An Ordinary American Healthcare Billing Story

I will preface this by saying two things:

  1. This story generally ends well.
  2. Its unremarkability should be the portion of most concern.

My wife had an unexpected surgery in April. She woke up feeling fine one Wednesday morning, but by late morning was experiencing severe abdominal pain, and by the afternoon was in the ER. It turns out she had a benign tumor that we already knew about, but that had died and in the process put her into sepsis. We were blessed with an excellent surgeon, and by Friday, the problem was removed. She made it home the following Tuesday and recovered as well and quickly as one could expect.

We live in the state of Georgia in the United States of America. Georgia, like most Southern states, is pretty weak on consumer or labor protection. We have great insurance by American standards through United Healthcare (UHC) that I pay for through a small business group plan. (I’ve been in the “open” “healthcare” “market” for 18 years, so I saw the positive changes ACA brought without being insulated by my employer’s choices.) For just around $12,000-$14000 a year (and climbing annually), we get to pay negotiated rates for health care and get to have very expensive things covered.

That’s good news for us, because the base hospital bill was about $125,000. That didn’t include the ER visit, the follow-up ER visit for pleurisy, the separate charges for the surgeon’s services, pathology, or the lab work. Each of those showed up as separate claims on separate bills. In the classic American fashion, we just ignored the first bills and waited for the insurance company to work everything out.

Eventually, we got some bills that had numbers that looked right. A few hundred here, a couple thousand there. By then, the businesses who wished to be paid were becoming impatient and were sending “Past Due” and “Final Notice” alerts. We paid some of them and were about to pay another one tonight when I said to myself, “wait a minute”.

I noticed that one final notice bill in particular seemed off, the one for the original ER visit that got her admitted. It was full price, yet I know that something should have been covered. I went to UHC’s web site and tracked down the claim. Sure enough, United had never paid. I decided to get on the phone and give the billing department a piece of my mind.

When I called, they connected me with a “billing advocate”, who appeared to be someone who worked to explain the billing labyrinth of our particular system to the consumer. What I found out made me more convinced that we’re being ripped off at a trillion dollar scale by a system that has all the bureaucracy, twists, and turns that Republicans promise you government will provide, while at the same time providing none of the efficiencies that private businesses should have.

I took the 2 inch high stack of bills and picked the ones I needed the most guidance on. The billing advocate helpfully explained to me each claim I had questions about. I learned that there were four distinct patterns of payment happening:

  1. You visit an in-network provider. If you’ve met your deductible, then just about everything is covered, though you may be responsible for the euphemistically-named “coinsurance” up to your out-of-pocket maximum. These bills work the way that insurance promises. They negotiate a steep discount to the rack rate, they send a check for part of it straight to the provider, you get a bill for whatever’s left, you pay it.
  2. You visit an out-of-network provider, like a physical therapist or specialist you like that doesn’t take your insurance. The insurance company recommends an amount they think the service is worth and counts that toward your out-of-network deductible, tallied separately from your in-network one. In states with consumer protection, the provider must charge this amount to you. In states without it, providers can do what’s called “balance billing” and charge the rack rate. If you’ve met your deductible, some really nice plans pay about 70% above that with no out-of-pocket maxium. That deductible for me is $10,000, but for others could be as high as $45,000.
  3. You visit an in-network provider, but the insurance company needs documentation to prove the claim. The provider is supposed to hold the bill until the case is closed and the documentation they are contractually obligated to provide is sent, but they may choose to bill you anyway. If you don’t pay, it can get sent to collections and mar your credit score.
  4. You visit an in-network provider, and the insurance company pays, but the A/R and A/P departments don’t talk to each other properly. The provider bills you for the full amount. Just as in scenario #3, your choices are pay or get your credit damaged.

Most of the bills I received were scenario #1. We paid small or medium balances, and sometimes, after we met our deductible, everything was covered.

One bill we paid, for pathology, was scenario #2. Here’s the catch, though: patients don’t choose their pathologist. The surgeon does. And if you’ve ever asked a surgeon, you’ve found that are focused on how to do their job and heal people and have no idea how any of the billing processes work. The choice of internal medical providers at a hospital is affected by our patchwork insurance coverage system, so it’s tantamount to trying to pick a business based on who’s related to your spouse’s cousin without asking your spouse or your spouse’s cousin. If you get it wrong, you don’t get the discount. So we ended up paying over $1,400 because the pathologist that happened to receive my wife’s specimens wasn’t contracted with UHC.

The bill I was suspicious about was scenario #3. They did not provide the documents to the insurer, and they were not supposed to bill us, but they did anyway. Like any reasonably fiscally sound household, nothing puts us on notice like a Final Notice. I was prepared to pay the entire amount, over $1,200, just to get them off of my backs. It turns out we don’t owe them a penny, at least not yet.

The bill was for the surgeons was scenario #4. The surgeons were in-network, and that bill was a little over $9,000 before discounts and insurance payments. There was a mixup with the documentation, and so there was a delay in payment. UHC eventually settled with them for a little over $5,000, which was intended to cover the entire amount owed for that particular bill. Despite this, the physicians group charged us a little over $2,000, with about 15% off for paying all at once. So now we have to call them and figure out how to get our money back.

There are people who have lost their credit, their homes, or been driven to self-destruction over health care in our country. So why does this particular story matter, where a person with the means to absorb a couple of four-figure shocks to their bottom line is deeply inconvenienced, but not severely damaged?

It matters because my story is completely unremarkable. I’m just a regular, middle-class person earning a decent income in technology, and I pay five figures a year after taxes just to keep my health insurance discount plan. When a crisis like this happens, the resulting bill resolution is harder than doing my taxes, and I have two LLCs to report for. We are at the mercy of organizations that have no financial incentive to help us or to fix the arms race of service pricing that leads to a six-day hospital visit costing over $100,000.

What I didn’t talk about is how we wait in the ER with people we love, not for a medical provider with reassurance that your loved one will be healed, but for a billing coordinator who tries to see if they can get some money out of you that day, while your loved one is still writhing in pain, before they know if they can help. I didn’t talk about the food that was not only poor tasting and built off of what seemed to be a 1940s food pyramid, but also the opposite of what someone needs to heal. Fried pork chops for back surgery patients with a history of high blood pressure, like my father. Creamy dairy-based soups and low-quality ice cream for abdominal surgery patients, like my wife. I also didn’t talk about how I send my wife into hospitals in my Princeton University paraphernalia so that they will look twice and not dismiss her in her Blackness or in her womanhood, or how I’m sure to call all the drugs by their technical names when I’m talking with the doctors. These tricks are derided by people who think it’s about trying to achieve respectability. No, it’s about reminding medical professionals that we are people and not stereotypes, that we feel pain to the same degree as them, that we matter. It’s about survival.

None of this has to do with the thousands upon thousands of dedicated nurses, doctors, medical professionals, and support staff that genuinely do their best to do no harm and to help where they can. They did not set up the Byzantine billing systems or the complex rate tables. They did not pass the policies that leave your quality of care up to your ability to find a generous company or to create a company with multiple employees. They are not the ones that watch the rest of the industrialized world produce better health outcomes and longer lifespans on half of the budget we spend, even with public and private systems existing in tandem, and don’t lift a finger or a Congressional bill to do anything about it.

It’s beyond the scope of this post to unpack the reasons why we in the US are so satisfied with a system that produces objectively worse outcomes in many areas at a much higher cost. But with the generosity of employers wearing thin and laws in many states providing less and less protection to workers and patients, we’ve got to do something about this. Whatever your politics are, if you are of ordinary means and satisfied with the costs and processes of our health care system as it is, I can assure you it’s because you’ve never properly exercised it.

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