Fifty hospitals in the United States are charging uninsured consumers more than 10 times the actual cost of patient care, according to research published Monday.
All but one of the these facilities is owned by for-profit entities, and by far the largest number of hospitals — 20 — are in Florida. For the most part, researchers said, the hospitals with the highest markups are not in pricey neighborhoods or big cities, where the market might explain the higher prices.
How to Keep Down Sky-High Hospital Bills: Don’t Pay
A small benefits consulting firm called ELAP Services is causing commotion by suggesting an alternative: Refuse to pay. When hospitals send invoices with charges that seem to bear no relationship to their costs, the Pennsylvania firm tells its clients (generally medium-sized employers) to just say no.
Instead, employers pay hospitals a much lower amount for their services—based on ELAP’s analysis of what is reasonable after analyzing the hospitals’ own financial filings.
For facilities on the receiving end of ELAP’s unusual strategy, this is a disruption of business as usual, to say the least. Hospitals are unhappy but have failed to make headway against it in court.
“It was a leap of faith,” when Huffines Auto Dealerships, which provides coverage to 300 employees and their families, signed on to the ELAP plan a few years ago, said Eric Hartter, chief financial officer for the Texas firm.
What he says now: “This is the best form of true health care reform that I’ve come across.”
Huffines first worked with ELAP on charges for an employee’s back surgery. The worker had spent three days in a Dallas hospital. The bill was $600,000, Hartter said.
Like many businesses, the dealership pays worker health costs directly. At the time, it was working with a claims administrator that set up a traditional, “preferred provider” network with agreed hospital discounts.
The administrator looked at the bill and said, “‘Don’t worry. By the time we apply the discounts and everything else, it’ll be down to about $300,000,’” Hartter recalled. “I said, ‘What’s the difference? That doesn’t make me feel any better."
Instead, he had ELAP analyze the bill. The firm estimated costs for the treatment based on the hospital’s financial reports filed with Medicare. Then it added a cushion so the hospital could make a modest profit.
“We wrote a check to the hospital for $28,900 and we never heard from them again,” Hartter said.
Normally, customers who don’t pay bills get hassled or sued. This sometimes happens to ELAP clients and their workers. Hospitals send patients huge invoices for what the employer refused to pay. They hire collection agents and threaten credit scores.
ELAP fights back with lawyers and several arguments:
How can hospitals justifiably charge employers and their workers so much more than they accept from Medicare, the government program for seniors?
How can hospitals bill $30 for a gauze pad?
How can employee-patients consent to prices they will never see until after they’ve been discharged?
DYI Comments: WOW! A billing from $600,000 then to $300,000 to a final payment of $28,900! I wonder how many business' just rollover and accept the $600,000 payment? A $571,100 over payment has made these hospitals into cash cows providing managements and CEO's multi-million dollar bonus'. Don't get me wrong I'm all for the free enterprise model but this is nothing more than out right fraud. What is needed is for the health care industry to come under anti-trust and competition laws. When that happens prices will drop 70% to 85% only then would an individual need catastrophic health insurance at the cost of full coverage car insurance for a family of four.
How long will the American public put up with this nonsense? Once they learn how much they are being ripped off; only then will the tide turn for true reform. Hopefully the ELAP Services company model will grow legs with other benefits services companies jumping in as well. Don't be surprise to see these medical companies flood our politicians with bribes campaign dollars in an attempt to outlaw companies such as ELAP Services and their imitators out of existence.
DYI
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