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Hospital Stay

 Let's face it, hospital stays are full of unfamiliar terms and confusing procedures. From wearing a hospital gown and settling into a small room that you may share with a stranger to understanding your diagnosis and treatment, many patients feel overwhelmed. To make matters worse, your confusion may continue even after you have been discharged and sent home. Weeks pass, life returns to normal, and then one day there it sits, waiting in the mailbox-that jumble of lines, abbreviations, and numbers that can only mean one thing: your hospital bill.

 The typical bill can be difficult to understand, even for those in the health care industry. This is because the act of consolidating fees for the various services you receive while in the hospital can be challenging. Any hospital stay will include several services from the hospital's many departments. Most likely you will receive multiple bills from your hospital stay: one from the hospital, one from the emergency room, and one from the lab. To add to the confusion, your bill will likely contain an abundance of codes and abbreviations, which vary from hospital to hospital and insurer to insurer. In the end, your statement may look more like a foreign-language puzzle than a bill.

How Your Bill Is Calculated

The first step in deciphering your hospital bill is to understand how the health care industry tallies costs. Every time you visit a medical facility, whether it's an ER, clinic, full-service hospital, or doctor's office, a bill is drawn up. Your bill for each visit will include fees for each procedure performed, medication given, and all services rendered during that stay. Each line will likely include information such as:

 • The date the good (e.g., medication, food, etc.) or service (e.g., doctor's exam, nurse consult, etc.) was rendered

• The department from which it came

• A brief description of the good or service

• The quantity of the good or service

• The amount billed

• And, in some cases, the insurance "write-off," which is the amount that your insurer (if you have one) has negotiated with your hospital and/or doctor to waive

Your Explanation of Benefits (EOB)

If you've provided the hospital with your insurance information, it should automatically bill your insurer on your behalf. The amount for which you are responsible and the amount your insurer pays is typically determined by your policy contract. Once your insurer has reviewed and processed your "claim" (another word for the detailed bill the hospital sends the insurer), your insurance company usually mails you an Explanation of Benefits (EOB). This is what many patients erroneously refer to as their "bill." It is not. Rather, this important document breaks down your hospital bill by explaining which fees your insurance policy will pay. If you plan to deduct medical expenses on your taxes, or if you participate in your employer's medical flexible spending account (FSA) plan, an optional program that enables employees to pay for medical costs with tax-free dollars, you may want to save your EOB for your records.

 Your EOB is a summary of:

 • Costs that your insurance company believes are (or are not) covered by your policy

• How much your insurance company intends to pay

• How much they intend not to pay

• Why certain items are not covered

• How much of the bill is your responsibility

 Your EOB explains all of this using procedural codes and fees that the hospital has billed, as well as a line-by-line appraisal of what the insurance company has covered and what remains to be addressed out of pocket by the patient. You'll usually receive your bill from the hospital before you receive your EOB from your insurer. Many patients wait to receive an EOB before they pay their bill because the EOB can be a better indicator of what is actually owed to the hospital.

 How Costs Are Determined

Now that you know how to read your bill and EOB, you may wonder how hospitals and insurers determine these amounts. How do they assign monetary values to such varied goods and services as the number of aspirins taken, bed sheets used, or number of minutes examined by a physician in an operating room or spent during a scan?

 Most hospitals work with outside companies to determine the average retail price of each good and service provided. They then set their own prices based on these values, as well as prices around the community.

 In the case of your insurer, the amount your policy covers depends on the policy you have. Typically, the higher the cost of your monthly "premium" (the amount you and/or your employer pay each month to your insurer), the more your insurance plan is likely to cover, though this varies based on many factors, including your age, general health, pre-existing conditions, and whether you hold an individual or group policy. Insurers have access to vast amounts of cost data, which they study and use as a basis to determine what they think is a fair market value for the goods and services you receive at the hospital. Keep in mind that many insurance companies are for-profit, so they are seldom willing to pay retail hospital charges.

 Insurers may also negotiate with doctors' groups and hospitals to pay less for some things in exchange for encouraging patients to go to them. This is where you may have heard the phrases "in-network providers" (health care professionals who have signed contracts agreeing on prices) and "out-of-network providers" (professionals who have not contracted with your insurer). This downward pressure on prices can leave the uninsured out in the cold, as they are charged, and may be obligated to pay, all costs incurred at the hospital without a discount. If you find yourself in such a situation, it's a good idea to speak with the hospital billing department or your doctor, as they may be able to provide a more affordable solution for your care.

A Typical Hospital Bill

To fully understand the process that goes into tallying up a hospital bill, it is first necessary to understand a patient's condition and subsequent treatment as it is divided throughout the hospital. Most major ailments incorporate services from several different departments. A typical hospital bill may not group or order its items by department, though it may tell you from which department each charge originated.

 Take a case of pneumonia, for example. If the disease progresses enough to make hospitalization necessary, it can lead to a very expensive bill. The resources needed to effectively combat the infection draw from nearly all factions of a hospital, including the pharmacy, laboratory, radiology, and respiratory departments. To address the different symptoms, a typical pneumonia stay at a hospital often draws a variety of doctors into the equation, such as an internal medicine doctor, an infectious disease specialist, and a pulmonologist.

 As a result, the combined hospital charges for treating pneumonia may reflect not just the hospital bill, which may or may not include the emergency department, but also a bill from the laboratory, the radiologist, and the multidisciplinary team who worked to rid the patient's body of its bronchial havoc.

 How It All Adds Up

Here's how a bill might be tallied for pneumonia: First, to diagnose your condition, your doctor will likely request an X-ray or CT scan to confirm the presence of pneumonia in your lungs. If your X-ray appears normal but your doctor still suspects bacterial pneumonia, you may be asked to take a blood test or sputum culture (a substance that is expelled from the respiratory tract, such as mucus or phlegm, mixed with saliva).

 If an X-ray or CT scan is involved, expect to visit the radiology department. A powerful diagnostic tool, the typical X-ray is a straightforward procedure, usually taking only seconds to complete. Even so, you'll be billed for the services of the radiology technician, use of the X-ray or CT scanner, any labs or films, as well as the expertise of the radiologist, a medical doctor whose job it is to read the scans and assist with diagnosis.

 Your doctor may also complement any diagnostic images with a blood test or sputum culture, which means you may be visited by a phlebotomist who will draw your blood. The analysis of any blood samples takes place in a clinical laboratory, complete with a blood chemical analysis machine and a Medical Director, a specialized doctor who oversees the lab.  

 If your medical condition necessitates a bona fide hospital stay, you will be admitted and billed for a room. Under such conditions, the pharmacy will also be involved in your treatment. For pneumonia, your doctor may opt to use any number of antibiotics. Hospitals have a vast arsenal of medications at their disposal to treat pneumonia, although each one comes with a host of possible complications and side effects. The responsibility for providing the proper medication, as well as monitoring a patient's progress and ensuring that there are no negative drug interactions, falls on the shoulders of the hospital pharmacist as well as the patient's doctor.

 Once admitted to the hospital, your bill will continue to grow. You have had your X-ray, your blood has been tested, and the proper medications have been prescribed. At this point, the hospital may offer you a nebulizer, a device used to administer medication directly into your lungs in the form of a mist.

 Administering treatment through use of the nebulizer increases potency and speeds the body's reaction to the medicine, while reducing side effects.

 Still, understanding the way in which your bill is tallied is only half the battle. Unfamiliar medications, codes, hospital abbreviations, and procedures can make it nearly impossible to question a given amount or line item. Like any other kind of bill, hospital bills are also subject to computer and human error. A single incorrect procedure code, entered either by the hospital or the insurance company, could significantly alter your bill, and can be difficult to find, let alone correct.

 Fortunately, patients have some special protections should they need to contest a hospital bill. As a safeguard, federal regulations entitle all patients to the documentation they need to identify a billing discrepancy, including an itemized copy of the bill, a copy of the patient's medical chart, and a copy of the pharmacy ledger showing the exact medications administered during the patient's stay. By comparing documents such as these, a sharp eye may discover errors.

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