Pratter publishes these charges, as well as average insurance discounts, and we work hard in many ways to minimize your financial risk when you need medical care.

Next, call your health insurance company and ask what your low back MRI will cost you since you have to pay for it since you have not met your deductible. Be careful. The health insurance company representative may try to skirt the issue by stating “we won’t know until you claim is submitted as to whether or not it is a covered service.”

Re-focus your question as follows: “I have a high deductible. I have not met it. I know I will have to pay for my low back MRI. I want you to tell me the price tag for it, assuming it is a covered service. I need to know if I can afford my care. Thank you.” This is known as the negotiated discount price or the real price for care, assuming your medical claim is accepted.

We encourage you to “know before you go” when it comes to medical care pricing. 

In-network Pricing Does Not Protect You

The greatest fleecing in America is the health insurance company network. Most people assume that the network protects you financially, meaning one same low price for the same

The greatest fleecing in America is the health insurance company network. Most people assume that the network protects you financially, meaning one same low price for the same medical care item in the same network. Think again.

Physical Therapy Evaluation Example with Real Amount Paid:

Magee Womens Hospital $510
Latrobe Area Hospital $117
Westmoreland Regional Hospital $106
The PT Group $75

These are real bills. These are real paid amounts. We want each of you to be in the best physical and financial health possible. Do not overpay for routine medical care. Instead, “pratter that” and get your answer.

Medical Transparency Laws and Position Statements

A. The Affordable Care Act. The Affordable Care Act, also referred to as Obamacare, requires hospitals to disclose its charges for medical services. The following is noted:

A. The Affordable Care Act. The Affordable Care Act, also referred to as Obamacare, requires hospitals to disclose its charges for medical services. The following is noted:

Standard Hospital Charges. Each hospital operating within the United States shall for each year establish (and update) and make public (in accordance with guidelines developed by the Health and Human Services Secretary) a list of the hospital’s standard charges for items and services provided by the hospital, including for diagnosis-related groups (DRGs) established under section 1886 (d) (4) of the Social Security Act.

There has been no national standard reporting method for medical costs made available to the public until Pratter.

B. AHA Position

According to the American Hospital Association (AHA) website, “consumers deserve helpful information about the price of their hospital care, and the AHA is committed to providing it.” In fact, the AHA has a position statement on this topic noted as follows:

Hospitals are a critical component to the fabric and future of our communities. We agree that consumers need useful information when making health care-related decisions for themselves and their families. Providing understandable and useful information about health care costs is just one way America’s hospitals are working to improve the health of their communities.

The AHA and its members stand ready to work with policymakers on innovative ways to build on efforts already occurring at the state level, and share information that helps consumers make better choices about their health care.

AHA Principles for Price Transparency. In 2006, the AHA Board of Trustees approved a policy regarding hospital pricing transparency. That policy calls for information to be presented in a way that:

  • Is easy to access, understand and use;
  • Creates common definitions and language describing hospital pricing information for consumers;
  • Explains how and why the price of patient care can vary;
  • Encourages patients to include price information as just one factor to consider when making decisions about hospitals and health plans; and
  • Directs patients to more information about financial assistance with their hospital care.

Here at Pratter, we challenge the AHA to honor its position of medical cost transparency by actively encouraging its hospitals to post its charges for all routine outpatient care listed by medical procedure name and CPT billing code. In fact, it’s the federal law.

C. State laws about medical cost transparency.35 states require hospitals to report information on hospital charges or payment rates and make the data available to the public. There are many shortcomings with these legal requirements, including the following:

1. Many state laws do not require that the medical costs made public be formatted in an easy-to-understand way for the average health care consumer.

2. Those states with medical transparency laws that require the medical costs to be easy-to-understand do not enforce the “easy-to-understand” clause.

3. Hospitals in states that are required to submit their charge masters with their line item costs simply do not submit line item costs for all they do.

4. There is no standard submission requirement in any state. Pratter is the first-to-market in the United States with standard medical cost formatting based on standard medical billing Current Procedural Terminology (CPT) coding. Pratter places medical charges into a user-friendly database for medical cost comparison purposes. This is where Pratter has become your advocate. Pratter is set up to facilitate any and all state and federal medical transparency laws.

An example of a state with a medical transparency law, Massachusetts, is set forth below. The bottom line is that the hospital and/or insurance carrier has two days to provide cost information after a patient has requested it. It would be much better customer service to post price tags for medical care online. They can do so but refuse to do so for one reason. It is easy to do so. They have something to hide – high prices.

Advance disclosure of allowed amount or charge for admission, procedure or service as per Massachusetts’ state law:

§228(a): Prior to an admission, procedure or service and upon request by a patient or prospective patient, a health care provider shall, within 2 working days, disclose the allowed amount or charge of the admission, procedure or service, including the amount for any facility fees required; provided, however, that if a health care provider is unable to quote a specific amount in advance due to the health care provider’s inability to predict the specific treatment or diagnostic code, the health care provider shall disclose the estimated maximum allowed amount or charge for a proposed admission, procedure or service, including the amount for any facility fees required.

(b) If a patient or prospective patient is covered by a health plan, a health care provider who participates as a network provider shall, upon request of a patient or prospective patient, provide, based on the information available to the provider at the time of the request, sufficient information regarding the proposed admission, procedure or service for the patient or prospective patient to use the applicable toll-free telephone number and website of the health plan established to disclose out-of-pocket costs, under section 23 of chapter 176O. A health care provider may assist a patient or prospective patient in using the health plan’s toll-free number and website.

D. H.R. 1326: Health Care Price Transparency Promotion Act of 2013.Representative Michael C. Burgess, MD, of Texas introduced this bill on March 21st, 2013. It did not become law. In this legislation, all states would have be required to disclose information on hospital charges, to make such information available to the public and to provide individuals with information about estimated out-of-pocket costs for health care services.

E. Summary. As you can see, there is a lot of momentum gaining toward medical cost transparency – and there has to be. Health care costs makes up almost 20% of our nation’s economy. Health care insurance also makes upward of 20% of a middle class American family’s budget today and that is expect to double to an unfathomable 40% by 2020. For costs so great, you deserve to know what they are beforethe time of purchase just like you do for the other 80% of goods and services sold in our country!

Pratter Medical Cost Transparency Position Statements

The Pratter team has heard all of the excuses as to why medical cost transparency is not possible. These excuses by some medical facilities are offered to protect their business

The Pratter team has heard all of the excuses as to why medical cost transparency is not possible. These excuses by some medical facilities are offered to protect their business profit model embedded in a veil of pricing secrecy. Our company’s website is living proof that not only is it possible but we have accomplished it. Pratter.us has the answers to make medical cost transparency a reality now!

First excuse: Medical cost transparency is too difficult to compare apples-to-apples because one medical institution’s heart failure and cancer patients are sicker than another medical institution’s patients with the same diagnoses. Therefore, pricing doesn’t reflect the sickness of the patient population.

Pratter.us response: 95% of medical care received in one’s lifetime is outpatient-based. This means that there are no hospitalizations. Outpatient medical care can and should be cost compared. A cholesterol level or MRI via the same medical equipment at different medical facilities should not have prices that vary across the country more than a new car – but they do. A simple outpatient procedure such as carpal tunnel surgery or a colonoscopy requires a fixed amount of time in similar medical settings and again can and should be cost compared. For the majority of America looking to stay healthy, seek preventable care and treat small medical problems early, becoming a health care consumer is vital a household’s financial stability.

Second excuse: Medical facilities are not allowed to publish their medical costs because their negotiated contract rates for payment of medical services by an insurance company has a confidentiality clause.

Pratter.us response: The first half of this statement is false. The second half is true. Insurance companies do make the medical facilities that they deal with for a health care provider network sign a confidentiality clause in regard to negotiated discount rates. Hospitals and surgery centers would have adverse financial and legal consequences thrust upon them if they published insurance company negotiated discount rates. However, hospitals, surgery centers, imaging centers and lab centers are permitted, encouraged and should provide their medical charges for all services for their communities. According to Pratter.us, the fair market price for a medical test is the average payment amount by the most common insurance carriers in the region.

Third excuse: It would take too long and too much effort to calculate and post medical prices online. In addition, we don’t have the medical cost and billing software expertise to do this.

Pratter.us response: Pratter.us is not asking medical providers to make public what they don’t already have in hand. All medical facilities and providers have a charge master, most often in an Excel spread sheet format. Each and every medical test has a unique five digit billing code that is standard in all 50 states. 

Fourth excuse: Listing a medical cost for a procedure is not fair because it does not reflect the value of our service because we do it better and should be able to charge more than other medical facilities in our community.

Pratter.us response: Pratter.us is not meant to be all things to all people. Cost is a consideration in all other aspects of consumerism. Health care consumerism is here to stay as the cost burden has shifted to individuals bearing greater medical costs. If a person goes to buy a car, he or she is well aware of the good price for the desired vehicle via online searching. Quality assessment is based on other factors such as personal experience, word of mouth recommendation, review articles and consumer education by the car dealership. This process applies to all purchases and health care should be no exception.

Fifth excuse: Our hospital has to charge more because we have more overhead. Therefore, if we post our medical prices online, we would lose market share.

Pratter.us response: Reduce your overhead or lose market share. Medical facilities that refuse to post their prices have one thing to hide – high prices. We believe that the majority of medical care providers are about to tout their value based upon pricing and performance and we welcome all to our platform.

The Pratter Principle

The Pratter principle: all medical costs should be made known before the time of purchase.   If one goes to the grocery store, every single item in the

The Pratter principle: all medical costs should be made known before the time of purchase.  

If one goes to the grocery store, every single item in the grocery store has a known price before you buy it. If you go to the mall, every piece of clothing and food has a known cost before you buy it. Similarly, by principle, Pratter believes that every bit of health care provided, ranging from a cholesterol level to a knee replacement has a known cost that should be made conveniently available to every health care consumer before you buy it.

We do have a right to know health care costs. This is referred to as medical cost transparency. Health care providers, in general, have claimed that it is too complex to provide medical costs because they vary so much, especially for inpatient medical care (staying in the hospital) after a heart attack or emphysema exacerbation. Such responses ignore the obvious – most medical care received in a person’s lifetime is outside the hospital (i.e. outpatient or routine)!

These routine outpatient costs are easy to report. There is a five digit medical code for each procedure whether it is a shoulder joint injection, a lumbar spine MRI or a brief follow up doctor visit. Each code is assigned a dollar figure. There is no “it depends” in this setting. 

Pratter has set its mission to make these straightforward costs known to you – the public. Gone will be the day you are referred to as a patient. You will now be referred to as a health care consumer. As a health care consumer, you have rights. 

The Surprise Hospital Bill: How to Deal with It

This will be your reference on how to deal with the intentional intimidating hospital billing process, also known as “the surprise medical bill.” It has been brought

This will be your reference on how to deal with the intentional intimidating hospital billing process, also known as “the surprise medical bill.” It has been brought to Pratter’s attention that many health care consumers are frustrated and confused by hospitals’ billing practices. So much so, Pratter has the following advice:

Part One: Prevention:
1. Do not go “down the hallway” for routine medical care. The hospital is the most expensive location to get blood work or an imaging study or a surgery center procedure.  Look for freestanding medical providers (call and ask them if they are owned by a hospital or not) not owned by hospitals, including:
a) Surgery centers
b) MRI/CT/X-ray centers
c) Blood work centers

2. It is your right as a health care consumer to take your prescription for care to any medical provider, both in-network and out-of-network. There are often plenty of options in-network that are not hospitals.

3. Separate health care care from health insurance. Insurance is for a catastrophe. Use a hospital for catastrophe care when you have a real emergency or need to stay overnight. Use other medical providers for all routine care.

4. Ask for the price of your medical care at a hospital before you buy it. The hospital has to give you the price, known as the charge, or retail amount, per the federal law known as the ACA. This section is quoted below:

Public Health Service Act, Section 2718 of the Affordable Care Act. Bringing Down the Cost of Health Care Coverage.

(e) Standard Hospital Charges. Each hospital operating within the United States shall for each year establish (and update) and make public (in accordance with guidelines developed by the Secretary) a list of the hospital’s standard charges for items and services provided by the hospital, including for diagnostic-related groups established under section 1886 (d)(4) of the Social Security Act.

5. Ask for the first name, last name and title of the hospital employee that gave you the price tag for your care item. This enhances accountability. Ask for the person to print or email you the price quote.

6. Ask for a paper copy of what the hospital wants you to sign electronically. The hospital wants you to sign that you agree to pay the secret price next month. This is referred to as the secret pricing scandal. Do not do it. Instead, write, "I agree only to pay all pricing disclosed before the time of my medical care” and initial it. Ask for a copy.

7. If the hospital does not comply with #4 through #6 above, you should seek care elsewhere. You have just received poor customer service.

8. Report the hospital for violation of ACA federal law by calling 1-800-MEDICARE or write to: Fraud Section, Criminal Division, US Dept of Justice, ATTN: Chief, Health Care Fraud Unit, 950 Constitution Ave, NW Wash DC 20530

Part Two: You Have Received a Hospital Medical Bill – Now What?

1. You will always receive an unitemized hospital bill. It’s standard poor customer service.

2. Never pay an unitemized hospital bill. You don't pay unitemized bills in the rest of your personal and business life.

3. Send a written request back with a copy of your medical bill (keep a copy too) asking for an itemized medical bill with the five digit CPT (Current Procedural Terminology) billing codes and the names of each billable item spelled out without any abbreviations. Tell them that you are not a doctor and you need to see the medical spellings to understand your medical bill.

4. If you receive an itemized medical bill, compare it to your insurance EOB (Explanation of Benefits). These can sometimes show up in the mail a month apart or more. See what the insurance company was billed and says was covered. Compare it to your itemized medical bill. Only pay those that match.  

For example, an Aetna policy stated that IV fluid administration was part of an ER visit code and could not be billed separately. The hospital billed this $360 IV fluid administration separately. Don’t pay this $360 in this example.

5. If you do not receive an itemized medical bill, do not pay your unitemized medical bill. Wait for the hospital collection department to call you, which could take three to six months, and politely state “Thank you for calling me. May I please have your first name, last name, title, and phone number? And please send me an itemized medical bill so that I can consider paying it. You failed to respond to my written request for an itemized medical bill. Surely, you don’t expect me to pay a bill without reviewing one.”

Part Three: The Hospital Has Sent You to Collections – Now What?

1.  Pay $5/month or $10/month on your bill. It does not matter if your bill is $5,000 or $5,000 or $50,000. The important point is that you are making a good faith effort to pay your bill so the hospital cannot turn you in to a credit agency to give you bad credit. This maneuver protects you until you get this matter resolved.

2. Non-profit hospitals (FYI – their websites end with .org if non-profit). If the hospital is non-profit by IRS standards, they cannot turn you over to a credit agency for bad credit until they are able to assess your current financial situation by you filling out a financial assistance form. The hospital will send you a form. You can either complete it or send another letter to them stating that you will not fill out this form or pay an unitemized medical bill. They must send you an itemized medical bill.

3.  Negotiate your claim. This is important for denied medical claims.

Option #1: Call the hospital anonymously and ask for the cash price for your care item. Tell the hospital you have no insurance and would like to know the cash price. Next, when speaking with collections, tell them you are willing to pay the cash price in monthly installments over the next year.

Option #2: Offer to pay what Medicare pays and nothing more. This will be found on pratter.us next month.

Offer #3: Offer to pay what Medicare pays and another 20% more. FYI – a regular health insurance company will often pay a hospital three times more than a Medicare payment. Hospitals often will want more than Medicare since Medicare is a poor payer of care. They feel entitled to more. Give them just a little more.

4. Small claims court. Note the following:

  • If the hospital did not provide you with the price of care before the time of service, quote the judge,

  • “I asked the hospital for the price of the medical care before the time of service as per my legal right under the federal law, ACA, Public Health Service Act, Section 2718(e). They failed to provide it to me, thus violating federal law. They chose not to provide the price for care to me. I needed care. I did not agree to secret pricing.”

  • If the hospital did not provide you an itemized medical bill before sending you to collections, quote the judge,

  • “I asked for an itemized medical bill both verbally and in writing. Here’s the proof (bring your letters and copy of the unitemized bill). And they failed to provide it to me. I am not in a position to pay any bill without reviewing it.” Legally, the court system will not make you pay an unitemized bill.

  • Denied medical bills. Sign up for Pratter’s service available for individual consumers come September. We will help provide the price the health insurance companies’ pay a hospital for your care. This price, known as the discount price, is always much less than the charge, also known as the retail price. Never pay more than a health insurance company for care. Always try to pay less as outlined in the above three options.

  • In a denied claim situation, the hospital will ask that you pay the charge, meaning the very expensive retail price. If you followed the instructions in Part One of this article, this would never happen to you. If you did not, show the judge the amount Medicare pays, the amount the insurance companies pay, and the cash price you were able to obtain. Recent court rulings do not expect an individual to have to pay more than a health insurance company. This follows the logic that an individual is not a multi-billion dollar organization like a health insurance company and should not have to pay more than an insurance company for care. So health care consumers are being protected from high costs of health care in our court system.

Don’t be bullied. Be the bull. Happy Pratterday!

Trust Your Doctor with Your Life – Not Your Wallet

Did you know that doctors employed by hospital systems are usually forced to send you to their most expensive imaging centers, blood work centers and outpatient surgery centers?

Did you know that doctors employed by hospital systems are usually forced to send you to their most expensive imaging centers, blood work centers and outpatient surgery centers? If not, their doctors can be reprimanded or fired. It’s so convenient and tempting to go down the hallway and get those four blood tests only to realize you spent $800 instead of $200 five minutes down the road in-network.

Pratter wants you to know that you should trust your doctor with your life – not your wallet. In fact, 60% of the 900,000 physicians employed by hospitals are tracked where they send patients by an electronic medical records (EMR) system. If the doctor refers outside the hospital system he or she is employed by, he or she risks being fired. Thus, the doctor wants to keep his or her job, regardless of whether or not it financially distresses you.

Acknowledging that doctors who are employed by hospitals will send you to the most expensive location for care – their very own hospital – is the single greatest piece of knowledge needed to lead to a successful culture change of shopping for healthcare with “know before you go” pricing for the most common tests and procedures. The hospital CEO and its employed physicians do not have your best financial interest at heart. That's why the pricing has been kept secret.

There are five major categories where America can receive its health care and these include:

1. Hospitals

2. Ambulatory surgery centers

3. Independent imaging (e.g. MRI and CT) centers

4. Independent lab centers (e.g. Quest Diagnostics and LabCorp)

5. Private practice physicians (employed ones fall under the “hospital” category)

In general, as outlined above, the pricing also goes from one through five. Hospitals do a great job of taking care of sick people. They are ideally suited to take care of people that need to stay in the hospital, referred to as inpatient medical care. Otherwise, stay away from hospitals to save the most money on common tests and procedures.  Keep more money in your bank account and know that the hospitals and health insurance is there for a catastrophe.

Pratter is here to make it easy for you to understand your best-priced care options in-network, close to where you live or work. 

WARNING: Don’t Go Down the Hallway

If your doctor is employed by a hospital, he or she will be forced to send you down the hallway for your blood work or imaging study. Be forewarned that “down the hallway

If your doctor is employed by a hospital, he or she will be forced to send you down the hallway for your blood work or imaging study. Be forewarned that “down the hallway” is the most expensive location to receive such routine care.

As healthcare consumers, in the 1990s, we learned that generic drugs were just as effective as brand name drugs, and for a dime on the dollar. Similarly, right now the big trend in healthcare consumerism is to know that “down the hallway” is the most expensive place and it should be avoided.

Here’s how it works. The hospital-employed physician has to enter a prescription for blood work or an imaging study, such as a CT or MRI. The hospital electronic medical record (EMR) only has hospital options listed. This conveniently keeps all the care and money in the hospital but at your expense. Trust your doctor with your life - not your purse or wallet.

Note that with a prescription in your hand (ask for one if it is not handed to you), you can take that prescription anywhere you wish, including many other in-network medical providers for the same exact care at a lower price. In-network pricing for the same care varies a lot. In-network pricing does not protect you. Sometimes, you can save a lot of money by going out-of-network also.

In summary, don't let the hospital administrator, via your doctor, force you to receive medical care at his or her hospital.  It’s your health and your hard-earned money and you have the right to take that prescription for a medical test anywhere you wish with many of other great in-network care options.

What about Quality?

Pratter wants to provide you with cost effective, high quality options for routine  elective medical care.  Elective medical care means non-emergent. This is

Pratter wants to provide you with cost effective, high quality options for routine  elective medical care.  Elective medical care means non-emergent. This is also referred to as outpatient care, meaning medical care provided that does not require you to stay overnight in the hospital (this is called inpatient). 

The categories of care for which you have time to shop for great pricing and great care include blood work, imaging studies (e.g., MRIs and CTs) and elective medical procedures (e.g. colonoscopies, cataract surgeries and carpal tunnel surgeries).  There is no quality issue to discuss for blood work and imaging studies since they do not even require a physician to be performed. 

If you are seeking a high quality physician for an elective medical procedure, though, consider the following:

1) Board certification.Verify that your doctor is board certified by one of the 24 medical specialties under the American Board of Medical Specialties (ABMS) umbrella at:  http://www.certificationmatters.org

2) Training locations.  This includes both medical school and residency program. There are three ways to learn where a doctor has been trained with those that are American university-trained being most frequently held in high regard.

  • Check the doctor’s website.
  • Check the hospital’s website. Hospitals go to great length to verify a physician’s credentials before providing him or her with hospital privileges.  This renders this technique trustworthy.
  • Call the doctor’s office and ask.

3) Volume. If a doctor performs too few or too many procedures, you may wish to go elsewhere.  While there is no magic number to consider, the answer to this will either add or subtract from your decision comfort level. 

What Health Plan Should I Purchase?

There are a number of growing millions of hard working Americans that cannot afford the price of a health insurance premium, now at about $26,000 a year for a family plus another

There are a number of growing millions of hard working Americans that cannot afford the price of a health insurance premium, now at about $26,000 a year for a family plus another $5,000 out-of-pocket deductible before the health insurance company pays $1 for care. You are lining their bank account with $26,000 in this example.

Alternatives to the above horrific, unaffordable, unsustainable health insurance costs: 

1) Go for the highest deductible. Remember, insurance is for catastrophe prevention - not routine care. Please refer to your auto and home policies. That's how they work. 

2) Always ask for cash price for care and always ask for any special "best cash" program pricing, especially for drugs. Sure, this doesn't go to your deductible but wake up - you are a health care consumer and paying for everything anyway. 

3) Minimal Essential Coverage (MEC) plans. They keep you legal under the ACA. A piece of the pie is better than no pie if that's all you can afford. 

4) Christian shares - they are clear to state they are not legally insurance but they still get you covered and for a lot less than the major health insurance companies.

5) Stay healthy. Eat right. Exercise. Be thin. No smoking. No stress. Follow this medical advice and you’ll keep a lot more money in your bank account. 

What To Do If Your Claim Is Denied

1. Compare your medical bill to you insurance explanation of benefits (EOB). Make sure the same care item is listed on each piece of paper so that you were not wrongfully billed

1. Compare your medical bill to you insurance explanation of benefits (EOB). Make sure the same care item is listed on each piece of paper so that you were not wrongfully billed and denied for care that did not occur. 

2. If the medical bill and EOB match, ask your doctor's billing staff if there is any way they could re-submit the bill with a different diagnosis code that would help get your medical care covered. 

3. Call the medical provider billing department and ask for their cash price for the medical care item received. This is now your target payment. You can even ask to make bill payments over several months or a year. 

4. Call your insurance company and ask what you would have to pay for that care item if you did not yet meet your deductible and had to pay out-of-pocket for the medical care item if it was to be a covered service. Never pay more than this amount to settle the claim. 

5. Never pay the charge amount, aka retail rate. Always ask for the first and last name and title of the person you are speaking to in order to promote accountability and a desired level of customer service. Be nice. You get more bees with honey than with vinegar. Good luck! You can do it. Knowledge is power and you are now powerful.

Why Medical Cost Transparency is a Must

Medical cost transparency definition: Known charges (retail rate) and known insurance company negotiated discount payments (claim allowable) beforethe time of service.

Medical cost transparency definition: Known charges (retail rate) and known insurance company negotiated discount payments (claim allowable) beforethe time of service.

Charge: represents the maximum consumer financial risk. It is what the consumer will have to pay when his or her claim is denied by a health insurance company.

Claim allowable: represents what a consumer will pay for a medical care item if his or her deductible has not been met. This is the price tag of care when a medical claim is accepted by a health insurance company.

1) 80% of working Americans have a high deductible. We are consumers of health care and pay for everything out-of-pocket - except an ICU hospital stay.

2) The average high deductible is $5,000.

3) Real cost of deductibles is much higher as health insurance companies deny care daily, resulting in more out-of-pocket expense.

4) Average family household insurance premium is $27,000.

5) 40% increase per year for health insurance is common place, unaffordable and unsusutainable.

6) One million American medical bankruptcies each year - #1 cause of bankruptcy.

7) 75% of those filing for medical bankruptcy do have health insurance but that does not matter when their claims are denied. Now they are stuck with the secret price tags that place them into financial crisis.

8) 60 million Americans struggle to pay their medical bills and have double the credit card debt, about $14,000 on average, than those without medical debt.

9) Health care costs are up 500% since 1995 yet salaries remain flat up only 15% in the same time frame. Every potential salary raise feeds the health care beast and keeps the salary line flat-lined.

10) Capitalism defined: Known pricing creates smart shopping. Known pricing creates competition and with competition the consumer wins every time with lower pricing. Just look at every other sector of the economy.

11) ERISA law. Self-insured employers, government entities and unions have a fiduciary responsibility to manage benefit costs for employees. This is a big liability for such employers now as they have no ability to understand cost drivers and implement a health care cost reduction plan without itemization of medical care costs. For every $1 put into retirement, $2.50 is placed into healthcare per employee. Medical cost transparency is a necessary for self-insured organizations to be in compliance with this federal law.

12) ACA, Public Health Service Act, Section 2718 (e). Bringing Down the Cost of Health Care Coverage. Standard Hospital Charges. Each hospital operating within the United States shall for each year establish (and update) and make public (in accordance with guidelines developed by the Secretary) a list of the hospital’s standard charges for items and services provided by the hospital, including for diagnostic-related groups established under section 1886 (d)(4) of the Social Security Act. Currently, all 5,700 hospitals in the USA are in violation of this federal healthcare law.

Not medical cost transparency definition: false out-of-pocket estimate. Who wrote the pricing contract? Who signed the pricing contract? Who filed the pricing contract? Insurance companies know to the cent what each of us owes but they will not disclose it.

Let’s demand better customer service. Let’s demand medical cost transparency.

Your Claim Denial Secret Weapon: Section 2718 of the Affordable Care Act

Surprise medical bills - no, they never should happen. Your medical claim has been denied. Now you are supposedly on the hook for agreeing to pay the secret price.  Best way

Surprise medical bills - no, they never should happen. Your medical claim has been denied. Now you are supposedly on the hook for agreeing to pay the secret price. 

Best way to be pro-active: Only sign a paper document BEFORE the time of service that "I agree to pay only for medical care for which pricing is disclosed before the time of service." Initial and ask for a copy. 

Best way to handle after a denial without the above clause: keep your money for the half year to year it takes the medical collections department to call you. Let them come to you.  

1) Enhance accountability. Ask for first and last name, title and phone number.  

2) Ask for an ITEMIZED medical bill complete with ALL billing codes or else you won't pay. You don't pay a bill without looking at the details. 

3) Hospital bill and Section 2718 of the ACA. Tell the hospital collections department that wants you to pay the secretly priced surprise medical bill “you did not provide me with known pricing before the time of service in accordance with federal law, Section 2718 of the ACA.”

If the hospital suggests it will pursue you (not exactly "care" in healthcare), fight back. Tell them you will turn them in to Center for Medicare Services (CMS) for being a federal outlaw. 

No more being bullied. You are now the bull. Demand better as a health care consumer.

How to ask for an itemized medical bill

Hospitals have sued the federal government to preserve their right to provide you with an unitemized surprise medical bill. Ask for an itemized bill to both delay your payment and

Hospitals have sued the federal government to preserve their right to provide you with an unitemized surprise medical bill. Ask for an itemized bill to both delay your payment and find mistakes that make you pay less.

To Whom It May Concern:

I request an itemized medical bill with the 5 digit CPT code for each item for which you request payment for the dates of service in question.

You forgot to itemize these medical bills. Please include the 5 digit CPT code for each item next to the full name of each medical test/care item that you want paid. Please do not use abbreviations for medical words. I am not a medical doctor. Please spell out the full name of each medical care item as per the AMA CPT manual.

Once you have provided me with each 5 digit CPT code and the full name of the medical procedure/care item as per The AMA CPT manual, I will consider payment.

I will wait to hear from you. Thank you in advance for your cooperation.

Sincerely,

And if they don’t provide you with your itemized request, don’t pay them. Ask again with the same exact letter. Don’t be bullied. Be the bull.