Why Your Hospital Bill Is Almost Never What Your Care Actually Cost

Every hospital maintains a master price list where prices have no reliable connection to the actual cost of care. Chargemaster prices are the starting point for every negotiation. The higher the list price, the more room there is to appear to offer a discount while still collecting more than the care is worth. If you are uninsured or out-of-network, you may be billed at or near chargemaster rates.

Billing separately for individual components of a service that should be billed as a single procedure code. A surgical procedure might have one billing code that covers the procedure, standard instruments, and basic OR time. If a hospital bills the procedure plus separate line items for each instrument, the anesthesia monitoring, surgical sponges, and OR time, that is unbundling — each item is real, but billing separately results in a higher total than the bundled code allows.

Billing for a more complex, more expensive version of a service than what was actually provided. A 15-minute follow-up visit billed as a complex new patient visit is upcoding. A hospitalization coded with diagnoses that were mentioned incidentally in the chart — rather than being actively managed — to qualify for a higher-paying diagnosis-related group is upcoding.

A charge for using a hospital facility, billed in addition to the charge for the actual service. Facility fees became widespread as hospitals acquired physician practices and converted them to hospital outpatient departments. The same doctor, in the same office, performing the same service now generates two bills instead of one. Facility fees are legal and frequently unexpected.