How can you cut down on your medical costs? Pay attention to where you go for medical services. 

Recently I had a patient come into my office and show me the explanation of benefits the insurance company sent him after he had a lumbar epidural steroid injection at a local surgery center. His copay was $325. The surgery center was paid in excess of $2000, about four times the reimbursement for an office-based epidural.

Because I no longer was a contracting provider for the patient’s insurance company, he had chosen to go to a participating surgery center-based interventionalist pain clinic. He wanted to keep his medical bills affordable, a decision I completely understood.

“Why such a high copay?” he asked me. “It’s never been that high before.”

When the patient had the same procedure performed at my clinic, which is office-based, he had a specialist copay of $55.00. “Why the difference?” he said. “The injection was the same.”

Yes, the injection was the same, but the location was different. Unfortunately, this patient got caught by the place of service component of medical care. In short, where you have a procedure affects how much you and the insurance company will pay. The difference in fees has solely to do with location. A surgery center is basically an outpatient hospital setting. It has to comply with many regulations regarding personnel, equipment, space, design, and safety. Consequently, it has a higher overhead than an office-based practice. Insurance companies have recognized the costs of a surgery center by compensating procedures performed there much higher than procedures performed in an office. For this reason, when you go to a surgery center for a procedure, your copay will be the same copay you would pay for a hospitalization.

Place of service also matters when you see an employed physician who works within a hospital or within five miles of the hospital that employs him, and when you have lab work done at a hospital. In both cases, you may have to pay a higher co insurance. The insurance company will also pay more.

Not every procedure can or should be be done in an office-based setting. Sometimes patients would rather have certain procedures done in a surgery center. That’s okay, as long as it’s your decision. Because it should be your choice, make sure you know in advance, what your out of pocket copay or co insurance is going to be prior to scheduling that appointment. Most places will tell you. If they can’t, call your insurance plan and ask them.

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