As the Medical Director of the Kansas Business Group on Health I’m sometimes asked to weigh in on hot topics that might affect employers or employees. This is a reprint of a blog post from KBGH:
Dr. Marty Makary, general surgeon at Johns Hopkins who is more famous for his research on health costs and value, tells a riveting story of hospital billing (no, really!) in his book The Price We Pay: What Broke American Health Care–and How to Fix It (pages 167-170). A friend named Dina becomes ill while visiting Marty. When the two of them arrive at the emergency room, she is informed that the ER is “out of network” for her insurance. After some salty language on both sides, both sides agree she can be treated in the ER anyway. But prior to treatment Dina (with Marty’s help) asks for a physical copy of the hospital’s Consent and Financial Agreement form (Dr. Makary calls it the “battlefield consent form”), rather than automatically signing the form on the iPad that is brought to the room. Dina crosses out the clause on the paper agreement that states she would “sign away her financial life” (Dr. Makary’s words) before seeing any bill.
Dina has a minor surgical procedure, recovers, and eventually receives a $60,000 out-of-network bill. Marty shows her what her insurance would have paid had the hospital been in-network using Healthcarebluebook.com: about $12,000, or one-fifth the out-of-network bill. After getting Dina’s consent and requesting an itemized bill, Marty calls the hospital and offers $12,000 to settle the bill, which is refused. He explains to the hospital that Dina has no contractual obligation to pay because she struck out the clause in the contract saying she’d pay whatever they charged. Marty adds that legally the hospital is prohibited from using collection agencies to hurt her credit if she does not pay. The hospital director immediately offers to settle for $30,000, then $25,000, then $19,000.
Marty sticks to his original offer of $12,000, and the bill eventually gets sent to collections. When the collections agency calls, Dina asks them to send her a copy of the Consent and Financial Agreement, the form on which she’d deleted the section indicating her obligation to pay. The collection agency never calls back, and Dina eventually makes a $5,000 donation to the hospital’s fundraising drive, earning a plaque on the wall.
This is, shall we say, a novel way to deal with surprise medical bills. But it has some high-profile proponents. Al Lewis, Harvard-trained attorney and famous skeptic of worksite wellness, told Dr. Makary’s story on his blog. He went so far as to suggest making a card for your employees to carry and has even produced a template. He suggests the card say something to the effect of, “I consent to appropriate treatment and (including applicable insurance payments) to be responsible for reasonable charges, up to 2 times the Medicare rate.”
Needless to say, one party’s idea of “reasonable” can differ radically from another’s. Al says that reasonable charges can be “settled by binding arbitration using the New York law as a model. That law, based on Major League Baseball binding arbitration rules, is well-accepted and has generally been successful at curbing abuses.” [Disclosure: KBGH has a financial relationship with Quizzify not related to medical billing, but rather for health literacy training]
So. Is this a real strategy that at-risk patients could use? It seems under-handed. But some (most) would say that the entire system of surprise out-of-network payments in health care is under-handed, especially when the agreements are, as some have argued, signed under duress. Al Lewis’s website deftly says “Legally, we can’t guarantee this will work. But we know the alternative—signing whatever they put in front of you—carries the risk of much higher bills, and more chance of inappropriate treatment.”
And that’s what we say, too. The Kansas Business Group on Health is not endorsing this practice. We simply want our members to be aware of its growing use by frustrated, scared patients.