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Hospital Overcharging Comes in Many Forms

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Dallas, TXIngrained in doctors and others in the health care field is a mantra that suggests no patient in need of important, indeed life-saving medical care should ever be turned away due to an inability to pay. Most hospitals would also agree with such a humane position, in spite of the fact that hospitals are businesses and succeed or fail based on their capacity for generating revenues. To that end, a wide variance in emergency room charges and various media reports on hospital conduct suggests that hospitals often look for creative ways to generate cash flow that may not always be ethical.

For example, The Dallas Morning News (11/28/13) reports that Parkland Memorial Hospital in Dallas is alleged to have improperly billed Medicaid and Medicare at least $743,000 - or as much as $1.2 million - for services. A recent audit by the inspector general for the US Department of Health and Human Services found that Parkland was paid more than any other hospital in the state of Texas for what were described as “unallowable” dental services for 2010 and again in 2011.

According to The Dallas Morning News, charges such as those for decay procedures or tooth extractions - including x-rays - are only allowed when necessary for the treatment of jaw disease and other conditions covered for the elderly and disabled. The audit found that the charges did not qualify under those criteria - a finding the hospital is reported to have acknowledged, blaming the problem on billing polices and procedures that were lacking.

But hospital overcharging has happened before at Parkland. According to the report, the hospital was tagged with an allegation over claims for physical rehabilitation consultations that were never ordered by a patient’s primary care physician. The allegations of fraud emerged from a disputed medical bill whistleblower lawsuit. In May 2013, the hospital agreed to a $1.4 million settlement, while accepting no liability in the matter.

Another hospital was put on the hook for using improper codes when billing for services. And the National Health Care Anti-Fraud Association, based in Washington, reported in the Cleveland Daily Banner (10/30/13) that an estimated $68 billion is lost each year to fraud in the health care industry each year in the US. And reports that errors can result from “typos, or deliberate fraud.”

To that end, fraud is alleged in a reported settlement to which Adventist Health System/Sunbelt Inc., the parent company of Florida Hospital in Orlando, has agreed. The lawsuit was scheduled to go to trial in December. The alleged fraud, which is said to have involved the use of improper codes to intentionally overcharge Medicare, Medicaid and Tricare for imaging services, had the potential to result in millions of dollars in damages.

However, according to the Orlando Business Journal (12/19/13), the lawsuit, originally filed in 2010, was dismissed according to court documents filed December 18 of last year. The various parties are said to have 60 days to finalize the settlement.

Various charges inherent with hospital care, including emergency room charges, can vary greatly depending upon who is footing the bill. Hospitals providing services for the poor and uninsured will take a loss on the actual costs of those services. Health critics point out that hospitals will then try to recoup those losses on the backs of other patients - and it is often the well-heeled patient without insurance but who has assets available that pays the full freight.

That’s because hospitals have a better expectation of receiving the full cost for billed services, such as emergency room fees, from uninsured patients than those covered by health insurance.

To that point, an insurer will, as a matter of policy, adhere to a disputed medical bill mechanism and negotiate with the hospital, paying at the end of the day a much smaller percentage of the original bill.

Whether the hospital took that emergency room cost and inflated the numbers prior to submitting to the insurer - knowing the insurer would challenge the numbers and expect a lower invoice - is a matter of conjecture and allegation. The fact remains, however, that patients without insurance do not have the weight and therefore the clout of an insurer or health management organization (HMO) behind them - and are thus completely exposed to the hospital’s bidding.

Regardless of a patient’s financial or insurance circumstances, it’s prudent to scrutinize an emergency room bill. According to Medical Billing Advocates of America (MBAA), a national association that provides a second pair of eyes for patients and their invoices for health care, eight out of 10 hospital bills scrutinized by MBAA members contain errors.

Concerned about your er charges? You’re not alone. Just don’t pay them blindly. Ask a lot of questions, and challenge the charges. That’s what everybody else does, and like a car salesman expecting to dicker over the sticker price, a hospital would also expect nothing less…


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