Published: June 22, 2012
Getting Lost in the Labyrinth of Medical Bills

Ask Jean Poole, a medical billing advocate, about her work helping people navigate the bewildering world of medical bills and insurance claims, and the stories pour out. There’s the client who was billed almost $11,000 for an 11-minute hand surgery. The cancer patient who was charged $9,550.40 for a round of chemotherapy he never received.

....... Though the couple had two insurance policies — one through Medicare and a secondary policy at Blue Cross Blue Shield — they still received more than $25,000 in medical bills and another $65,000 from the nursing home. And some of them threatened collections if they weren’t paid within days.

“The charges have no rhyme or reason at all,” Gerard Anderson, director of the Center for Hospital Finance and Management at Johns Hopkins Bloomberg School of Public Health. “Why is 30 minutes in the operating room $2,000 and not $1,500? There is absolutely no basis for setting that charge. It is not based upon the cost, and it’s not based upon the market forces, other than the whim of the C.F.O. of the hospital.”

“The insurers negotiate a different rate, and if you are uninsured, underinsured or out of network, you are asked to pay full fare.”
With the exception of Medicare and Medicaid, experts say, the amount paid for services — or the price your insurers pay — is based on the market power of the insurance company on the one side and the hospitals and providers on the other, and the reimbursement agreements they ultimately reach. So large insurers that command a lot of market power may be able to negotiate lower rates than smaller companies with less influence.

President Obama’s Affordable Care Act, the health care overhaul law passed in 2010, tries to make some improvements (though the Supreme Court is expected to rule whether all or some of the law is constitutional this month). But while the law’s changes help you shop around for insurance policies — specifically through its new

Then, when the $132,000 hospital bill came, the patient was told he owed $9,200 and it had to be paid in 10 days. As it turns out, only one of the insurers had paid its share, which was hard to decipher from the bill. Ultimately, the patient only owed $164.99. “There were three explanation of benefits from Blue Cross Blue Shield, each with an different amount due,” she said, ranging from about $164 to $81,900. “How’s that for confusion?”

All told, Ms. Poole spent about 96 hours dissecting each bill, line by line, comparing it with the providers’ medical records and keeping track of it all in a complex spreadsheet.

“It’s a broken system,” she said.