California lawmakers introduce plan to end surprise ER bills
vox.com
vox.com
This was certainly a defensive, risk-averse treatment, but I think it was a reasonable decision. I think my insurance paid about 8,000. The magic words on the bill were "Patient is nor responsible for the difference between the amount paid by insurance and amount billed". This is because I went to an in-network hospital with a contract.
I talked about this with some of my physician friends, and they told me this is typical. In fact, the original bill doesn't represent what they expect to be paid. It represents an extreme position taken to start negotiations with an HMO or other insurance company.
Here's the trap: if you don't have insurance, you are not just hit with the high bill that represents what the hospital would pay an HMO, you're hit with he wildly inflated bill they send to an HMO in anticipation of being paid much less.
So if you don't have insurance in the US, you're doubly hosed. I know I'm supposed to hate my HMO and all, but to me, this is a bit like belonging to a union. As part of a powerful group, I have someone not just paying the bill but knocking it down for me. I may not like being part of a group plan, but on my own, I'm toast.
Unfortunately, this story shows that you can still end up on the wrong side of this billing practice even if you do have insurance, because some hospitals remain out of network for all insurance, and if you're incapacitated or simply don't have the plan in front of you and a couple hours to research the billing practices of various hospitals as your head is bleeding and you're being taken to the ER, you can end up in a similar situation to an uninsured person.
It turns out that it may in fact be impossible to insure yourself against ruinous bills. Nicely done, there.
Clearly, that is not the case.
And in regards to your last point, what has made the system so perverse is the insurance companies in the first place. If most people were actually responsible for paying all of their healthcare costs themselves, the prices would be pretty cheap.
For example, I live in Tanzania, and I can get medication that is over $500/month without insurance in the US, or like $75 with insurance, for around $1-$2. Also, I can get a tooth pulled for under $5.
No one has health insurance here, I don't think it even exists, and therefore, hospitals are forced to charge an amount that the people can pay for. The system actually works, and if for some reason you can't pay, you can volunteer at the hospital until your bill is paid off.
Consequentially, even though there aren't laws about accepting all patients (hospitals are allowed to turn away whoever they like), they don't, because they know they will be paid at the very least in labor.
Though, honestly, at this point in the US the system is so fucked up that I'm not sure it's even possible to create a free-market system anymore. It pains me to say this (as a staunch libertarian), but I think maybe it would be better at this point for the government to just foot the bill for everyone.
No. Such panic-inducing tactics are not likely to make someone a better negotiator.
Learned helplessness is a real problem.
> Clearly, that is not the case.
when it "clearly" is the case.
I have been close to ruin and you can reach a point where things are so overwhelming that you basically just give up. I am sure some people are natural fighters but a lot of people aren’t. In addition when you run out of money you can’t afford lawyers and other advice which makes things even worse. It’s a really bad negative spiral.
We manage to solve all kinds of other problems with these same structures despite the fact that the people working in them have not achieved your level of sainthood.
We have too much third-party payer, especially mandated third-party payer, that distorts the face value of these services.
Sectors of health care that are largely cash-based, such as corrective eye surgery, many orthodontic treatments, most plastic surgery, are all quite cheap and have up front pricing that is easy to follow. Actual healthcare reform needs to rip out the old, broken systems and replace them with a simple plan for chronic healthcare needs, insist on transparency in pricing, and let the market take care of the rest.
So it was kind of negotiated, but through insurance and their negotiated rates not an individual's out of pocket negotiated rates.
This was also a service where I wasn't informed that a second doctor was out of network, which also screwed me me (and there's literally nothing I can do about this after the fact).
Of course, that stance is in their best interest and not mine... so maybe I wasn't being forward enough?
This all feels quite ridiculous.
It honestly depends on the individual hospital. They almost always have a contract with insurance that they can't accept less, but nobody's checking and it's common for them to do so. Some hospitals are reasonable and especially if they see if you have low income/assets, will settle with you. Others don't care at all and will not accept any less and just send you to collections or sue.
With medical care, I would guess the court would side with the medical care provider, and negotiating beforehand would help you, whereas not negotiating beforehand would give a blank check to the seller (as the system is now).
Yes, it works if they have actually stuck you with a bill that exceeds your net worth and expected income, but in that case you can't afford and/or don't need a negotiator -- you just default. It also works if you've stirred up a media frenzy, but you can't turn that into a business model for obvious reasons. The only place it does reliably work is in the imagination of those looking to downplay the severity of the current state of affairs.
However, starting about 5 years ago some hospital got the idea they could refuse to negotiate with everyone and it seems to have spread. Now there are a bunch of these unreasonable hospitals. You can open up all your finances and show that you have no money and that their bill is 100x medicare rate and they would rather get $0 and you declare bankruptcy. I guess they end up getting more revenue overall this way?
gowld, I'm looking at you.
This sounds a lot like going to court with/without getting a lawyer.
I do agree that hospitals should be paid for the services they perform. It's just that our society's free market notion of price-agreement is predicated on voluntary contracts.
> I talked about this with some of my physician friends, and they told me this is typical. In fact, the original bill doesn't represent what they expect to be paid
For instance, if the hospital is billing under a theory of reimbursement for services provided on your behalf, lying about their costs is textbook fraud.
Or are there explicit state laws that allow hospitals to collect from ER patients without a contract in place? If so these need to be reformed to have uniform charges no matter who the payer is. Like say towing.
The wiki page is brief but ok https://en.wikipedia.org/wiki/Quasi-contract
Copyedited...
Still, it seems worthwhile to work towards penalizing hospitals for routinely going over the line, otherwise they will continue to monetize the difference between what is right and what they can get away with.
And on that front, I still have to ask how it's not straightforward fraud to lie about the expenses incurred? If we're roommates and I pick you up a gallon of milk at the store knowing you want some and will reimburse me, but I add it to our tab as $20 - am I not attempting to defraud you?
Trumped up costs do routinely happen across all sectors. It just seems on this topic that grassroots pushback is never discussed, yet could be quite appropriate. For example, a self-help form letter that demands an "out of network" hospital substantiate exactly why their expenses were double that of every other hospital.
It is fraud. It's just not prosecuted, because it's a wealthy corporation doing it.
> In 2006, per-capita spending for health care in Canada was US$3,678; in the U.S., US$6,714. The U.S. spent 15.3% of GDP on healthcare in that year; Canada spent 10.0%.[6]
https://en.wikipedia.org/wiki/Comparison_of_the_healthcare_s...
I spent years working in medical billing. You can negotiate these down to prices as much as 10% of the bill. Typically, you go: "I don't have insurance, but I'm willing to pay 50% now."
The vast majority of the time, they'll accept, because that's more than they expected.
DON'T give them the option to distribute the payments. Explain, you're willing to pay now at X% AND that you don't have insurance. The person on the other end is usually a human and can accept that (somewhere in the billing chain).
If they offer to distribute payments, explain financially, that may put more burden on you. If you actually can't pay or are living pay-check-to-paycheck, explain it may bankrupt you. At that point, they get nothing, so negotiations can ensue.
Another thing to do is debate billing codes, as the error rate is relatively high. For reference, even a 1% error rate means out of 10 visits you're likely to get one, because you'll have multiple billing items every visit.
So, we had no incentive to really negotiate in that regard.
Arguably a significant percentage of healthcare companies have their billing setup in such a way. Or they handle it entirely in house.
It's good advice but... how broken is our society that this advice is needed and we can't just force companies that are extorting people over healthcare costs to charge reasonable prices.
Second, the bill would regulate the prices that the hospital could charge for its care, limiting the fees to 150 percent of the Medicare price or the average contracted rate in the area, whichever is greater.
Put another way - the government gets a 33% discount compared to private insurers.
If the argument is that medicare prices are unreasonably low, that seems like a different issue.
My wife got an allergy test at a local allergy clinic, but she had 20% coinsurance so we tried to figure out how much it would cost. Everyone there treated us like garbage. Even when we called the billing department in advance they told us there was no way to know in advance how much the basic allergy test would cost until she saw the doctor. So we went to the clinic (stupidly), and the nurses just acted like we were crazy. Finally one did tell us what the bill would be:$12k. I had researched these tests online and was floored; that’s way more expensive than it should be, and the doctor who gave her a referral had told us it would be a reasonable price. So we were in the awkward position of just leaving the appointment. The doctor then basically talked to us somberly like we were the poorest people on earth, and said “listen, most of the test is for allergens that don’t exist in northern California.” If I just give u the local ones it’ll be like $1800.” I started laughing. Later on I read an NPR story about a lady who had a$48k allergy test from there. Just a complete scam, much worse than a car dealer because at least there they will tell you a price and they will not sell you ten extra useless cars evenif you don’t explicitly say “don’t give me ten superfluous cars for no reason.” Anyway, we got the limited test, and at the end the doctor said “listen I’m not supposed to do this, but given the financial hardship I’ll make an exception. If I don’t put the results in the system you’ll only be charged for the visit.” And he just wrote the results on a yellow notepad paper and tore it out for us.
Tldr we were treated like annoying busybodies for asking the price at an in-network facility, and then treated like indigents when we balked at paying way more than anywhere else charges, for totally bs procedures.
And this is for emergency rooms where typically you don't have a choice.
I assume you mean by "provider" humans like doctors, nurses, aides etc.
Drug and device prices are essentially not regulated. Medicare/Medicaid pays a fixed percentage of the price set by the company -- but that price is indeed set by the company!
(I used to work in pharma and this dynamic was an important part of our pricing plans)
If you ever need a drug with an enormous copay (say, $2000/month) you can often contact the manufacturer and get most of that copay rebated. WTF? Well the manufacturer wants a high list price for the drug so that they get paid a lot by insurance companies and MC/MC. Paying your copay means you won't object to the prescription, the rest of which (which is much larger than the copay) is paid by third parties.
Hospitals cannot charge less than they charge insurance otherwise it would be constituted as insurance fraud. This ends up meaning that insurance rates almost exclusively dictate the floor at which healthcare providers can charge their customers.
This will simply prevent hospitals from taking advantage of consumers that lack group negotiating powers.
This implies that all insurers pay the same rates, which I think is not true.
Not sure where you heard that, but it's simply not true. First and foremost, every insurer negotiates different rates with hospitals and other facilities. Second, where is the insurance fraud when a hospital charges an uninsured patient less than list prices, given that no insurer is involved in the transaction?
Per https://www.healthcare.gov/health-care-law-protections/rate-... you can verify that insurers are required to spend a fixed fraction (80-85% depending on the size of the group insured) on premiums. With their own costs, profits, etc taken out of the remaining. Which means that the more they pay, the more profit they can potentially make.
Therefore it is in the interests of insurance companies that hospitals be expensive but predictable. A hospital with high premiums that can be negotiated down after the fact at need is both. (Better yet is to have a pool of catchable fraud. You look as hard as you need to to get your numbers where you want them.)
So, they introduce a bill that will reduce patient billing abuse in CA.
Based on the article, it seems like Zuckerberg Hospital was especially egregious in abusing it's patients with billing.
I hope they can continue to crack down on Hospital overbiling.
Come on, we don't need this invective. Sure, I can find a reason to be outraged every day by some legislative decision someplace but in the main, we still have roads, air traffic control, health and safety rules etc.
This has to become a national effort to curb these exploitative and unfair billing practices. It’s simply outrageous.
About 80 percent of its patient population either receives publicly funded health insurance (Medicare or Medi-Cal) or is uninsured. SFGH also cares for the homeless, who make up about 8 percent of its patients.
They effectively use the high rates for privately insured folks to subsidize their public mission. Of course this all speaks to a really broken health care system, but it's not like uninsured people would have been charged even more than $20k.
Regulation can help here.
So, under their billing practices, if you suffer major trauma, say in a vehicle collision, and are taken to SFGH, you may win multiple lotteries: major injury, recovery time, major medical bills to pay, and the chance to pay some other people’s medical bills as well, depending on the hospital policy, and whether you have an HMO or PPO (details are complicated.)
The thing that most US Americans stumble over here is their general expectation that goods and services have a price, and that bargaining for a better price is not an option.
We do not expect to bargain over groceries in a supermarket, or gasoline when fueling, or most other goods. In a professional setting, like a medical office, trying to negotiate a price seem inappropriate. But behind the scenes, a vast network of third parties are negotiating on behalf of other patients, and the uninformed or naive consumer not only pays “retail” but is asked to pay a wildly inflated price that all the third parties know is merely an initial offer.
(415 and 650 area codes)
The amount of mental energy that Americans spend on health care just seems absolutely nuts to me. How much productivity does your country lose because people have to spend time even thinking about things like this?
Either deregulate, or socialize the ridiculous costs.
This incident does illustrate how corrupt health care is in the US, and public institutions are just bad as private ones.
http://www.insurance.ca.gov/01-consumers/110-health/60-resou...
"Does the New Law Apply to Everyone? The new law applies to people with health insurance policies or plans regulated by the California Department of Insurance or the California Department Managed Health Care that were issued, amended, or renewed on or after July 1, 2017. It does not apply to Medi-Cal plans, Medicare plans or “self-insured plans.”"
Sure this is a step in a good direction but there's only so many band-aids you can apply to a gunshot wound. While unscrupulous practices like this bill takes aim at should be weeded out it strikes me as hopeless in light of the bigger picture.
Ultimately I think we're going to need some combination of legislated cost controls and care rationing based on QALYs. Otherwise healthcare will collapse the entire economy. This will all be hugely unpopular.
In this case the problem is exacerbated by the way that privately insured patients are being exploited to subsidize publicly insured patients;
“A hospital spokesperson initially told Vox that the hospital’s focus is on serving those with public health coverage, even if that means offsetting those costs with high bills for the privately insured.”
It should be illegal to charge two different people different prices for the same procedure at the same hospital. At a more granular level, it should be illegal to price discriminate on anything that can be itemized.
The middle and upper class patients are exploited to pay for publically insured patients who get service below cost which the hospital can’t legally turn away.
I think you're close to a solution with minimal regulatory intervention (Which so far has only made things even more expensive: ACA for example).
I'm curious how this would be reconciled with insurer networks though. A cost savings to insurers IS to have networks and discounts.
2. This sort of cost savings to the insurers is more moving the costs to other people, thus negating most of the cost savings incentives.
Second, the bill would regulate the prices that the hospital could charge for its care, limiting the fees to 150 percent of the Medicare price or the average contracted rate in the area, whichever is greater.But aren't the provider side actors (hospitals, insurance networks, etc) the best placed to figure out how to control costs? It seems like a significant reason therefore for high costs may be because they simply do not feel any significant pressure to reduce them, in part precisely because of abusive behavior like this. If the spigots of inflowing coerced money are tightened, wouldn't that itself be motivation to try to find savings? It is in other industries at least. Same thing with more information and transparency, if providers are required by law to have all the costs laid out upfront and that is all they are ever allowed to collect that itself seems like a reasonable first step towards at the least motivating them to get their own internal systems in order.
That's a charitable way of putting it. It turned the insurers into money movers skimming their profit of the top. It somewhat incentivized them to let costs skyrocket. The more money that changes hands through them the better. A fixed % of a big number is more than a fixed % of a small number. The only thing that stops insurers for covering anything at any price and then just passing the cost and letting premiums really go crazy is that there's still some traces of competition left in the market so people (corporate persons or otherwise) will jump ship to other insurers if premiums get too high.
You can look at the profit limits as incentivizing them to cover more expensive care (which it does do) but it comes at the expense of removing any reason for insurers to seriously care about cost so long as they're somewhat competitive with whoever their competition is. That's a very big tradeoff.