Paying for care

Hospitals will often accept amounts less than their billed charge as payment in full.

For government programs like Medicaid and Medicare, health care providers are required by law to accept the payment from the government, combined with any required cost-sharing from the patient, as payment in full.

The same is true for most types of commercial health insurance, although it is not a matter of law but rather a matter of the contract the health care provider has signed with the insurer.

For patients without health insurance, hospitals have charity care policies that offer partial or total fee reductions, or payment plans, to patients who have a financial need. However, hospitals expect that patients will cooperate in the eligibility determination process.

Hospital Bills vs. Physician Bills

It is important to remember that although physicians provide services at hospitals, most of them are not actually employed by the hospital. This means that the cost of their services would normally not be part of the hospital bill.

You (or your insurer) should normally expect to receive separate bills for the “professional” (physician charges) and the “facility” (hospital charges) associated with your inpatient stay or other hospital service.

Out-of-Pocket Costs

Most types of insurance do not pay the entire cost of health care services. They usually require the patient to contribute to the cost of the services in one or more of the following ways:

Deductible: A deductible is a specific dollar amount a patient must pay for covered services before the insurer pays benefits under the policy. A deductible usually applies to all covered services under the policy, although in some health plans certain services (like preventive or well-child care) are not subject to the deductible. Sometimes deductibles apply to only to specific types of services, like hospital inpatient care or durable medical equipment.

Copayment: A copayment is a per-service deductible. Health plans will often require a copayment for physician office visits or prescription drugs.

Coinsurance: Coinsurance is like a deductible or copayment, except the patient pays a percentage of the cost, rather than a specific dollar amount.

Explanation of Benefits

Your insurer will normally send you an “Explanation of Benefits” when it processes a claim on your behalf. This document will be clearly labeled as an Explanation of Benefits and will prominently state that “This is Not a Bill.”

The Explanation of Benefits provides a summary of the charges that were submitted to the health insurer for payment. It will identify the billed amount, the amount that was paid on your behalf, and amounts (a deductible, copayment or coinsurance) that are your responsibility to pay under your policy.

Because hospital and physician bills are normally separate, you will receive separate Explanations of Benefits for each type of service.