Financial Assistance - Explanation Of Charges
An Explanation of Your Hospital Charges
Hospital billing systems are complex. Charges are an industry standard and are found on most hospital bills. They are required of hospitals by the federal government for the purpose of submitting cost reports. Ellis Hospital’s charges are in accordance with federal Center for Medicare and Medicaid (CMS) guidelines.
Charges represent the entire cost of providing that specific care and everything behind it - including goods and services, labor and supplies, technology, insurance, plus overhead costs associated with any hospital that provides 24/7 care. Charges represent our investments in advanced technology and training to improve patient safety, such as our computerized medication administration system - which is an electronic barcode technology used to ensure that patients receive the right medication and right dosage. Charges support our ability to recruit and retain the best and brightest doctors, nurses and clinical support staff to provide quality care for our patients.
In some cases the hospital bill does not cover the costs of the specialists, for example, an anesthesiologist. Typically, private physicians bill separately for their services. The hospital bill does cover the cost for nurses at the bedside; pharmacists, lab techs, food service staff, environmental services, security personnel among others that keep the facility operational.
Hospitals across America are examining ways to make healthcare more affordable by better coordinating care, reducing red tape and providing the right care in the right setting. All of these circumstances play a role in the development of charges.
The healthcare industry has a complex billing system, and reimbursement is complicated. What hospitals charge and what hospitals are paid are two very different things. Government programs such as Medicare and Medicaid routinely pay hospitals less than the cost of caring for our patients. Most HMO/PPO and other insurance companies pay a negotiated rate (commonly referred to on your Explanation of Benefits or EOB as the allowable) based upon the services rendered.
Here is an example of an insured/covered inpatient hospital stay:
(A) Billed charges = $18,500
(B) Insurance (allowable) =$14,900
(C) Patient Co-insurance = $2,980 (Employer and Health plan dictate the coinsurance as 20% of allowable (B x 20%))
(D) Insurance payment to hospital = $11,920 (Difference of allowable and patient co-insurance(B-C))
(E) Hospital Contractual Adjustment or "write off" = $3,600 (A-B)
The amount written off, in this case, $3,600 is the amount the insurance company deems as "above the allowable charges"; meaning the amount exceeds what the insurance states as acceptable or has been negotiated as payment to the hospital. This amount is not passed onto the patient. The contract that the employer and hospital has with the insurance company is what determines the amount the insurance company pays and how much is passed onto the employee as their responsibility to pay (deductible, coinsurance and copayment). The insurance company and employer determine that amount and the hospital cannot by law or per our contract with the insurer waive or reduce that amount.
We will gladly work with all our patients for a better understanding of their hospital bill. We are also here to provide support and financial assistance if you are having trouble paying your hospital bill. Please call 518.243.1500 or 1.877.456.4557 for assistance. We also offer the options of monthly payment plans and applying for financial assistance based upon family size and income.