24 Hour Hospital Stay: $126,000 bill!

THIS POST WAS WRITTEN IN 2013

When you spend the night in the hospital, you would assume you had been admitted to the hospital – but you could be wrong.  And this definition of your status could cost you thousands of dollars if your Medicare Advantage plan has a 20% co-pay for “outpatient surgery”.

I met last week with a man who went to Northwest Hospital to have stents put in his coronary arteries. Ralph spent about 24 hours in the hospital and he was  in a bed, in a room, overnight. So you would think he had been admitted to the hospital.

Ralph gave me copies of his bill from Northwest Hospital that showed his 24-hour stay cost $126,241.67!!!!

The biggest charge was $13,148 for “cardiology” services – and this charge was repeated 5 times on the bill.  I’m figuring he got five stents. The bill included a $3,049.01 charge for an “observation room”. And this “observation room” charge is why Ralph got burned.

Don’t have a heart attack,  Ralph didn’t have to pay that much!

The good news for Ralph, who is 86 years old, is that his Medicare Advantage plan had to pay only $14,093.04 of the $126,241.67 hospital bill. This is because Medicare sets the price for each service, and $14,093.04 was the total of “approved” charges associated with Ralph’s 24-hour hospital stay – or rather, his observation stay.

The $126,241 bill is a made up number – unless you don’t have insurance. Then this outrageous number is your starting point for negotiating how much you will pay for the medical care you received. This story is really about Ralph’s Medicare Advantage plan.

The bad news for Ralph is that his Medicare Advantage plan requires him to pay 20% for “outpatient surgery”, so he had to pay $2,814.48.

Medicare Advantage plans have a set co-pay for in-patient hospital care, which is $295 per day (days 1-5) in Ralph’s plan. So I would have thought his bill would be $590. But because the bill says he was in an “observation room”, Ralph had to pay a lot more.

Something to consider with Medicare Advantage:

What is the charge for “outpatient surgery” in your plan, or the plan you are considering joining? Most plans have a set fee of $150, $175, or $275 dollars for outpatient surgery or services. But Ralph’s plan says he must pay 20% for any outpatient surgery or diagnostic tests.  So he is stuck with a big bill because of how his Medicare Advantage plan is designed – and because Northwest Hospital never admitted him.

Hospitals are routinely “not admitting” patients so they can charge more money to Medicare and patients.

According to an email I recently received:

The Center for Medicare Advocacy has heard increasingly about beneficiaries throughout the country whose entire stays in a hospital, including stays as long as 14 days, are classified by the hospital as outpatient observation.  In some instances, the beneficiaries’ physicians order their admission, but the hospital retroactively reverses the decision.  As a consequence of the classification of a hospital stay as outpatient observation (or of the reclassification of a hospital stay from inpatient care, covered by Medicare Part A, to outpatient care, covered by Medicare Part B), beneficiaries are charged for various services they received in the acute care hospital, including their prescription medications.

 

  3 comments for “24 Hour Hospital Stay: $126,000 bill!

  1. Jay
    March 3, 2015 at 10:43 am

    How much for five nights stay for Afib? Dad has insurance. Just need a ballpark guesstimate.

  2. Editor
    March 3, 2015 at 11:02 am

    What insurance does your father have?

    If he has just Medicare, he might just pay the Part A hospital deductible which is $1,260. Or he might pay that plus 20% of the bills for the doctors who treat him. It all depends on whether or not his treatment is bundled under a certain Medicare DRG. But I don’t know about that.

    If you father has Medicare plus a Medicare supplement, he might not have any co-pay because the supplement (depending on which one he has) would likely pay the Part A deductible plus all of the 20% co-insurance for doctors.

    If your father has a Medicare Advantage plan, it depends which one he has. Some Medicare Advantage plans have a $300 + per day co-pay for a hospital stay while some plans have inpatient hospital co-pays that are $150 per day.

  3. Editor
    March 3, 2015 at 11:05 am

    One more thing about your father’s five-day hospital stay. Be sure he was admitted to the hospital, or he could run into the problem that Ralph in the story experienced – much higher co-pays because he was under “observation status” and not admitted to the hospital.

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