Canadian moved to US - Hospital charges for ER / ICU visit

Question

Pretty new to US - came down from Canada recently. So, not used to the medical/insurance system here since everything is free up in Canada!

My daughter had to go to ER a few weeks ago (in ambulance), and she was transferred from the ER of first hospital to ICU of Stanford's children's hospital (via another ambulance) b/c the first hospital was not equipped to deal with her.

The bills are starting to roll in (via insurance provider), and the first shady bill was related to an ambulance charge where my insurance provider has stated that the "out-of-network" provider has billed ~$10K but the insurance provider feels ~$2K is the "Recommended amount" that should be paid given what service entailed. My policy covers $100 flat fee for emergency transportation. Funnily, there is no field for "how much I owe" as in other letter's I received - and just a "recommended amount" to be paid, without really saying explicitly that I MUST pay it. Are these guys hoping that I hadn't read my policy and I didn't see the nuances in their letter and hoping that I would just "pay" $2000? Or maybe it's just a case of them not writing their "for your information" letters sufficiently clearly?

The second "issue" is related to the hospital room/board. If it's an emergency room stay, I need to pay a flat fee. However, if it's a hospital stay / hospital room, I need to pay a co-insurance fee as a percentage - which is a few thousand dollars. My daughter was for the most part in ICU - and not the regular hospital wing. Does ICU typically fall on the ER side of the fence or the "regular room" side of fence?

Also, as a point of general interest, the hospital has billed like 110K for the stay, while the insurance provider has "negotiated" this to around 30K.. Weird. So, if someone doesn't have insurance company that will negotiate on their behalf, does such a person end up paying 110K?!

Thanks everyone.

Answer 1

Health insurance is often as convoluted as you discovered. My wife had an endoscopy (they look inside your stomach for issues, with a scope). Cost? $20,000. Insurance said it was worth $2000 and we had a $200 copay. The uninsured person either negotiates to get that cost down closer to the same $2000 or is chased for the full amount, often destroying their financial life.

In your case, you have insurance and started out doing the right thing. When entities not on your plan somehow get in the mix, out of your control, you should enlist the help of your own insurance company to negotiate. If I were you, I'd expect to pay the rate these guys accept from the insurance plans they are on as it's not your fault the hospital uses their service. $10000 for a single ambulance ride? The $100 is probably too low for the expertise required, but $10000 is unreasonably high, in my opinion.

Answer 2

Look at the insurance company's paperwork, and/or wait until you are actually billed, to find out what your real out-of-pocket costs will be. The initial numbers from the hospital may not reflect either the insurance company's "negotiated prices", or the insurance company's share of those reduced costs.

I recently saw a case where the "full price" cost would have been on the order of $80,000 but the amount billed to the patient was closer to $8000. And that was a high-deductable insurance plan; with a lower deductable the patient would have paid more for insurance but less for the emergency.

When dealing with American health insurance there often are cost differences for in-network versus out, related to negotiation of how much discount a doctor (or other service) is willing to give in order to be considered part of the network. This is one of the things to look at when comparing the terms of different insurance plans, along with the percent covered for various things, the deductable if any (note that discounts may not kick in until the deductable has been met!), and the annual out-of-pocket maximum (after which the coverage goes up to 100%).

Yes, it's a gawdawful mess. For historical reasons America does not have a health system; we have a health insurance system... and the insurance companies zealously defend their rights to profit from that arrangement, making it hard to correct that mistake.