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on first blush. In many cases it is rate based and there is no way to 'charge extra.'When you are hospitalized as a Medicare patient in any state in the country, at any hospital, the hospital gets a diagnosis-based rate of which there are around 700 diagnoses. If the case turns out to be excessively costly, and goes over a certain levl of cost, then the hospital may get some additional funds for the case. I'm making up the numbers, but let's say you have bypass surgery and the Medicare rate for that diagnosis in your region is $75,000, that is what the hospital gets paid. However, you are very likely to get a statement from Medicare which says it covered $250,000 in 'charges', which are the $2 aspirin charges you see on a bill. Medicare did not pay the $250,000 and the hospital writes off the difference as a contractual allowance. Medicaid works in a similar fashion, although how they pay varies by state. It could be set by diagnosis or it could be a per diem rate set by the state's Medicaid department. HMOs usually pay per day (per diem) rates.
In some states, the private insurers pay per day rates or they pay a percentage of charges. If you have full hospitalization coverage, even if the insurance company only pays 75% of the charges, the 25% doesn't get billed to you. Per day payment arrangements are much more common nowadays than payments based on charges.
In the hospitals where I worked, we would usually try to collect a patient's medicare deductible up front (that's a one time item) but that would not stop anyone from being admitted, if they didn't pay it. At least in NYC, most of our Medicare patients had secondary coverage thru a private insurer or Medicaid, so this affected few people. Pure fluff stuff like the extra charges for a private room, if not medically necessary, had to be paid in full up front.
We would also attempt to collect patient coinsurances upfront, but not paying them, unless it was a plan that basically paid the hospital nothing, would usually not stop a patient from being admitted. One of the reasons for that is that the insurance companies for years have perfected a divide and conquer technique between the hospital and the MD. For example, it wasn't that long ago that hospitals had HMO contracts which paid an amount per day, but didn't include the costs of specialty implants. So, you have a neurosurgeon who wants to put a $15,000 nerve stimulater into a patient with chronic pain with a hospitalization of 5 days. If the hospital got paid $1,000 a day, it would get $5,000 and have to eat the cost of the implant, to not tick off the neurosurgeon. Nowadays, more MDs realize the need for the hospitals to also be adequately reimbursed, because if they are not, the surgeon may get his fee, but conditions in the hospital become run down.
The one area where things become problemmatic is when people are uninsured. If you need an emergency admission, you get admitted, since that's the law and the hospital tries to collect later. If it is a purely elective procedure like plastic surgery, we would demand the full fee up-front. What we need with elective but medical admissions varied. Usually, an estimate would be worked up, and the patient would be asked to pay some amount of it upfront, usually 50%.
Andy's surgery actually falls into the elective category because even though he needs to have it to live, right now it is not an emergency in the sense of someone having been hit by a car. How the uninsured patients get charged is all over the place. Some states regulate the prices, some don't and some insist you use charges.
And there are a lot of people who go to private, non-profit hospital, who don't pay their balances due. NYS doles out hundreds of millions of dollars a year to partially compensate for those bad debts. Many of the people are uninsured who cannot pay, but then you also get people who probably could pay their coinsurance, but just don't. Unless it's a large amount of money involved, a hospital will send an account to a collection agency and you'll get calls & letters, but you won't necessarily be taken to court or reported to a credit agency, since that costs money too, and may not be worth it.
In NYS, where virtually all payment plans are rate based, usually the only way a hospital shows a profit is if it has healthy endowment income and gets a lot of donations. In other states, where payments were for years (and may still be) based on charges or a % of charges, hospitals are or at least were able to build up large investment balances and show profits.
I'm sure that Hopkins has programs for the indigent, and does accept Medicaid. I think the problem in Andy's case was that he is a self pay patient from Seattle. Generally, hospitals spend their indigent care funds on people from their own community.
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