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Tips From NOLO.com

How To Combat Excessive Outpatient Hospital Bills:

New Medicare Hospital Outpatient Caps Offer Little Protection From Overcharges

A loophole in the law has allowed hospitals to bill seniors for nearly 50% of the total payment to hospitals for outpatient services compared with 20% for most other Medicare covered services. A new reimbursement system will slowly shrink that charge to the normal 20%, but analysts predict that it will take up to 20 years to fully implement.

Under the new system hospital outpatient charges will be capped at $776. The cap however will apply separately to each outpatient service. For example, each visit during a course of radiation therapy would be treated separately and a patient could conceivably receive multiple services each subject to a separate cap during a single visit to an outpatient center. The new caps will have limited impact, mainly reducing bills for particularly expensive outpatient services such as one-day surgery.

From the latest edition of Social Security, Medicare And Pension's authors Attorney Joseph Matthews and Dorothy Matthews Berman offer the following strategies to combat the excessive charges:

Before you receive an outpatient service, check with the hospital administrator or financial office personnel to see if the hospital will accept the Medicare-approved amount as the total bill-meaning you or your private insurance (Medigap) would be responsible for only 20% of the Medicare approved amount.
If not, ask your doctor if the service can be performed either in the doctor's office or at an independent laboratory instead of at the hospital. (Doctor's visits and lab work are covered under the normal 80/20 rules.) If the service can only be performed at a hospital, explain the Medicare payment problem to the doctor and ask if there is another hospital where you might receive the services and which would charge only the Medicare-approved amount. If you cannot find a way to receive the outpatient services at a Medicare-controlled cost, you might consider receiving the service or treatment as an inpatient if it can be shown to be medically necessary.
Get an estimate of what your outpatient charges would be. If they exceed $776, ask your doctor if the treatment or service you are to receive might justify that you go into the hospital for an overnight stay. If so, you would only be responsible for the yearly inpatient deductible of $776. If you have already paid your hospital deductible for the current benefit period, you might not owe anything at all.

Editor's Recommended Reading

Are you getting all the benefits you're entitled to? Do you know how to avoid costly mistakes that eat away at the benefits you've earned? The book mentioned in the previous article, Social Security, Medicare and Pensions by Attorney Joseph Matthews with Dorothy Matthews Berman, $21.95 Nolo.com ,is an excellent guide. This book helps you make informed decisions about your benefits that could mean thousands of dollars more during your retirement years. The 7th edition has been newly revised. Comprehensive in scope but written in simple, (non-lawyer), plain English it has information on:

Understanding Medicare and Medicaid coverage.
Comparing Medicare Medigap policies vs. managed care plans.
Getting Social Security and continuing to work.
Filing claims and appeals.
Tips on how to handle every step of the process.

To order Social Security, Medicare and Pensions by Attorney Joseph Matthews with Dorothy Matthews Berman, $21.95, call Nolo.com 1-800-992-6656.

For more information on the legal concerns of seniors visit: www.nolo.com/ChunkOA/OA.index.html

This article first appeared in Volume 5, Issue 1 of "The Social Security and Medicare Advisor" newsletter (November/1999). To receive future editions of "The Advisor" in its special, free e-mail version, please click here.