'The Costs of COVID-19' Part 1: Health care costs, billing difficulties

Throughout the month of November, ABC57 Investigates is introducing a new series called ‘The Costs of COVID-19’. Part 1 focused on hospitals in the Hoosier state.

Indiana has some of the highest hospital healthcare costs in the country, but across the state line in Michigan, are some of the lowest costs.

“I was surprised to come to Indiana and see just how expensive the facility side of health care is in the state,” CEO of The South Bend Clinic Kelly Macken-Marble said. “It is very concerning as a provider.”

Non-profit, non-partisan think tank RAND Corporation looked extensively at the Hoosier state and found that Indiana is the sixth most expensive state in the country when it comes to health care costs, while Michigan is the second least expensive.

Here’s how it works:

If a patient goes to an emergency room to get a procedure done and it costs a Medicare patient $100 and that patient is privately insured in Indiana, it would cost 304% of that amount of in this example $304. If the patient is privately insured in Michigan, it would only cost 190% or $190.

That is a price difference of $114 for the same exact service and the money may not be going where you think it is.

“Most of that isn’t going to the doctors and the nurses that provide care, it’s going to hospitals,” said RAND Corporation Policy Researcher Christopher Whaley.

Whaley said Indiana’s ranking comes as a surprise and he does not have a good explanation.

A few miles up the road in Michigan, it is a different story.

“Michigan is actually our second cheapest state at 190% of Medicare,” Whaley said.

Healthcare is much cheaper in the Mitten State because providers are more transparent with pricing, according to Whaley.

“The good news is we have a lot of opportunity to reduce the cost of care,” Macken-Marble said.

As the CEO of The South Bend Clinic, Macken-Marble recognizes the frustrations patients have.

“You go in for services, you find out that you ended up being seen by a provider that may not be in your network and all of a sudden you have a cost that you didn’t anticipate,” Macken-Marble said.

That unanticipated cost is what is called ‘surprise billing’ and data shows it happens more often than people might think.

Benjamin Chartock, an Associate Fellow and PHD Candidate at the University of Pennsylvania has been leading the charge in this research.

“We looked at a nationwide database of health insurance claims and we found that nationwide the about 20% of patients who entered the hospital for an inpatient admission through the ER received a surprise medical bill,” Chartock said.

So how do 1 in 5 patients entering a hospital’s emergency department walk out paying for something they did not expect?

If you have a surgery scheduled at a local hospital and all of the medical professionals are in-network, the cost is lower. But, at the last minute, the anesthesiologist cancels and they need to get a replacement. If the replacement is out of network, the patient will have to cover that surprise cost. Hence, a surprise bill.

“And it’s not that different than going to a restaurant and ordering a drink, an appetizer, a main course, you know a side dish and then a dessert,” Chatrock explained. “And a surprise medical bill might be something like the pastry chef sends you another check after you finished eating your meal. I think, you know, we as American consumers will be up in arms if one in five times we went to a restaurant we got a separate bill from the pastry chef.”

Surprise bills are no stranger to the coronavirus pandemic, either.

“One of the anecdotal stories I’ve heard is that someone will go into a COVID test, particularly for one of their blood draw cases and they’ll send their case in and the COVID test may be in network, but they’re running a whole bunch of other tests that this patient, kind of, you now, you don’t have control over necessarily ever single test that a giant firm like Labcorp or Quest runs and those may not be covered,” Chartock said.

In many cases, researchers like Chartock suggest that patients are getting these testing bills even when they probably should not.

“I think as healthcare providers, we can certainly do a better job in making sure that patients really understand,” Macken-Marble said.

State lawmakers are hoping Indiana House Bill 1004, passed back in March 2020, will help solve this problem.

State Representative Ben Smaltz authored the bill and said transparency is the main focus.

“The good faith estimate is an important part of the bill, where the provider has to provide the costs of the procedure, whatever it may be,” Rep. Smaltz said.

This means that a statement must be given to the patient five days before the service, detailing an estimate costs, whether the facility plans to charge more than allowed by your plan and getting patient consent.

This part of HB1004 goes into effect in July 2021, but Chartock said lawmakers still need to fix this problem at the federal level and that has not happened, yet.

“Primarily the sticking point for why legislation hasn’t passed seems to me to be because insurance and doctors can’t agree on the right payment standard when one of these occurs,” Chartock said.

So while HB1004 is a step in the right direction, experts said there is still more to be done.

“I’m not holding my breath,” Chartock said. “But I’m also optimistic that there will be a solution soon.”

“For a problem that has taken so long to become apparent to the point that it is, it will not be fixed overnight,” Rep. Smaltz said. “It will be fixed over time.”