Procedure Pricing: Off the Charts?


PORTSMOUTH, Va. (WAVY) — If you’re confused by the cost of your care, you’re hardly alone. We’re looking into where providers get their prices, and how a new law designed to protect patients may end up making your head spin even faster.

“I was really shocked when I got the bill for a routine CAT scan,” said Steve Milne of Carrollton. He has periodic CAT and MRI scans with Sentara, but we get complaints from patients with other providers and involving other procedures.

In 2017, Milne was billed for an MRI, before insurance, at more than $4,300. A year later, he had a CAT scan, which generally should cost less than an MRI.

“I got a bill before insurance of $6,000,” and Milne’s out-of-pocket cost this time was more than $2,100.

“I just wanted an explanation. How could they justify those charges?”

Special Report: Confusing Cost of Care

Dale Gauding, Sentara’s Senior Communications Advisor, couldn’t comment on a particular patient. He says all providers negotiate price schedules with various health plans.

“Sometimes prices grow as part of a contracted agreement,” Gauding said. “There is no universal pricing mechanism in health care.”

A new law passed after Milne’s treatment forces providers to post their rates online. But that’s not making the whole process more transparent.

“I think it actually brings more confusion,” said Erin Bradshaw, Chief of Mission Delivery for the Patient Advocate Foundation. Her organization and Sentara agree that the posted prices, also known as a charge master, are not a reliable guide.

“They’re scary high. They represent the top-tier pricing that almost no one really pays,” Gauding says.

Bradshaw likens the medical pricing structure to that of buying a car.

“The manufacturer’s sticker price is what the average price is, it’s not reflective of what the average price is. It’s not reflective of the discounts or rebates.”

Gauding says you’ll pay less if you have a health plan, if you’re a self-pay patient, and potentially nothing at all if you’re indigent.

Milne was also getting IV treatments for an infection. He received seven treatments, 15 minutes each session. It required just a nurse to hook up the IV drug and no special machine.

“So that’s 105 minutes and they charged me $1,500 and that was just the service charge.” The cost for the drug is billed separately. Broken down, the service charge comes to $857 an hour, but Sentara says that’s misleading.

Gauding says that service charge reflects the hospital’s overhead for its 12 hospitals, more than 300 care sites, and other operations. He says Sentara spends $15.6 million dollars every day just to keep the doors open.  So as you probably already guessed, the nurse doesn’t really get 850 bucks an hour.

“Both providers and consumers are frustrated with the cost of health care. It is one of the biggest complaints in America,” Gauding says.

Not just one of the biggest for Milne.

“I’ve decided that as soon as this is settled, I’m firing their butts.”

Gauding urges consumers to use the transparency tools on their health plans’ websites, which they are now required to post. “It’s up to consumers to pay close attention to their health plans and their health plan design.”

The Patient Advocate Foundation says patients shouldn’t rely solely on these online calculators. PAF says your best bet is always to call your health plan, to get the most accurate information about what a procedure will end up costing you.

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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