I talk a lot about leadership on this blog but I’m also a health care finance consultant that concentrates on charge master issues. What this means is that I help hospitals look at their charges to see if they’re coded properly, being priced fairly, and are being captured properly so that they know they’re capturing the most revenue in the most accurate and fair way possible.

What this also means is that I sometimes tell them that what they’re charging for is either ridiculous, illegal, or just plain wrong. The reasons for things like this are:

     * not understanding the rules
     * charging for things that aren’t payable
     * charging for things that aren’t supported by diagnosis
     * charging for things that aren’t supported by the medical record
     * charging for things that are stupid as sin

Some hospitals are doing it intentionally; others just don’t know. The main thing is that, for the most part, it’s not really impacting you, the patient. If you have insurance, you have nothing to worry about because your bill is being paid based on diagnosis rather than the actual charges. However, if you’re a self pay patient… well, in some states hospitals have been forced to set you up so you get some kind of relief, while in others you’re still officially responsible for the whole thing.

I would never call out any hospital by name because they might be a potential client. However, I can guarantee that the hospital whose bill I’m highlighting now will never call me as a consultant, as it’s the hospital my grandmother was taken to back in May when she fell at home, the one where she had her operation that she never recovered from, the one I went to and talked with representatives about care failings I noticed, and the one where I used to work in the system with before I became an independent.

I had to request an itemized bill for my grandmother recently, and of course I looked at all her charges. Luckily she had Medicare, so she wasn’t going to be responsible for the entire thing. But what I saw has irritated me, and I’ve seen it at a few other hospitals as well. So, if you’re reading this as a hospital be a little scared because I’m about to reveal some issues, and if you’re reading this as a potential patient who might be self pay look at this as something to be ready to potentially complain about.

1. Daily supply charge. You should be insulted by this one because most of the time as an inpatient you’re not using any daily supplies. Some hospitals will tell you that they use a charge like this to offset expenses; some tell you that they charge this instead of all the other stuff they might charge you for. It’s a lie.

The problem is that many supplies aren’t covered by insurance. Some hospitals rightly won’t put those charges on the bill, but instead of a daily supply charge, which won’t be paid by anyone except self pay people, they should build the cost into the daily room rate or only charge when they have to use reimbursable supplies. No one should be charged for all things that a hospital might consider as a supply. See the next point.

2. Stupid supplies you didn’t really use. On my grandmother’s bills are charges for gloves, both powder and no-powder latex gloves. These are what’s called “non sterile” supplies, and they’re non reimbursable. In some states hospitals aren’t even allowed to bill for these items, and if they do in other states, insurance companies ignore the code they’re supposed to go under. If you get billed for things like gloves, blankets, sheets, slippers (she got billed for slippers that we know she never received because my mother took slippers to the hospital the day after her surgery), most bandages, or pretty much any other supply item that’s less than $50, you should complain.

3. Low priced and multiple pharmaceuticals might be a red flag. There are often lots of medications shown on a hospital bill on a daily basis. Often these medications are dispensed based on initial diagnosis, but if you’re in the hospital a long time they’ll either change or be cut back. In many hospitals you’ll see these charges reversed if not used. In this case not a single medication was reversed, which is a major league red flag to me. Strangely enough, there are some medications she was given that aren’t on the itemized bill; I know this because I asked questions while she was there.

Hospitals don’t get reimbursed for a lot of pharmaceuticals; if there’s no code, most insurance companies aren’t paying for it. But hospitals love building up their expenses by including a lot of these things on a bill so they can build up their cost report when dealing with Medicare later on. These won’t add up to much most of the time, but the point is that you should check on these things here and there if you’re self pay.

4. Procedures that aren’t billable. On my grandmother’s bill were 3 charges for physical therapy evaluation. Per Medicare rules, you can only bill for more than one physical therapy evaluation if the patient’s status changes during the course of physical therapy treatment. My grandmother never regain any alert status in the almost 2 weeks she was in the hospital. Therefore, she never had any real physical therapy. They may have visited 3 times while she was in the hospital, but since they couldn’t do anything with her and her status didn’t change, they violated Medicare standards.

5. The emergency room charges are somewhat incorrect. If a patient is admitted into the hospital but first came through the emergency room, any emergency room charges must be put onto the hospital bill. This did happen in my grandmother’s case. However, she went into the hospital via ambulance because she fell and had a broken hip. The hospital charged as a level 5, which is the highest initial level, then added a second critical level charge even higher than the level 5. They probably do this because she came by ambulance, but they didn’t come close to giving her the care needed to reach level 5, let alone the second charge.

How do I know? I was there. Out of the first 5 hours she was in the emergency room she was by herself, not counting my mother and I, for a little over 4 hours of that time. The other 45 minutes was when they took her up to another floor for x-rays. Does that sound like a level 5 process to anyone, let alone adding an extra critical level? If she’d ended up being an outpatient and been sent home this is a claim that would have gone into review because it wouldn’t have matched the diagnosis; it wouldn’t have come close. Because it’s an inpatient it’s paid for under what’s known as the DRG (diagnosis related groups), which means the individual charges won’t be scrutinized. But if you were a self pay, you’d have paid an extra $3,000 that wasn’t valid.

If this was a self pay bill, or if I didn’t known the entire claim was paid except for the deductible, which is standard, I might make a stink about this. The last two things I mentioned could be considered fraudulent by Medicare if they chose to go that far; at the very least they’d take the payment back and not allow the hospital to bill the patient for anything extra. Other insurances might not like it if they decided to explore, but most of them would just let it go as well. Still, this hospital isn’t alone in doing this type of thing, so they’re not necessarily the evil empire here.

But they’re in the wrong, and it’s deplorable and sad. And they probably don’t care. I hope your hospital cares more about how they’re charging their patients.
 

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