Is my hospital allowed to charge a higher rate for uncovered portion of bill?

Question

When admitted as an “observation” status, my insurance company only pays 80% of the hospital visit. My insurance company paid $960.00 and I was billed for the balance, $760.00.

I called my insurance company and was told that my bill was $1200.00, a pre-determined fee for what I was admitted for.

I called the hospital billing and stated that 20% of my bill only comes to $240.00, but was told that my bill came to $3800.00 and that they accept 80% of what my insurance company determined to be their fee, but the 20% balance is 20% of the original price (20% of $3800.00 = $760.00). Is my hospital allowed to charge me a higher rate than they charge my insurance company? If so, how can my insurance company advertise that they pay 80% of hospital "observation status" visits? My portion of the bill was almost equal to what was paid, and this does not include what I pay monthly for premiums.

Answer 1

Yes, the hospital is allowed to do so.  The healthcare provider negotiated a fee for the services provided to you.  That negotiated price doesn't apply to YOU.  It applies to the insurer only.  You are free to attempt to negotiate downward the balance applied to you.

Answer 2

This has already been to court several times. You only need to pay 20% of the pre-determined fee. You may need a lawyer to look up the exact case and send the hospital a letter citing the case(s).

Answer 3

~~NO! They have to take the negotiated price agreed upon in their contact with your insurance. They can only charge you 20% of the difference of the negotiated price. What they are doing is called balance billing and it is illegal. Pay the 20% of what your insurance negotiated fees are, then in a letter which you need to send certified mail, tell them what they are doing is illegal and you will file a complaint with the insurance commissioner (of your state), if they do not correct their billing. You should have received an explanation of benefits from your insurance and it clearly shows what your payment responsibility is. Copy that and send it with your letter. Also, call you insurance company and request a form to file from them so they may take it before their board. This can hurt future negotiations down the road. Keep everything recorded in a file. If they dare try to send you to collections, you will have copies of communications easily ready to copy and send. They can not hurt your credit with this information. It will get cleared up very quickly, probably just with your letter. Most people don't know any better and just end up paying it, that's why the give it a shot. Show them you mean serious business, but your insurance company needs to know how this hospital is trying to cheat their members. Best of luck!~~