HOSPITAL BILL FRAUD ALERT: Man Has Same Procedure Twice at the Same Hospital, Gets Two Different Prices: $339 and $3,484
George Hahn of Malvern, Pennsylvania, had two echocardiograms from Paoli Hospital, using the same exact insurance only one year apart and received two drastically different bills. The first year, the procedure cost $339. The next year, the same exact procedure cost $3,484.
How is that possible? Did the cost of an echocardiogram grow over 928% in just one year? No, however, the explanation may be just as infuriating.
For his first echocardiogram, the scan was administered by an independent cardiology group with offices at Paoli Hospital, the second scan was administered by the hospital itself. Both the cardiology group and hospital were in his insurance’s network, however, both charged drastically different rates.
After his first scan in February, Cardiology Consultants of Philadelphia’s office at Paoli Hospital had billed Hahn’s insurance plan $1,335. The second scan, administered by Paoli Paoli billed his insurance $3,484. That’s a surcharge of over 160%.
Currently, Hahn has only paid $500 toward the over $3,000 he owes to Paoli Hospital.
Why Are Hospital Bills So High?
As we have mentioned before, hospitals are businesses that are typically owned by larger publically-traded hospital management companies that make upwards of billions of dollars a year in revenue. Make no mistake that these hospitals are all run to turn a profit for their shareholders, even if that means charging 600% to 1000% over the retail value of medical services provided; in other words, charging well and above the reasonable and regular rate.
Hospitals often argue their overhead in staff, equipment management, emergency care are all reasons why they charge so much, however that likely is not the case. Dr. David Belk has researched further into other reasons why hospitals continue to overly inflate costs of service. His conclusion is that major insurance carriers pay hospitals a certain amount for every given medical service. These prices are negotiated differently depending on the carrier, so to ensure that they are paid at a net profit, hospitals charge an exuberant amount knowing that they will likely never be paid at that amount, but only at a fraction high enough to yield a profit.
The problem with this model is that if hypothetically, a patient does not have insurance, they may be on the hook for the entire inflated bill.
Here is Dr. Belk explaining his findings:
From Dr. Belk’s Website: truecostofhealthcare.net
Even worse, if you’re ever in a car accident, a hospital may file a hospital lien on you for the full amount of the bill, potentially ruining your credit and eviscerating your personal injury settlement.
As any of this legal?
In Texas, if a hospital files a hospital lien on an individual with a bill that is well and above the reasonable and regular rate, they would actually be breaking the law, however, until further legislation helps to curb and ultimately put a stop to the outrageous price gouging hospitals are committing daily, there is very little any private citizen can do to keep hospitals from charging extremely inflated prices for their services.