Medical fees surprise patients, bankruptcy plagues others

Nov 25 2009

High medical fees often catch patients off-guard while many plagued by medical debt file for bankruptcy. The Wall Street Journal reports: "When patients visit some doctors' offices and urgent-care clinics, they're increasingly running into something unexpected: billing as though they had gone to a hospital. The fees, which sometimes amount to hundreds of dollars, can result when hospitals own physician practices, urgent-care centers and other operations. Patients visiting an urgent-care clinic for a sore throat, for instance, can unexpectedly get billed as if they visited a hospital emergency room. And doctors' offices in clinics owned by hospitals, besides billing for the physician's work, might also tack on a 'facility fee,' an additional charge hospitals usually impose when procedures are done on their premises. Even for insured patients, such additional charges can drive up out-of-pocket costs."

"Insurers, including WellPoint Inc. and Cigna Corp., say they're seeing an increase in hospital facility fees charged when members see doctors in clinics affiliated with hospital systems." Hospitals say the charges are necessary to provide services and in part to meet patient safety regulations (Mathews, 11/25).

A Kaiser Health News feature also reports on how "facility fees" are a surprise cost for many patients (Boodman, 10/6).

Meanwhile, The New York Times reports on another effect of high medical costs: "Although statistics are elusive, there is a general sense among bankruptcy lawyers and court officials, in Nashville as elsewhere, that the share of personal bankruptcies caused by illness is growing. In the campaign to broaden support for the overhaul of American health care, few arguments have packed as much rhetorical punch as the there-but-for-the-grace-of-God notion that average families, through no fault of their own, are going bankrupt because of medical debt." The overhaul bills in Congress seek to address the problem in a few ways, mostly through expanding coverage and capping out-of-pocket costs, according to the Times.

"How many personal bankruptcies might be avoided is unpredictable, as it is not clear how often medical debt plays a back-breaking role. There were 1.1 million personal bankruptcy filings in 2008, including 12,500 in Nashville, and more are expected this year. Last summer, Harvard researchers published a headline-grabbing paper that concluded that illness or medical bills contributed to 62 percent of bankruptcies in 2007, up from about half in 2001." According to the study, more than three-quarters of people with medical debt had health insurance.  Some experts have critiqued the researchers' methodology as too broad.  

"At the bankruptcy court in Nashville, lawyers provided a spectrum of estimates for the share of cases in Middle Tennessee where medical debt was decisive, from 15 percent to 50 percent. But many said they felt the number had been growing, and might be higher than was obvious because medical bills are often disguised as credit card debt" (Sack, 11/24).