The doctor’s face told Toni Mayes everything she needed to know.
“He looked really sad and he looked really scared,” said Mayes, 59, of Palm Beach Gardens, who had no insurance then.
Her diagnosis: invasive ductal breast cancer.
Without insurance, patients can be responsible for hospital charges 10 times higher than people on Medicare or private insurance, according to hospital charge data released for the first time.
In Mayes’ case, treatment for one of the most common forms of breast cancer could reach $100,000, depending on the cancer’s stage and the need for chemotherapy or radiation.
In an effort to shine light into the murky world of hospital billing, the Centers for Medicare & Medicaid Services have released data showing how much is charged and how much Medicare paid for the 100 most commonly billed procedures in 2011 at 3,000 hospitals across the United States.
The data reveal that patients who have no one to negotiate on their behalf are more likely to be saddled with what advocates say are bloated charges, designed to be a starting point for negotiation between hospitals and private insurers, or set by Medicare.
In Palm Beach County, hospitals routinely charged six to eight times the Medicare rate, and as high as 12 times the rate.
Take a simple-sounding diagnosis, like chest pain. Columbia Hospital (now West Palm) billed $34,109 for the treatment. Medicare reimburses only $3,763. A private insurer would likely pay closer to $5,000.
Or look at dizziness or vertigo. Delray Beach Medical Center charged $41,182 to treat it. Medicare paid $3,654, less than a 10th of the full rate.
In Palm Beach County, Columbia Hospital, Delray Medical Center, JFK and Palms West each logged charges that were at least nine times greater than the Medicare rate.
“The patients who will get the bills for the full amounts are the uninsured, in many cases the most vulnerable in society,” said Brian Cook, a CMS spokesman.
The hospital industry argues that few patients are expected to pay full charges.
Hospital billing is important because families of 54 million Americans struggle to pay medical bills, according to a report released this month by the U.S. Centers for Disease Control and Prevention, using 2012 data. That number dropped slightly from 2011. Analysts fear fewer people in medical debt indicates that fewer people are getting medical treatment, in part because they may not have a job or employer-sponsored health care.
In Palm Beach County, about one in five residents has no health insurance, according to the county health care district.
The American Hospital Association argues there is no discrimination in billing. Every patient is billed the same charge, regardless of whether they have insurance, said Caroline Steinberg, a vice president at the association.
Each hospital has a master list of prices, derived from something called a chargemaster, which dictates what the hospital bills for supplies, drugs and every treatment involved in caring for a specific diagnosis.
The chargemaster represents the “kitchen sink” method of billing, said Dave Belk, a California internist who runs a site called truecostofhealthcare.org.
Different insurers and the government cover costs differently, so to ensure they get paid no matter the reimbursement criteria, Belk said, hospitals pile in any charge they think an insurance company or the government might pay.
Medicare rates are set by the government. Hospitals benefit because the government promises volume. And a private insurance company with a large share of the market gets a better rate because it agrees to include a hospital in its network.
People who have insurance are not immune to the effects of the chargemaster. If the hospital begins the negotiation with the insurance carrier at a higher price, even when the insurer haggles for a discount, it could end up paying more than if the hospital started with a lower price, said Robert Laszewski, a former health insurance executive and president of the consulting firm Health Policy and Strategy Associates.
“It’s not a harmless little exercise here,” he said.
Linda Quick, president of South Florida Hospital & Healthcare Association, describes the conversation between insurers and hospitals as “wheeling and dealing, like you would do at a flea market.”
The insurer argues the care costs less than the hospital is charging. The hospital says yes, but not as little as you think. They haggle, and the insurance company ends up agreeing to pay far less than the raw charge price, but more than Medicare pays.
The uninsured don’t do as well at the health care flea market.
“They are a single buyer, so they don’t have any pull,” Quick said.
But the raw charges come from real costs that include everything needed to provide care: supplies, the workforce, the building’s mortgage, lights, administration, cleaning crew and food service, Quick said.
“Like any business, even a not-for-profit institution has to have more revenue come in than they have go out,” she said. “They charge something over and above the cost.”
Pat Palmer makes her living fighting her clients’ hospital bills and other medical charges as founder of Medical Billing Advocates of America. It is a fast-growing industry that serves uninsured clients as well as people who have plans with flimsy coverage or high deductibles that must be met before the insurer kicks in.
Palmer’s clients have brought her bills that charge three times for use of the same equipment, she said.
‘No rhyme or reason’
The bill might contain $150 a minute for the use of an operating room. Then there’s a separate charge for the ventilator or every piece of equipment, at least some of which ought to be covered in the room rate. Then the patient is also charged for a kit that contains much of the same equipment that the patient was billed for both separately and in the room rate.
“There’s no rhyme or reason for that amount,” Palmer said.
Looking at the charges is misleading because most patients do have insurance, and thus don’t pay the full charge. And for those who don’t, hospitals often provide charity care, said the AHA’s Steinberg.
A number of Palm Beach County hospitals agreed.
Among county hospitals, Delray Medical Center showed the greatest disparity between what it charges and what Medicare pays. For at least five diagnoses, from dizziness to circulatory problems, the hospital charge was 10 times higher than the Medicare reimbursement rate.
While full charges show up on the bill, the hospital cuts the price for uninsured patients close to rates paid by those with private coverage, said a spokeswoman for Tenet Healthcare, which owns Delray Medical Center.
But when asked to provide the specific uninsured rates for those five procedures in which the charges seemed particularly high, spokeswoman Shelly Weiss said she could not.
Costs depend on health
That’s part of the problem for those uninsured people who need to know just how much debt they are going to assume before they can be treated.
“There’s really no clear way to give you a black and white answer,” Weiss said.
One reason, she said, is that a knee replacement will cost less for a healthy patient who plays tennis and is in and out of the hospital in three days. A 90-year-old who is overweight, diabetic and requires a more complicated treatment could end up in the hospital for 20 days, she said.
“It’s not you walk into a store and buy a knee replacement and it costs ‘X,’ ” she said.
Medicine is more complicated than going to a grocery to buy a carton of eggs, Weiss added.
But Holly Wollack, a Miami-based advocate who helps clients negotiate medical bills, said Americans would not tolerate it if grocery shelves contained no prices above the canned goods, no scales in the produce section.
“Would you go to the supermarket and fill up a cart of groceries and then take a ticket from a scanner for ‘food, paper goods, and other’ and they ask you to pay $116?” she asked. “People do it at hospitals every day.”
Billing one patient more than another is nothing new. It’s among the primary arguments for buying health insurance. The massive spread between the cost for people with insurance or Medicare and those without it, however, has raised concerns in the Obama administration.
Under the Affordable Care Act, nonprofit hospitals are no longer permitted to charge these list price fees to patients who qualify for financial assistance.
The catch, though, is that hospitals are permitted to set their own policies about who qualifies for financial help.
Patients receiving treatment at for-profit hospitals, like most in Palm Beach County, have no government safety net to keep them from being charged whatever price a hospital sets.
Some for-profit hospital chains that operate in Palm Beach County have made commitments on their own to cut rates for the uninsured.
Tenet hospitals, which along with Delray Medical, include Palm Beach Gardens, Good Samaritan, St. Mary’s and West Boca , have a “Compact With the Uninsured.” It’s a promise, essentially, to bill them almost as if they have insurance.
The company announced the policy after it was sued in California by an organization representing uninsured Latino patients who claimed they were charged up to seven times more than what the company billed insurers for similar services.
At Jupiter Medical Center, a non-profit hospital, its full charges are still several times the Medicare rate. But the hospital charges what appears to be less markup than many others here.
To treat a gastrointestinal disorder and infection, the hospital’s full charge was $38,526. JFK Medical Center charged $56,901 for the same procedure.
One reason, said JMC President John Couris, is that his hospital is not part of a large chain that might have the upper hand with insurers.
“The larger systems become, the more hospitals systems acquire, the more geography they cover, the more clout they have with managed-care companies,” he said.
“That tends to drive costs up — not down,” Couris said. “That’s what happens in our industry.”
For patients who can’t afford the hospital’s charges, Jupiter offers an uninsured discount that ranges from 25 percent off the full charge to free care. A single patient whose income is below $1,915 a month would get free care. Someone who earns twice that qualifies for a 25 percent discount.
Anyone who can’t pay their bill can work with the hospital’s financial counselors, who try to help patients qualify for insurance or charity care. Those with certain diagnoses, such as breast cancer, are assigned a nurse navigator who walks them through financial and emotional struggles.
Working with uninsured patients can be particularly difficult because some don’t have permanent homes, reliable access to phones or all the paperwork they need to qualify for help.
Nurse Navigator Terry McNeill said she has faced virtually every dilemma associated with a patient who doesn’t have the money to pay for treatment.
“I, usually by hook or good crook and a prayer to the Good Lord, can get them care, get them something,” she said.
But some patients simply get stalled by the fear associated with a new diagnosis.
“We don’t just turn and run away from people,” McNeill said. “We will try to help.”
Uninsured county residents can also turn to the Palm Beach County Medical Society. Its Project Access works with doctors and hospitals to offer free treatment for those with no other option. The program has served 7,000 patients and offered more than $9 million worth of care, including open heart surgery, colonoscopies and other diagnostic testing, since 2005, said Tenna Wiles, the society’s chief executive officer.
It has become more difficult for the society to arrange pro bono care from local hospitals in recent years, Wiles said.
Hospitals are under increased financial pressure, said Quick of the South Florida Hospital & Healthcare Association.
Hospitals agreed to give up $155 billion in funding, expecting to make it up as states added millions of Americans to the Medicaid rolls, under the Affordable Care Act.
Florida opted out of the Medicaid expansion, so hospitals here face shrinking reimbursements without the added Medicaid money.
The law also focuses funding on preventive care, hurting hospitals that make money from “heads in beds.”
Hospitals should not be faulted for expecting patients to pay full charges, Quick said.
Some of the primary opposition to the president’s health care program came from Americans who did not want the government telling them they had to spend their money on health insurance, she notes. Those are some of the very same people who do not buy insurance.
“It’s an ideological decision,” she said. “We don’t assume that everyone who is uninsured is in need of charity.”
Mayes, the woman diagnosed with breast cancer, had a grant to pay for the mammogram and biopsy at Jupiter Medical.
Everyone in the office was supportive, Mayes said. But she left without many answers.
“They did not say how fast, what stage, what’s the next step,” she remembers. “They just said we can’t help you; you don’t have insurance.”
Hospitals are not obligated to treat patients without insurance unless their condition is immediately life-threatening.
The hospital did connect Mayes with a nurse navigator.
Mayes got health insurance this month, but has had no treatment since her April diagnosis.
Palm Beach Post Staff Researcher Niels Heimeriks contributed to this story.
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