Health Law

New York Times article on hidden hospital costs sparks calls for change, suggestions for consumers

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A New York Times (reg. req.) article about hidden surgery and hospital costs that can hit insured patients with unexpected bills of up to $100,000 or even more is apparently striking a chord with readers.

The newspaper tells the story, among others, of a 37-year-old man who needs neck surgery. He negotiates with his surgeon, who is paid $6,200. Then a second bill arrives for $117,000. It is the fee being charged by the physician who assisted in the operation. Fortunately for the patient, his insurance company paid that bill in full.

Not all patients are so lucky.

In over 1,100 comments responding to the article, readers, including some self-described lawyers, repeatedly say they have suffered from similar practices. They say hospitals and doctors provide up-front estimates of far less than patients are actually charged, once add-ons such as a second “out-of-network” surgeon and anesthesia fees are totaled up, and consulting doctors bill hundreds of dollars for simply stopping at a patient’s bedside, saying hello and asking how the individual is feeling.

A small fraction of the responses to the article are from individuals who report they were pleased about the price they paid for the care they received. These commenters often say they were treated in a country outside the U.S. Others say they are patients of an American HMO such as Kaiser.

Meanwhile, the Times report is sparking calls for change, both in the comments and elsewhere.

“Such stories add to the mountainous evidence that the self-correcting features of the free enterprise system that work fine in other areas are absolutely incapable of regulating the medical industry,” says an Atlanta Journal-Constitution editorial, referring to the Times article. “The information imbalance between the patient and the provider is much too vast; the power discrepancy between patient and provider is much too vast; the process is too complex. In short, when medical decisions are left ‘to the patient and his or her doctor,’ the patient is at a huge disadvantage.”

A Los Angeles Times (sub. req.) editorial. says “the heart of the problem is the incentive that the current system gives to providers to do as many procedures as they can and charge as much as possible for each one. The solution lies in changing that incentive.”

While these two newspapers don’t specifically call for legislative reform, Consumer Reports responds to the Times article by pointing to a recent New York state law. It will soon require better up-front disclosure by providers of expected costs and sets up an independent review process to arbitrate billing disputes.

The law is expected to put the burden on insurers and health care providers to figure out between themselves how much a procedure should cost, rather than pressuring insured individuals to ante up when there are discrepancies, the magazine says.

Another Consumer Reports page on surprise medical bills provides the full text of the law (PDF) and suggests it could be a model for other states.

In comments to the New York Times article, a number of individuals offer suggestions about what patients can do to protect themselves against overcharges. They include: Crossing out “usual and customary” and substituting the word “reasonable” concerning doctor and hospital fees when signing forms, specifying the exact amount the patient has agreed to pay and stating that no “out-of-network” care that will not be fully covered by insurance is authorized.

Once admitted, the patient or a family member can turn away would-be consulting doctors who stop by the individual’s bed. However, the use of out-of-network providers, such as an assisting surgeon, an anesthesiologist or physical therapist working at an in-network hospital under a third-party arrangement may not be clear until an unexpected and hefty bill arrives.

When bills start arriving, they should be scrutinized for errors and excessive charges. If bills add up to far more than what was estimated in advance, those who reported protesting to providers (sometimes with threats of litigation) might see some or all of the excess amount written off. Likewise, insurers who initially refuse full reimbursement may reconsider if that decision is appealed.

However, a number of commenters said they simply refused to pay the bill and suffered through the resulting collection efforts and damage to their credit ratings. A few spoke of having to go to another doctor, or opting to avoid medical care, due to being charged, or fearing that they could be charged, more than they could afford without advance warning.

See also:

Becker’s Hospital Review: “EmblemHealth subsidiary to establish $3.5M fund for violating out of network disclosure requirements”

New York Times (reg. req.): “FTC Wary of Mergers By Hospitals”

Wall Street Journal (op-ed, 2013): “Jeffrey Singer: The Man Who Was Treated for $17,000 Less”

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