I-Team: Hospital Charges $17,000 to Stitch a 2-Inch Cut in Emergency Room - NBC New York
I-Team InvestigationsI-Team
MORE INVESTIGATIONS, MORE ANSWERS

SEND TIPS866-news244

I-Team: Hospital Charges $17,000 to Stitch a 2-Inch Cut in Emergency Room

    processing...

    NEWSLETTERS

    A New Jersey man says his local emergency room charged an arm and a leg to heal a minor cut. Chris Glorioso reports. (Published Tuesday, Dec. 8, 2015)

    A New Jersey man says his local emergency room charged an arm and a leg to heal a minor cut.

    Bayonne Medical Center billed Ryan Edgerton and his insurance company just more than $17,000 to treat a 2-inch cut with "five or six stitches" after he accidentally cut his index finger while slicing some melon last summer.

    "There’s no reason a 2-inch cut should have a five-figure bill," Edgerton said.

    CarePoint Health, the for-profit company that owns Bayonne Medical Center, defended the five-figure emergency room bill, saying Edgerton's insurer, UnitedHealthcare, has failed to offer a fair deal for in-network pricing. New Jersey law allows out-of-network hospitals and doctors to charge insurance companies virtually any price for their procedures.

    Andrew Harrer/Bloomberg

    In a statement to the I-Team, CarePoint spokesman Jarrod Bernstein suggested higher out-of-network charges are necessary to keep struggling urban hospitals afloat.

    "Being out-of-network is not a business strategy, it is a survival strategy,” Bernstein told the I-Team in an email. “We would like to be in-network with every insurer in our state provided they could offer us a workable rate of reimbursement that takes into account our obligation to provide care for the underinsured and the uninsured.”

    UnitedHealthcare suggested the $17,000 stitches are just the latest example of CarePoint charges that are 10 to 12 times higher than nearby hospitals participating in United’s network.

    "Out-of-network hospitals should be charging rates that are consistent with other facilities in the community, rather than using emergencies as an opportunity to bill patients excessive amounts and drive up the cost of health care," United spokeswoman Mary McElrath-Jones told the I-Team in an email.

    United Healthcare has already paid most of the $17,000 charge for Edgerton’s stiches. Edgerton has not yet paid his portion -- about $1,170. Bernstein said CarePoint never hires collection agencies to go after individual patients even if they don’t pay. But he insisted charging higher prices to out-of-network insurers is justified because insurance companies offer more lucrative in-network deals to suburban hospitals with more affluent patients.

    “[W]e are calling for a new health care reimbursement system that offers equivalent reimbursement rates for all patient encounters regardless of where they live and irrespective of their economic status,” Bernstein told the I-Team.

    According to CarePoint, only about 7 percent of the company’s business -- 21,000 patient encounters per year -- is with out-of-network insurance companies. But that number could go up. Earlier this year, another CarePoint facility, Christ Hospital in Jersey City, terminated its relationship with Horizon Blue Cross Blue Shield, New Jersey's biggest health insurer.

    Currently, the New Jersey Legislature is considering a bill that would force doctors and hospitals into arbitration if insurance companies dispute their out-of-network charges.

    Assemblyman Craig Coughlin (D-Middlesex), who sponsored the bill, says the proposed law would protect consumers from surprise out-of-network bills. He cited the example of a patient being treated at an emergency room.

    "You’re in distress. You may need a specialist who gets called in. You absolutely want the specialist,” Coughlin said. “But you’re not going to ask ‘Are you in my network? Before you save my life, are you in my network?’”

    New Jersey insurance companies, largely, have come out in support of Coughlin’s arbitration bill.

    “New Jersey has a system of legalized price gouging in health care,” Ward Sanders, President of the New Jersey Association of Health Plans, a trade group representing insurance companies, told the I-Team.

    Sanders added that unreasonable bills are especially problematic for emergency room patients.

    “In emergency services, some out-of-network hospitals and providers have charged astronomical prices -- in some cases the highest in the nation -- forcing consumers to burn through deductibles,” he said.

    But the New Jersey Hospital Association opposes the arbitration bill, contending that forced arbitration would take away the most important leverage hospitals and doctors have when negotiating rates with insurance companies.

    "Hospitals absolutely are at risk of going out of business if they don’t have this leverage in today’s environment,” said Michael Maron, President and CEO of Holy Name Medical Center in Teaneck.

    Maron said instead of forcing arbitration, the legislature should force insurance companies to pay urban and suburban health providers similar rates for similar procedures.

    “I can have two providers. For one, let’s say the bill is $3,000,” said Maron. “The other provider -- the exact same service -- can be negotiated [at] $9,000, three times the amount.”

    Maron said he has empathy for Bayonne Medical Center’s plight as an urban hospital, but stopped short of endorsing the decision to charge $17,000 for a handful of stitches.

    "No, I am not an advocate of that at all," Maron said.

    EDITOR'S NOTE: “After this story was first published, CarePoint spokesman Jarrod Bernstein said he initially misstated the company’s policy on collection agencies. Bernstein now says CarePoint reserves the right to recover payments directly from patients.”

    Get the latest from NBC 4 New York anywhere, anytime