“Surprise, surprise, surprise!”—as Gomer Pyle was fond of saying.
There’s yet another surprise medical bill scam that most patients probably do not know about. It is hospital-affiliated urgent care centers that are billed as hospital outpatient departments.
I often tell the story of the time my wife almost got a CT scan at a hospital outpatient clinic. My wife’s share of the bill after her deductible was met was going to be $2,700. I quickly found a free-standing radiology clinic that accepted her insurance and charged $403. My wife didn’t realize prices vary and hospitals charge the highest price. I explained to her you never want to seek care at a hospital if you can avoid it.
Urgent Care at Hospital Prices
A physician writing in The New York Times found out the hard way. Danielle Ofri’s daughter was still limping a week later after a bike accident. Ofri took her daughter to an urgent care center for an ankle and wrist X-ray. She chose an urgent care center because they are (usually) good values. When care is needed in a hurry, but the condition is not serious enough for an emergency room, urgent care centers are the place to go. Then, Ofri got the bill.
“The radiology charge from NorthShore University HealthSystem for the ankle and wrist X-rays was $1,168, a price that seemed way out of range for something that usually costs around $100 for each X-ray,” wrote Ofri. “When I examined the bill more closely, I saw that the radiology portion came not from the urgent care center but from a hospital, so we were billed for hospital-based X-rays. When I inquired about the bill, I was told that the center was hospital-affiliated and as such, is allowed to charge hospital prices.”
Outpatient Clinics = Moneymakers
Just as hospitals began buying physicians’ offices so they could control the physician’s pen and charge facility fees for physician visits, they also saw money to be made in urgent care centers.
Let’s say you sprain your ankle but don’t really need an emergency room. You seek out a free-standing urgent care center only to receive a bill that’s three, five, or maybe 10 times what you expected because a hospital owns the facility and bills like you went to a hospital. Did the hospital warn you ahead of time? Probably not. As crooked as this sounds it’s not illegal. Hospitals have enough lobbying clout that Congress won’t stand up to them.
Ofri said she discovered the same billing practices happen when patients undergo outpatient procedures that are associated with a hospital, like colonoscopies. “One study of pricing revealed that HOPD (hospital outpatient departments) charged an average of $1,383 for a colonoscopy, compared with the $625 average price at a doctor’s office or other non-HOPD settings,” wrote Ofri.
Site-Neutral Payments, Less Competition
As a doctor, Ofri knew she should avoid hospitals when seeking non-emergency care. Yet, she was unaware of hospital-affiliated urgent care centers that charge hospital prices. So, how is the average patient supposed to know?
There is a policy debate about site-neutral payments, which would require Medicare to pay the same fee regardless of where a service is performed. Whether that would help non-Medicare patients avoid surprise medical bills is debatable.
Hospitals have been allowed to consolidate in recent years such that all major metropolitan areas are now dominated by several health care systems that function like cartels. They are buying physician practices and are now buying urgent care centers and other office-based facilities and raising prices.
Congress needs to enforce greater transparency, so patients are never caught off guard by faux hospital services. In years past, many states had laws banning the corporate practice of medicine, which is when corporations employ doctors to work on their behalf. It may be time to revisit that doctrine.
Devin Herrick, Ph.D. (devonherrick@sbcglobal.net) is a health care economist. An earlier version of this article was published on the Goodman Institute Health Blog. Reprinted with permission.
