Beware of Hospital Outpatient Bills Under Medicare

A quirk in Medicare payment rules means that a hospital can bill your parent for much more in outpatient charges than a doctor or independent lab can. Under Medicare Part B, doctors can charge no more than 15 percent above what Medicare pays them. But no such limit applies to hospital outpatient clinics, so hospitals often stick patients with 40 to 50 percent on top of what Medicare pays. Even if your parent has supplemental insurance, she could wind up personally owing another 20 to 30 percent of the total bill.

To help avoid this billing blow, check with the hospital administrator's office in advance to see whether it will accept "assignment" of the Medicare amount -- meaning the hospital agrees to charge your parent no more than 20 percent above the amount Medicare pays the hospital. If the answer is no, find out whether the procedure can be performed in either an independent clinic or your parent's doctor's office or another doctor's office. If it must be performed in a hospital outpatient clinic, your parent might ask her doctor to refer her to another hospital -- one that doesn't charge an arm and a leg.