When a patient is hospitalized, or diagnosed with a deadly disease, they often have no choice about the cost of their treatment.
They are legally helpless, and vulnerable to price gouging.
Medicare offers decent protection — i.e. limits on balance billing, and no patient liability if a claim is denied.
But under age 65, it is a Wild West — especially for emergency care, and drugs and devices. The more they charge, the more they make. Even good health insurance does not offer complete financial insulation.
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We need more legal protection of patients. In some cases we need price controls.
‘Charging what the market will bear’ is inadequate, even childish, when ‘the market’ consists of desperate patients. Where contracts are impossible and there is no chance for informed financial consent, government can and should step in.
This series describes the new laws that we need. Very little is required in tax dollars….but we do require a strong will to protect.
Assault Phase One: Outlaw surprise billing
This rule must become universal:
If a hospital is ‘in-network’, then any doctor who practices in that hospital is ‘in-network.’
To enforce this, we should adopt Connecticut’s law on surprise billing and balance billing for the entire nation.
Connecticut’s law No.15-146, which took effect July 1, 2016. states the following:
“If a patient receives a “surprise bill” from a health insurer for Out-of-Network services provided at an In-Network facility – the patient will only be responsible to pay the co-insurance, co-payment, deductible, or other out of pocket expense that would apply – if the services had been provided by an In-Network provider. The physician is reimbursed at the in-network rate, unless the patient and provider agree upon something else in advance.”
- Patients who see Out-of-Network providers for emergency services can only be required to pay the equivalent of In-Network costs. This includes Out-of-Network hospitals, transportation services, and providers who are Out-of-Network practicing within In-Network facilities.
- It is illegal in Connecticut for any provider to request extra payment from a patient who is covered by insurance — as the entire purpose of insurance is to negotiate prices for you.
- It is also an unfair trade practice for a health care provider to report a patient’s unpaid surprise medical bill to a credit reporting agency.
Other Connecticut rules include:
- A patient who still receives a surprise bill from an out of network provider in excess of what the patient would owe under the plan’s in-network rate can seek actual damages, punitive damages, and injunctive relief based on the Connecticut Unfair Trade practices Act.
- Connecticut also prohibits health plans from imposing a facility fee for outpatient visits at an off-campus site of a hospital. In fact, billing statements to patients must include a notice that the costs might have been less if they had had the procedure performed at a facility not owned or operated by the hospital or hospital system, and that the patient has the right to request a reduction in the fee.
- For uninsured patients, Connecticut providers may not charge more than the applicable Medicare rate.
Only six states have laws that are even close to this level of patient protection. Let’s establish the Connecticut standard nationwide.
Assault Phase Two: Regulate the fees of emergency rooms and ambulances.
Any hospital ‘contract’ that is signed upon an emergency admission is legally flawed. Such contracts are in fact procedurally unconscionable — because the only way for the weaker party to acquire the services is to agree to the terms dictated by the stronger party. Signed admission forms, which include a promise to pay, absolutely do not constitute mutual assent.
Here is the solution:
- If an ER patient is insured, then the hospital must accept ‘mandatory assignment ‘ of benefits –
i.e. if the insurer pays $500, then that closes the account. (as long as the insurer pays at least as much as Medicare.) No balance billing would be allowed for emergencies. As described in Connecticut law, a patient who received a balance bill could sue for damages.
- ER doctors would be barred from billing separately for emergency, ancillary, and hospitalist services. The hospital would once again be responsible for paying them, and for collecting reimbursement from insurance networks.
Of course hospitals will complain. Many of them have been ambushing emergency patients with huge out-of-network bills, basically to put pressure on insurers to raise their payment rates. Patients are caught in the middle of the power struggle, and this must cease.
Hospitals are supposed to fight emergencies, not cause them. They must be forced to stop abusing their monopoly position toward emergency patients.
Hospitals do deserve lump-sum federal subsidies for uncompensated emergency care. The EMTALA act (which mandates that all patients must be stabilized, whether or not they can pay) was totally unfunded. That was a mistake that can be corrected now.
For the insured population:
Emergency care must be exempt from the deductible in all health insurance plans. (ER Co-pays up to $250 are acceptable.)
The ridiculous HSA plans (where absolutely nothing is covered until a high deductible is met) must be legally amended.
Ambulances should be fully funded by the federal government, including air ambulances. The cost would be from $14 to $18 billion a year, which is about ten days worth of Medicare spending.
It is far better for us all to pay a few dollars a year in extra taxes, versus a tiny number of us to be stuck with a huge ambulance bill. Medical transport should be a public service, instead of another industry on the take.
Note: We could allow a $100 user fee, in order to discourage the use of ambulances for non-urgent transport to drugstores or to doctors’ appointments. There could be a $500 user fee for air ambulances.
Stay tuned for the next article in the series in which I discuss Big Pharma.
Bob Hertz is a retired insurance broker. He learned about health care from Uwe Reinhardt, Joseph White, Dr. Robert Evans, and George Halvorson a fellow Minnesotan.