When You Have 30 Medical Bills To Decipher

Last spring, Eric fell off his bike onto his elbow and, after several visits to an orthopedist, ended up with about 30 bills and claims summaries. We asked him to what degree he was able to make sense of those statements.

Eric Herot: I’d say about 50 percent. Some of these things seem like they should be straightforward, but then when you delve into it there’s the same thing listed with different prices. And then there’s a completely different bill I received that says, “emergency room, medical/surgical supply, pharmacy.” What do all these things mean?

Sacha Pfeiffer: In most cases you received two or more bills for the same visit. There’s one example I was looking at — it was your trip to the emergency room. There were three bills: one for an X-ray, another for reading the X-ray, plus something labeled “med/surg supply,” and a third for the visit itself. In each of those cases, did you know what you were paying for?

Herot: To some extent, yes. It helped that I was conscious during the visit, so I remembered everything I got and I sort of worked backwards based on what things were priced. Like, I’m fairly certain that the $1 pharmacy charge was probably the Aleve that I was given.

The pain killer?

Herot: Yes. And the $25 medical/surgical supply was probably the sling that I was handed. But there’s no explanation on here of what any of this stuff was. If, God forbid, I was unconscious, there’s no way I’d be able to figure out what any of these things were.

The interview then turns to Dr. Abraham Nick Morse, a physician at Brigham and Women’s Hospital who’s had administrative positions dealing with medical billing.

Dr. Morse, are these bills more clear to you because of your experience in health care?

Dr. Abraman Nick Morse: I hope so. The fundamental thing that is helpful to understand is that physician services and the hospital’s services are dealt with through separate financial parts of the hospital organization. It’s also important to remember that the radiologist who read his X-ray bills separately from the emergency department physician who managed and coordinated the care that he had in the emergency room.

Herot: I should also add that it’s not like there’s any point in the process, if you were to try to shop around for care, that you’re told ahead of time how it’s going to work and what it’s going to cost you.

Let’s look at one of the claims summaries from Eric’s insurer. Dr. Morse, here’s one that shows what the hospital charged and what the insurer actually paid. In this case, the hospital charged $283 for X-ray and lab services. But the hospital was paid only $65 by the insurance company. Why that big difference?

Morse: Think of the hospital charges as the amount that the business would like people to pay them in a perfect world. The amount that’s allowed is the negotiated payment between the hospital and insurance company. And here’s a situation in which the insurance company is actually doing you, the consumer, quite a favor, which is that because they bring volume to the hospital they have the ability to negotiate with the hospital and lower the rates. There’s almost no situation in which the hospital charge gets paid by anybody, except if you’re unlucky enough not to have insurance.

In a sense, what the hospital charges is a fantasy number.

Morse: There are no illusions that what they [the hospital] put down for the charge is going to have any influence on what the insurance company pays, for the most part.