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Medical debt is the second most common reason why American’s file bankruptcy even those with insurance. A frightening statistic from the Federal General Accounting Office study reported that as many as 95 percent of all hospital bills include overcharges This could make for an interesting conversation during the cocktail hour at the American Hospital Association convention.

Hospitals will use the excuse that it is nearly impossible to keep up with the various billing programs of 40 to 50 different insurance companies and Medicare and Medicaid. All of these organizations have their own forms and codes for “who’s covered for what, under what circumstances” rules, and own billing and payment systems. “The medical billing system is complicated and confusing,” admits Rick H. Wade, senior vice president of the American Hospital Association, which represents most of the hospitals in the United States. On Dec. 27, 2002, he told a “Dateline NBC” investigative team, “Trying to understand all the code words and jargon can turn your brain into oatmeal.”

Many hospitals overprice procedures and supplies egregiously. “It’s not unusual to see supply items marked up sometimes as much as 1000 percent,” says Randall Marrs, owner of Medical Audit Recovery Services in Tulsa, Okla. “I’ve seen an oral swab billed for $55, when a package would cost you $2 at the drug store.” Saline solution, which is often billed as much as $75 per 1000 ml, costs the hospital no more than 35 to 40 cents, he adds. Those are details you may not notice if your hospital co-pay is a fixed amount. But if you have to pay a portion of the bill say 10% or 20% you’re paying part of those inflated costs. Continue reading ‘Medical debt is the second most common reason why Americans file bankruptcy’