Why *Where* you Get Your Health Care Matters to Your Pocketbook
That old saying about real estate value is true in health care, too.
I had the mistaken idea some years ago that if my doctor ordered an MRI, the cost was the same wherever I had it done. I only paid a copay, so why did it matter?
It actually does matter especially since insurance coverage has changed. More and more policies demand higher patient higher deductibles, as well as coinsurance, or a share of the costs rather than a flat copay.
I recently did research for a patient whose doctor had ordered X-rays and an MRI which were important to developing a treatment plan for a complex condition. Her insurance coverage required she pay 20% of the allowed charges (what the insurance company had contracted with the provider to pay for the studies), and she was concerned how much it might be.
I called the hospital and a couple of free standing imaging centers in her community to inquire about an estimate for out of pocket expenses. Without pre-authorization to process a claim for services, none would even give me a ballpark charge.
Some insurers have a tool on their website which allows you to enter the procedure code from the doctor along with your zip code to see what in-network facilities close to you are allowed to charge for that procedure or test so you can calculate your costs. Her insurer didn’t have this tool available, so for grins I logged onto my healthcare insurer’s site and plugged in her zip code. The hospital closest to where she lived showed an allowed charge over $3000 for the MRI while a free standing imaging center charged around $800 for exactly the same test. While providers’ rates vary from insurer to insurer, they tend to be somewhat close except in rare circumstances.
This means that her out of pocket cost could have ranged from $160 to $600. That’s a pretty big swing based on location.
As health care consumers in the evolving landscape of our insurance coverage, we will increasingly be asked to bear a greater percentage of the costs for care. In a world where these costs aren’t easy to access until after the fact, what can you do?
What You Can Do Before You Incur Healthcare Charges
1) Most importantly, ask your doctor if the test is really necessary. How would your treatment be effected if you don’t have the test or study? A recent study shows that if a doctor has an MRI machine in their practice, they order more MRI’s. This isn’t necessarily bad medicine, but it is expensive medicine. So ask how having the test or study would change your plan of care and if it’s really needed.
2) Be aware that costs for tests and procedures can and do vary dramatically by where they’re delivered. A recent New York Times article by Elizabeth Rosenthal highlighted the kinds of charges for services that are delivered in hospitals. If you’re interested, you can read the article here.
3) See if your insurance company has an online tool to allow you to compare prices of tests and procedures by facility. Often these are for only the most common procedures, but you can get an idea by entering the procedure codes on the doctor’s order or prescription to see which hospital or facility in your plan is likely to have the best rates.
4) If you don’t have insurance, many hospitals and outpatient facilities do have a “charity cost” which I’ve found to be remarkably similar from facility to facility in a given market. If you meet their financial criteria, which can vary, you can request this rate. Typically, you must pay in advance.
5) Be sure you understand who owns the facility where you’re considering getting your tests done. Recently, a client had blood tests in an outpatient facility she had used previously which had been acquired by a hospital. Because hospitals are contracted at different rates with insurance companies, the same test that had cost her $17 suddenly cost her $200 because the owner of the facility had changed and they could code the visit differently.
6) If your situation isn’t urgent, consider scheduling your test or procedure at two facilities, and ask them both to pre-authorize your test with your insurance company to be able to tell you what you will owe. You can then make a decision based on money, time and personal preferences and cancel the appointment you don’t want to keep.