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Medical billing: a real mess


Philadelphia -- EVER SINCE I wrote about a man who thought his mother's medical bills were outrageous enough that someone should be arrested, two things have happened.

Doctors have called or written to tell me I don't know what I'm talking about. And more patients have called or written to tell me about their own outrageous medical bills.

At first I thought this additional information might make it easier to understand medical billing, collection and reimbursement.

I was wrong.

After additional research, I can now speak with some authority when I tell you the system is a mess, and even more subject to abuse than I imagined.

Let me back up.

The column I wrote was about a Philadelphia man named Joe whose 80-year-old mother, who has dementia and a bad heart, fell down a flight of steps in their home.

After a $375 bill for dialing 911, Joe's mother ran up a $13,341 tab for one week in a Philadelphia hospital despite having no surgery or any other major medical procedure.

It was $7,980 for the room. It was $430 for her daily pills, and $1,700 for X-rays and a CAT-scan. There was a $167 charge for the cast room -- though no cast was applied.

Two other things:

I'm in a bit of a bind here because I promised Joe I wouldn't use his mother's name or the name of the hospital and doctors, because he's afraid they'll take it out on his mother next time. But I did use the charges from the hospital statement, and that was what had doctors working themselves into a lather.

What the hospital and doctors charge, they all said, and what they are reimbursed by insurance -- Medicare in the case of Joe's mother -- are different things.

Dave Sayen of Medicare confirms this. But that doesn't exactly let everyone off the hook.

The $7,980 room charge for seven days breaks down to $1,140 a day. And unless the room comes with catered meals, complimentary champagne and season tickets to the opera, where does the hospital get off charging an arm and a leg, so to speak?

Are there some patients, or insurance companies, actually paying $1,140 for a bed or $430 for Tylenol?

One doctor told me charges like those are part of what is known in the business as cost-shifting. Because many people can't afford full charges, a hospital balances its books by overcharging people who can.

To make it all the more muddled, Medicare and other carriers have standard compensation for something like, say, a heart attack. They'll pay X amount whether the patient is in the hospital one day or 10 days, a determination that might be influenced by hospital budget considerations as much as health.

All of which, it seems, makes it virtually impossible for a consumer to answer an essential question.

What are the real medical costs?

Dave Sayen says Medicare pays what it considers to be the actual cost. But doctors say Medicare generally covers only 39 percent of their actual cost.

Whom do we believe?

If doctors are hurting, why are so many of them in BMWs and Mercedes?

If hospitals are ailing, how are so many of them swallowing nearby properties and erecting new wings?

If insurance companies can't cover this treatment or that, why are their premiums and their assets both in the clouds?

With a bazillion doctors and just as many health plans, how do we manage to keep nearly 40 million Americans uncovered?

And what is the public cost, in time and money, when this many doctors, hospitals, insurance companies, lawyers and accountants give us charges that aren't quite real and explanations that aren't quite sane?

Dr. Philip G. Vitelli, a surgeon in Norristown, Pa., offered this observation on Joe's bill.

"Aetna, the carrier for Medicare, is obligated to do the billing that way, so a patient thinks a hospital has been paid all the money it billed when in fact that's not true and a patient never sees what was actually paid. The dollars on a statement have nothing to do with anything."

We're on top and still climbing, folks. Why bother with something as convoluted as health-care reform?

Steve Lopez is a columnist for the Philadelphia Inquirer.

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