12202014Headline:

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Affordable Care Act Shining Bright Light on Hospital Billing?

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There are many people fighting the Affordable Health Care Act (ACA) and a larger number of people who welcome the attempts to bring our health care system into control.  In its latest step towards improving healthcare for Americans the Obama administration called for billing data from hospitals across the country. Recently, the Center for Medicare and Medicaid Services (CMS) released data for 3,317 hospitals, revealing wide variations in charges for standard procedures The CMS looked at 98 common ailments and compared medical charges from 2011 to 2012. According to an analysis done by the New York Times, “for all but seven (common ailments), the increase in charges exceeded the nation’s 2 percent inflation rate for that year.” In some cases the increase was more that four times the national inflation rate.

Officials are unable to explain exactly why charges vary so greatly, though it is thought that teaching facilities have higher charges than other hospitals and it may be that more seriously ill patients require longer stays and more medical intervention. These examples show some of the extremes found in the data,  “In 2011, the Wuesthoff Medical Center in Rockledge, Fla., a hospital with 300 beds near Cape Canaveral, charged patients admitted for a severe irregular heartbeat an average of $25,361. A year later, the average charge more than doubled to $53,597. In Muncie, Ind., the price of treating a kidney or urinary tract infection at Indiana University Health Ball Memorial Hospital jumped 70 percent to $38,873 in a year. And at Baptist Medical Center in San Antonio, the charge for esophagitis and other digestive disorders rose 34 percent to more than $46,000.”  (NY Times, 6/2/14)

Anyone who has ever been to the doctor has received one of those confusing bills that show the original charge, followed by an adjusted rate; then the portion your insurance company pays followed by what you owe. Medicare and insurance companies often pay a negotiated rate, which is less than the initial billed rate.  For those people without insurance there may not be an adjustment and that’s where the problem lies.

The newly released hospital data, and previously released data on doctor billing, is part of the President’s plan to bring transparency to healthcare billing (among other areas of healthcare). This new information has not cleared things up, but instead only raised concerns about the veracity of our medical system, which is probably what the administration anticipated. “We think this is a big deal. We think it’s very important that people can have conversations about prevailing charges and variation in charges among hospitals,” said Niall Brennan, acting director of the Offices of Enterprise Management at the Centers for Medicare and Medicaid Services.” (NY Times)

The data on hospitals follows the earlier release of information about doctors who bill Medicare. Consumers can now see which doctors bill Medicare the greatest amount and how many procedures they perform. The AMA protested the release of this data, saying that the information might be incorrectly interpreted. What the data does show is that a small percentage of doctors are billing Medicare for millions of dollars. “About 3,300 ophthalmologists, for example, were paid a total of $3.3 billion from Medicare, according to the Times analysis. Much of the spending was the result of an expensive and frequent treatment for a kind of age-related macular degeneration, the leading cause of severe vision loss in the elderly.”

The Times’ analysis concluded that roughly two percent of all doctors account for about $15 billion in Medicare payments, roughly a quarter of the total Medicare payout.

“Any time Medicare releases a lot of data, it changes the conversation in America about transparency, about cost and quality,” said François de Brantes, the executive director of the Health Care Incentives Improvement Institute. “It’s more a signal from Medicare to market,” he said. (NY Times, 4/9/14)

Now that we have this data about doctors and hospitals there should be increased scrutiny on billing practices, including the practice of unnecessary tests and procedures. The medical world is not happy about the release of information. For years doctors and hospitals have operated from a position of power and secrecy. Most doctors do not tell you what a procedure will cost and they probably do not even know. You cannot get an estimate for your colonoscopy though you would never consider replacing your home heating system without at least one estimate. We have been left in the dark about how our medical dollars are spent; crossing our fingers hoping that our overpriced health insurance is going to cover the costs.  Most of the time, we do not know the price of a procedure until we receive the bill, which is the opposite of how we price almost everything else we purchase.  We have been rendered powerless by a vast and powerful group of medical practitioners, the health insurance industry and their lobbyists. This latest attempt by the Affordable Care Act to remove the shroud of secrecy surrounding physicians’ and hospitals’ billing practices may ultimately benefit us.  How quickly that will happen, however, is a big question.