Lawmakers ask about hospital billing

Ryan Carter

Providence St. Joseph Medical Center is among dozens of hospitals

nationwide tapped by federal lawmakers investigating hospital billing

practices.

Lawmakers from the House Energy and Commerce Committee and the

Oversight and Investigations Committee are looking into whether the

uninsured are shouldering larger payments for medical services than

medical insurers that have already bargained rates with providers.

As part of their investigation, Reps. Billy Tauzin (R-La.) and

James Greenwood (R-Pa.) sent a letter last week to 20 hospital chains

nationwide seeking information about how they bill their patients and

how they set their rates.

Among the information requested by lawmakers are specific records

for each chain and individual hospital dating back to 1998. That

information includes net operating income, revenue collected per

patient per day under Medicare and Medicaid, revenue from uninsured

patients, cost-to-charge ratios and rate formulas.

At Providence, the letter has staff scurrying to meet the July 31

deadline for providing information.

“The primary effect is that our folks in our financial departments

at all of our hospitals are jumping into a data-gathering effort,”

said Steve Brennan, director of Public Policy and Regulatory Affairs

for Providence.

Of the 20 hospital chains, six are in California and three have

centers in Burbank and Glendale. Providence St. Joseph Medical Center

is part of the Washington-based Providence Health System, Glendale

Adventist Medical Center is part of the Roseville-based Adventist

Health, and Glendale Memorial is part of Catholic Healthcare West in

San Francisco.

“We are not targeting a specific company, but we are targeting a

problem,” said Ken Johnson, a spokesman for the House Energy and

Commerce Committee, adding that in some cases, it appears hospital

companies are overbilling the uninsured compared to health plans set

by other companies.

Lawmakers said so-called “self-pay” patients -- patients who have

no coverage through a third-party health plan and are not enrolled or

eligible for any government-sponsored program -- could be at

particular risk because providers increase costs to the uninsured to

make up for revenue lost in discounted plans to the insured.

“These rates are often inflated far beyond their actual costs and

reasonable profit due, in part, by the providers’ need to make up for

the steep discounts from charge master prices demanded by the

third-party health plans,” the letter said.