Hospital Billed Charges

You may have heard the term “hospital billed charges” and wondered what was meant. Well, I have a great example!

Recently, I had a Pacemaker procedure where a Pacemaker was installed into a pocket that was made in my upper left front chest. Two electrodes were run to my upper and lower heart chambers, to regulate my pulse. My pulse had been running in the 50’s and the Pacemaker was set to increase that to the 60’s. I also have AFib, an occurrence where my heart beats irregularly. The Doctors believed that the Pacemaker was the first thing that was necessary, in order to attempt to resolve these issues.

I had the procedure at the main hospital of UVA Health in Charlottesville, Va. The entire procedure took approximately 3 hours, and after-care another 3 hours, and then I was able to go home. Essentially, an “outpatient” procedure.

I have Medicare Part A, B & D insurance and I also carry a Supplemental insurance plan. Medicare A is for Hospital, B is for Medical & D is Pharmacy. Medicare pays 80% of their approved charges on A & B. Supplemental Insurance, with a Private Carrier, pays the remaining 20%. As a result, if you use a provider that accepts Medicare A & B, you are never out of pocket, as your supplemental plan will cover the balance.

I just received a Medicare Summary Report from the Centers for Medicare & Medicaid Services , a Department under the United States Department of Health & Human Services, detailing the cost for this procedure.

There were two sets of charges, one was for the Doctor’s services and the second for the procedure. The Doctor’s charges totaled $1,543., of which $501.62 was approved for payment. However, Medicare paid $394.77 and my Supplemental paid $100.32. for a total of $495.09. The notes, for why they didn’t paid the full $501.62, indicate that the amount Medicare paid was “reduced due to federal, state & local rules.” Whatever that means!

The second set of charges totaled $63,115.65. Medicare approved that amount. However, Medicare only paid $8,165.53 and Supplemental paid $1,632.00 for a total of $9,797.53. The notes indicated that payment for some of the charges are included in another payment and that the amount Medicare paid was “ reduced due to federal, state and local rules.” I reviewed the charges that made up the $63,115.65 and here are some of the details:    

Pacemaker –dual chamber-

Rate responsive-Billed $23,164.00 -Approved -0-

Lead-Pacemaker-other than

Transvenous Billed $14,486.00-Approved -0-

Insertion of Pacemaker Billed $20,471.00-approved $20,471.00 -Paid $8,165.53

As you can see, only $8,165.53 was approved. There were also a lot of other small charges. They included: catheter-guiding infusion-$1,234.00; introducer/sheath guiding -$1,116.00; use of a drug to induce depression of consciousness by a physician performing procedure-$181.00; use of a drug to induce consciousness by physician performing procedure –each additional- $395.00; and multiple injections of various medicines -$12.32 to $80.00.

It should be noted, that the amount that UVA Health billed, is considered “Billed Charges.” Fortunately, I have Medicare insurance and Medicare does not pay billed charges. They pay based upon a cost per procedure that they have deemed “reasonable.” The cost per procedure that Medicare pays, may not be considered reasonable by the provider, but if you want to see Medicare patients, that is how you will be paid.

Private insurers also have negotiated costs, per procedure, with providers, regardless of what the provider bills the insurer. The larger issue is that if you are uninsured, you will be billed at billed charges, and therefore, many are forced into bankruptcy, because they are unable to pay these inflated costs. There has been a push to require the providers not to bill the uninsured more than what a normal insurer would pay. This would appear reasonable but this approach is still in limbo. There is no legislation requiring this, and as a result, providers still bill the uninsured , “billed charges.”

The above example illustrates the issues that continue to confront providers and Insurers. Another example, that leads to the disarray in the healthcare system today.

Jess Sweely

June 30, 2024

Madison, Va.