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Asking for an Itemized Hospital Bill Could Save You From Crippling Debt

But when you look into why, the immense failures of our medical system become disturbingly clear

Sporadic, but minor chest pains had been bothering my girlfriend since the beginning of quarantine. She occasionally complained about a slight tightness in her chest, but was generally reluctant to seek medical attention, in part because hospitals and urgent cares are intimidating places to be — especially during a pandemic — but also because medical care is notoriously expensive (and she felt mostly healthy).

Then, less than two weeks ago, she had a notably uncomfortable morning. She keeled over, clutching her chest, numerous times during a routine morning jaunt with our dog, so we finally decided that, despite us confronting a coronavirus-burdened health-care system, she needed medical attention. We promptly called a few local urgent cares to confirm that they accepted her insurance, but chest pains, they explained, are best treated at emergency rooms, and they may very well end up sending her there, anyway. So we dialed our nearest emergency room — again, firmly establishing that they accepted her insurance — and less than half an hour later, she was having her vitals checked by a nurse.

She was in the emergency room for less than two hours, during which time they performed a blood test, fastened her with electrodes and executed an X-ray of her upper body. They eventually concluded that she likely pulled a muscle in her chest while lugging tile around at work, and that a daily dose of aspirin should make everything better. She followed their advice and has indeed been feeling better ever since.

That is, until this past Friday, when her medical bill arrived. It stated that her brief trip to the hospital on that fateful day cost approximately $8,500. Her insurance kicked in, covering about $3,000, leaving her to deal with the remaining balance of $5,434.49 — a shockingly high price tag that could easily send any recipient right back to the hospital with a whole new assortment of pains.

When we received this bill — which, without delving too much into our finances, is capable of wiping out our combined savings or putting either one of us into debt — I was reminded of how many times I scrolled past a tale just like this on Reddit, where someone was charged an exorbitant amount for essentially getting checked out at a hospital. Among these threads, a steady stream of comments inevitably advises that the posters request an itemized bill, which they claim can result in a substantially lowered charge.

Desperate to have this bill reduced (or ideally, squashed altogether), we already made calls to the emergency room, have an itemized bill at our disposal and are still in the process of making some kind of deal. But in the meantime, I decided to look a little deeper into why something as simple as asking for a more detailed bill can have such a dramatic impact — and David Hyman, health-care financing researcher and co-author of Overcharged: Why Americans Pay Too Much For Health Care, confirms that it really can.

As Hyman explains, “First of all, lots of things in the health-care system run on autopilot, including generating bills. Those bills are never typically touched by human hands, so if you ask for an itemized bill, usually at some point someone’s going to actually have to look at it, and they may say, ‘Well, wait a minute, this doesn’t make sense,’ and they’ll strike some things out.”

This fact-checking of your bill applies to your side of things, too. Per Hyman, “The other advantage of the itemized bill is that the patient can look at it and say, ‘Wait a minute. There are a series of problems here. You billed me four times for the same thing, and I didn’t get it at all. Or this chart seems excessive relative to what you actually provided.’ It provides a tool kit for the customer to check things.”

Such an explanation of why asking for an itemized bill may result in you owing less is, of course, ridiculously frustrating: Essentially, hospitals are leaving their bills — frequently massive, life-altering bills — to a series of codes and impersonal programs that pump out a charge, which may or may not be entirely correct and has almost zero regard for the person being charged.

But it gets even worse. “The other thing that happens, which is a distinct issue from itemized bills, is hospitals price things at what people in the hotel business call rack rates,” Hyman explains. “There’s an artificially high price point, then private insurance basically comes in and says, ‘That’s nice, but we’re only going to pay you this much.’ So the discount off of the rack rate is huge.” By discount, Hyman is referring to how much the hospital may be willing to knock off their initially overpriced bill.

Or as Hyman puts it more bluntly, “The numbers on the bill are frankly phony baloney. Almost no one ever pays those numbers, so in asking for the itemized bill, what you’ll often discover is that the hospital will say, ‘We know these numbers aren’t real. Let’s talk about this as a starting point for negotiation. We’ll cut 50 percent off to get you to a more realistic number.’” While them cutting you a deal might sound nice, remember, they have no problem accepting any and all money from people who receive a huge bill and may not have the foresight to make a call before paying up, and even with a discount, you may still be facing a seriously hefty charge.

As for why these bills are so expensive in the first place — especially for something as seemingly small as getting a few tests using machines the hospital already owns — Hyman says part of the blame can be put on what are called trauma activation fees. “You can basically think of them as the cover charge for going to the hospital emergency department,” he explains. “They say, ‘Anybody who we decided has a trauma that requires us to initiate our protocols, we’ve got a set cost.’ So you get some crazy numbers, like a person who was in a bike accident and has a skinned knee: The ambulance people insist on taking them to the hospital, then the hospital insists on charging them $12,000 for a trauma activation fee.”

In other words, a trauma activation fee is essentially a charge that accounts for the emergency room having emergency treatment at your disposal, whether or not you actually need it. For example, my girlfriend was hit with an “emergency services” fee of $3,884.48, which according to this explanation, is basically her paying for some undisclosed emergency procedures they could have taken if she did indeed have a medical emergency related to her chest pains while she was at the hospital. 

“That’s the sort of thing that hospitals, when you shine a spotlight on it — often with media coverage — say, ‘Well, it’s hard for us because we have to keep all these services available when people need them,’ and that’s true,” Hyman says. “But when they control who gets hit by a trauma activation fee, they’re not necessarily as careful as they ought to be in only charging people with real trauma.”

And when we expect professionalism and adherence to some kind of transparent system from hospitals, the fact that patients need to ask for a purposefully overcharged, itemized bill to then check for mistakes becomes less of a hot tip to save some cash and more an indication of a truly flawed system. If you want to know why hospitals are allowed to get away with any of this, Hyman says, “Mostly because they can. It’s not a satisfying answer. It’s an infuriating answer. Hospitals don’t view their patients as their customers. They view the insurance companies and the government as their customers. So guess what? If you’re not their customer, they don’t have any particular interest in making you happy.”

To emphasize just how messed up it is to allow hospitals to run freely like this with their billing, Hyman points me toward the law of salvage, a maritime law that essentially prevents boaters from striking random, exceedingly high compensation deals with other boaters while they salvage their sinking ships. Instead, the law requires that compensation be given based on what was saved, at what level the salvage was a success and so on. But our health-care system is much less consistent, forcing whatever charges on people in need of help without all that much regard to what actually happens during the process. “The billing practices in marine salvage are more legitimate and justified than the health-care system,” Hyman explains. 

To push this point even further, Hyman also sends me a tidbit from an article he wrote on this very premise:

“Under admiralty law, courts will not enforce a bill for marine salvage that exceeds the market value for the services in question. Knowing this, everyone uses a standard form contract and disputes over billing are uncommon. What does it say about the medical profession that its billing practices would not pass muster if brought before a court handling a dispute over marine salvage?”

Nothing good, frankly.

In any case, whatever we end up having to pay, being faced with a bill like this has a dangerous side effect that goes far beyond money. Ever since receiving this bill, my girlfriend has been repeating, “I’ll never go to an emergency room again.” 

And I know she’s far from alone in feeling that way.