Why Are There Extreme Differences in the Cost for the Same Procedure?
Hospital charges and hospital costs for the exact same procedure can vary greatly. For the purposes of this article, we compare a common procedure reported/billed hundreds of times a day by all hospitals.
The prices are wildly different in the country depending on where you go and the charging discrepancies in some instances are shocking. Even going to different hospitals in the same metropolitan area varies.
Venipuncture/Collection of Venous Blood – CPT Code 36415
Venipuncture is the technical term used to describe the routine removal of blood from a vein used most in subsequent laboratory testing.
Depending on where the venipuncture/blood collection is performed, the service may be billed by a variety of providers performed in various places. For example, a venipuncture/blood collection procedure can be performed in a physician’s office, home, assisted living, mobile unit, urgent care, inpatient hospital, outpatient hospital, emergency room, skilled nursing facility, nursing facility, independent laboratory and other locations.
Charges and Hospital Reported Cost
On the high side, go to a hospital in Stockton, California, and the charge for a simple blood draw/venipuncture service (CPT procedure code 36415) is $881.The hospital’s reported cost is $43.94. At a hospital in Houston, the charge for the exact same service is $872 and the hospital’s reported cost is $64.75.?
In the middle, go to a hospital in Steven’s Point, Wisconsin, and the charge of a simple blood draw/venipuncture service (CPT procedure code 36415) is $35 with the hospital’s reported cost at $3.62. At a hospital in Price, Utah, the charge is $50.42 and the hospital’s reported cost is $5.99.
On the low side, go to a hospital in Lincoln, Nebraska, and the charge for procedure code 36415 is $5 with the hospital’s reported cost at $0.72. At a hospital in Chicago, the charge is $13, and the hospital’s reported code is $2.53.
Questions
How do hospital reported costs relate to the charge or the price that health care providers bill patients and report/bill on the insurance claim? Unfortunately, there is often no clear relationship.
How can a hospital charge $881 for CPT code 36415 while another hospital more reasonably charges $5 for the exact same service? Simple answer: because they can and do.
The Takeaway
Surprise hospital bills and egregious charges are more common than you think. Concerns of egregious charges for the frequently reported/billed services referenced above specific to venipuncture/blood collection (CPT code 36415) is evident on hospital claims.
While hospitals can charge any amount they elect for services, egregious fees and billing/coding errors complicate matters for members to understand their bills and payments, impact the collection of patient balances, build a reputation of hospitals charging high fees, and create burdens for patients having no insurance.
Obtaining pricing estimates prior to needing or having related care to understand how much one is obligated to pay for their services and learning if there are any coverage limitations can be beneficial to avoid surprise medical bills. Whenever an individual receives a bill and the cost for care seems inappropriate/questionable, an inquiry to the provider and/or health plan should be made to obtain an explanation of the services and corresponding charges.
Our goal at ClaimDOC is to use benchmark charges and costs nationally to negotiate fair and ethical payments. Employers turn to us to seek and establish fair reimbursement rates for their plans allowing them to save money and provide richer benefits to their employees – a win-win for everyone.
Background
ClaimDOC's comprehensive line-by-line auditing of claims uncovers errors that basic claim repricing and auto-adjudication does not catch, leading to greater savings for health plans and beneficiaries. Our audit team analyzes all types of healthcare claims for a variety of potential concerns including excessive usual, customary, and reasonable (UCR) charges, duplication of claims, compliant coding/billing, unbundling of services and other issues. Our claims review is not intended to impact care decisions or medical practice.