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Overcharging in Hospital Bills

Updated: Mar 25

In the United States as of 2016, there was roughly $81 billion in collective medical debt for all citizens, a portion of which can be attributed to the expensive nature of hospital bills that most patients receive. Much of this expense came not from services but from billing errors. Around 80% of hospital bills contain errors, which results in a combined 26.4% overpayment by the American public on medical services. The high hospital billing error rate is unfair to the population, and measures should be put in place to deal with the issues in the bills before the patient receives them.


While errors increase the expense of the bill, bills without errors have multitudes of other expenses attached, for example, billing under the most expensive procedures. Around 22% of individuals treated in the emergency room are treated by “out-of-network” doctors who commonly bill their patients under the most expensive codes. Not only that, but individuals also have to contend with list prices for services which can be up to three times the amount it actually costs the hospital to provide the service. These listed prices can change from region to region in the United States, making it cheaper to receive treatment in some states over others. For example, being treated for pneumonia in Anaheim, CA is $40,000 less than being treated for pneumonia in Tampa, FL. While standardizing across multiple states may not be possible, using the most expensive billing techniques should be highly prevented, and there should be better alternatives to hiring out-of-network doctors.


Hospital prices can also differ based on “balancing bills” and facility fees. “Balancing bills” is when a medical service provider charges more for medical services in hopes that the patient pays that price and it will balance out the hospital expenses on an unpaid medical bill. Facility fees, on the other hand, are fees for the facility in which the service was performed, and can range to be more expensive than the bill for the actual medical service. Unlike balancing bills and list prices, facility fees are often harder to challenge. Facilities no doubt need to be maintained, but for those living paycheck to paycheck, having a way to challenge the fees would decrease their chances of medical debt.


The expensive hospital bills and fees are out of the price range for many Americans, and while there are many steps hospitals should take to reduce their bill prices, there are also multiple steps individuals can take that would help them survive the healthcare industry with less or no debt. Statistically, negotiating with hospitals has about a 57% success rate. So individually, a patient can try to reduce their medical bill that way. Additionally, they could also research different medical facilities in order to compare procedural prices.


The patient may be limited in their abilities to lower their hospital bills, but legislation is able to limit overcharging in hospitals. Some states have already begun barring out-of-network doctors from balancing bills for in-network patients. Balancing bills in this way would lead to individuals in one region paying a higher price because of the inability of another patient in another region to pay their bill. States could also create legislation to address errors present on hospital bills. States must require thorough checking of hospital bills before they are given to patients who may or may not be able to catch the errors on their own.


Medical services can be life-saving. The cost of those services, on the other hand, can financially destroy a person or family. About 77% of Americans cannot afford a $2,000 hospital bill. Reducing the costs of medical services—both as individuals by doing research, looking for billing errors and negotiating, and as a society by implementing new legislation—will lead to a safer and healthier population. 


The opinions expressed in this article are those of the individual author.

Sources


“5 Tricks Hospitals Use to Overcharge and What You Can Do about It.” ClaimMedic, 8 June 2020, https://claimmedic.com/blog/5-tricks-hospitals-use-to-overcharge/


Booth, Stephanie. “Hospital Bills and Overcharging.” Healthline, Healthline Media, 21 May 2019, https://www.healthline.com/health-news/80-percent-hospital-bills-have-errors-are-you-being-overcharged


Mundy, Jane, et al. “Lawyersandsettlements.com.” Hospital Overcharging Lawsuit News & Legal Information, 17 Mar. 2020, https://www.lawyersandsettlements.com/lawsuit/hospitals_overcharging.html


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