Unknown to most consumers, many hospitals and physicians offer steep discounts for cash-paying patients regardless of income. But there’s a catch: Typically you can get the lowest price only if you don’t use your health insurance…The difference in price can be stunning. Los Alamitos Medical Center, for instance, lists a CT scan of the abdomen on a state website for $4,423. Blue Shield says its negotiated rate at the hospital is about $2,400. When The Times called for a cash price, the hospital said it was $250.
Hospital executives say they don’t like to charge insured patients more, but say that’s a result of the country’s broken healthcare system. At Long Beach Memorial Medical Center…the hospital’s chief financial officer said insured patients like her pay more to subsidize the uncompensated care given to the uninsured and low reimbursements for Medicaid patients.
[Jo Ann] Snyder, [a] salon manager, stumbled across the two-tier system accidentally. She has filed suit against her insurer, saying she hopes her case will lead to more disclosure of the price options, and ultimately lower treatment costs for patients.
The Long Beach woman said she sought treatment in 2009 for a pain in her abdomen. First her doctor ordered a CT scan of her abdomen and pelvis at Liberty Pacific Medical Imaging, an independent facility near Long Beach Memorial.
She got approval from Blue Shield, and she paid the negotiated rate of $660. Snyder underwent surgery on her colon, and her doctor ordered another CT scan in January 2010 because she felt lingering pain.
This time, her surgeon referred her to the hospital’s imaging center. Snyder said she assumed her bill would be about the same because it was the identical test. Instead, Blue Shield’s rate with Long Beach Memorial was $3,497 and the insurer told Snyder she owed $2,336, records show.
Incensed by having to pay nearly four times as much for the second scan, she started searching for an explanation. That’s when she discovered that the hospital’s cash price was less than half what she owed through her insurance.
In a complaint filed last month in Orange County Superior Court, Snyder accused Blue Shield of unfair business practices, breach of good faith and misrepresentation over her medical bills. The suit seeks class-action status on behalf of other Blue Shield customers.
A spokesman for Blue Shield said the case has no merit and the nonprofit insurer negotiates the most favorable rates it can.