Column: A new law aims to protect you from surprise medical bills (read: bonkers)
The Consumer Financial Protection Bureau last week warned debt collectors and credit agencies to be more careful when it comes to trashing people’s credit scores over medical bills. stratospheric.
“Too many Americans have been shocked by surprise medical bills and forced to pay under credit report duress,” CFPB Director Rohit Chopra said.
What he means by “coercion on credit reports” is that healthcare providers threaten to let debt collectors hold patients’ credit scores hostage unless they even pay the most inflated medical bill.
“Our action today should remind us not to collect or provide credit report information regarding invalid medical debts,” Chopra said.
This is an important guarantee. A study 2019 found that medical bills were a primary factor in about two-thirds of personal bankruptcy filings in the United States. More than half a million American families go bankrupt each year because they cannot afford health care.
But the new law won’t help people who are already feeling the pressure of unpaid medical bills.
People like Mei Li.
The Connecticut resident contacted me the other day asking for help with nearly $4,000 in charges for a pair of stitches.
Li, a animator and illustrator for children’s books, is not insured. She told me she had to choose between getting health coverage and trying to start her own business.
Although it’s not a choice anyone should have to make, Li, 35, bet that because she’s relatively young and healthy, she could invest in her business rather than apply for coverage through of the Affordable Care Act.
She played badly.
In August, Li slipped and fell while out with her boyfriend. The cut on her chin wasn’t too bad, but it was clear she would need stitches to close it.
“Unfortunately, all the urgent care clinics were closed,” Li told me. “So I had to go to the emergency room at Norwalk Hospital.”
She said she explained in advance that she was uninsured and asked for an estimate of the cost of her treatment. No one at the hospital offered a figure, she said.
After waiting several hours to see a doctor, Li said, she was finally ushered into an exam room and given anesthesia, two stitches and a bandage. That’s it. The whole procedure took less than half an hour.
The first invoice was for $3,197.02.
It included an ER doctor fee of $405, an “emergency department” fee of $193, an additional ER doctor fee of $663 (she only saw one), $100.02 for “pharmacy” (probably the shot and stitches), plus three additional (and mysterious) charges for “emergency service” that totaled $1,836.
Li was charged an additional $689 for returning a few days later to have the two stitches removed.
These fees were reminiscent of my recent column about how an electronic health record system at Scripps Memorial Hospital in Encinitas automatically imposes price hikes of up to 675% on routine medical costs.
Documents leaked to me by a former nurse at the hospital showed that stitches that cost only $19.30 were automatically marked up to $149.58.
It is important to stipulate that, if they can, people should pay their medical bills. Even if you feel like you’ve been scammed, you’ll only make things worse by ignoring the expiry notices.
Let us reiterate, however, that it is completely intolerable for the inhabitants of the richest and most powerful country in the world to have to choose between earning a living (or paying the rent, or putting food on the table) and receiving health care.
“I decided to wait and see if my business would pick up before paying the bills,” Li said.
The hospital had other ideas. After several months, he handed over Li’s unpaid bills to a debt collector.
She said she’s been scrambling to resolve the situation ever since, but couldn’t find anyone on the phone to help.
“Every time I called, either the line was busy or I had to leave a message,” Li said. “Then they never called back.”
So she contacted me and I contacted Norwalk Hospital’s parent company, Nuvance Health.
Nuvance spokesperson Amy Forni declined to discuss the specifics of Li’s bill. She did, however, point out that Norwalk Hospital, like almost all medical facilities, charges patients not only for treatment, but also for the cost of maintaining health resources and treating anyone who seeks emergency care.
“Emergency departments are equipped with resources and highly trained personnel to identify, diagnose and treat serious medical emergencies,” she told me. “For these reasons, emergency departments are a more expensive place of care than primary care offices or urgent care clinics.”
All true. Yet for uninsured people like Li, ER is often the only choice available.
“In most cases, we can estimate the cost of care for planned medical procedures and treatments,” Forni said. “However, not for emergency departments…as staff have to triage patients before they know what care to provide and how much it might cost.”
She said Norwalk, like most hospitals, will work with patients facing financial hardship.
If such contingencies were enough, however, there would be no need for debt collectors or other heavy-handed tactics. The fact that medical bills are driving so many people out of business shows that whatever financial help hospitals offer is not doing the trick.
According to the CFPB, 17% of U.S. adults “had significant, unplanned medical expenses” in 2020, with the median bill reaching $2,000. Nearly a quarter of Americans “have been left without medical care due to an inability to pay,” the agency said.
The No Surprises Act aims to make the healthcare system less hostile.
Passed as part of a spending bill 2020, the law prohibits healthcare providers from slapping patients with outrageous charges for out-of-network care, especially in situations where people have no choice but to seek emergency treatment.
It also requires that patients receive easy-to-understand notices of their rights and who to contact in the event of a problem.
As a concession to medical providers, the law includes an arbitration provision – that is, you cannot sue for surprise bills, but instead must agree to arbitrate any disputes.
Researchers at USC and the Brookings Institution noted an arbitration clause “was a key request from vendor groups, who likely hope to be able to obtain higher prices through an arbitration process”.
Xavier Becerra, the health and human services secretary who previously served as California’s attorney general, said in a statement that the law unsurprisingly “is the most critical consumer protection law since the Affordable Care Act.”
“We’re getting patients out of the middle of the food battle between insurers and providers, and ensuring they aren’t faced with eye-watering, bankruptcy-inducing medical bills,” he said. “It’s the right thing to do.”
He is. It’s also another dysfunctional aspect of America’s profit-driven healthcare system that could be eliminated overnight with the introduction of a “Medicare for all” approach that would make billing transparent, consistent, and reasonable.
Li told me that Norwalk Hospital contacted her as a result of my outreach, but she had yet to be flexible with her outstanding bills. He still wants his pound of flesh.
My advice: pay. Rest assured.
And support lawmakers who understand our current health care system isn’t working.