Federal law requiring hospitals in Indiana and Illinois to reveal their charges may help injury victims protect against inflated medical bills and unnecessary services
This summer, a federal district court overruled hospital industry legal challenges to a new federal regulation established by the Department of Health and Human Services (HHS) commonly known as the “Hospital Price Transparency Rule.” It is now scheduled to be effective on January 1, 2021. To read the court’s opinion, see American Hospital Association v. Azar, Civil Action No. 1: 19-cv-03619 (CJN) (D.C. June 23, 2020).
Of importance, the court points out that this new rule is being implemented by the agency in accordance with Congress passing the Patient Protection and Affordable Care Act, Pub. L. No. 111-148 § 10101(f), 124 Stat. 119, 887 (2010) (“Affordable Care Act.”).
From Azar (emphasis added):
“Entitled “Bringing down the cost of health care coverage,” and as most relevant here, the statute [ACA] mandates that [e]ach hospital operating within the United States shall for each year establish (and update) and make public (in accordance with guidelines developed by the Secretary) a list of the hospital’s standard charges for items and services provided by the hospital, including for diagnosis-related groups established under section 1395ww(d)(4) of this title. 42 U.S.C. § 300gg-18(e) (emphasis added).”
Of course, the industry announced to the media that it would be appealing the court’s decision. See, “U.S. Hospitals Lose Legal Challenge to Trump Price Transparency Rule,” written by Jonathan Stempel and published by Reuters on June 23, 2020.
What is the Hospital Price Transparency Rule?
This new federal regulation was proposed by the Centers for Medicare and Medicaid Services in August 2019 as 84 FR 39398; read the final rule here. It changes what hospitals have to reveal insofar as the rates they charge for the various goods and services they are providing to patients.
This information has not been provided in the past. It is not available today. It is only through this new federal law that hospitals will have to reveal their charges beginning next year.
Hospitals have kept this information private under the argument that this financial information was proprietary and a trade secret. The health care industry has argued that revealing what they are charging is only going to lessen their willingness to lower their rates. They urged that this new regulation would be unduly burdensome.
Nevertheless, as of January 1, 2021, hospitals in Indiana, Illinois, and the rest of the country must make public their charges, which may include revelations of their negotiated rates with various insurance carriers.
Hospital Charges after Accidents and in Personal Injury Cases
For accident victims in Indiana and Illinois, no matter what happened to them (e.g., truck crash, auto accident, on the job injury, etc.) there will be immediate emergency medical care starting with the first responders to the scene as well as the initial care provided at the hospital to help save their lives and stabilize them. Afterwards, they may require a series of surgeries or extensive care as an in-patient before moving on to rehabilitation, physical therapy, and other forms of long-term care.
The sad truth is while the accident victim and their loved ones are still reeling from the life-altering accident itself, there will soon be the financial realities to add additional pressure to their situation. Lost wages and the need to make ends meet at home, particularly if the accident victim is the family’s main breadwinner, can be a major stressor. However, another cause of great anxiety in these situations is the incoming hospital bills which can be shockingly high.
Those advocating for personal injury victims and their families are well aware that hospitals are known to consider whether or not accident victims have insurance coverage for their medical expenses. If a patient does not have health care coverage, then the patient may be liable for hospital charges that are much higher than they would have on their bill if they had insurance.
The truth is that hospitals have financial incentives to negotiate special deals with insurance carriers. Those policyholders may receive the same goods and services as the uninsured patient, but they will not be billed as much.
Transparency Rule May Reveal Hospital Hijinks in Billing
The new Transparency Rule may be a powerful tool for accident victims and their advocates to use in determining what a hospital has been doing insofar as providing care versus charging for it. The fact that hospitals overcharge patients is beyond dispute at this point. It’s called “hospital profiteering.” See, “3 Ways Hospitals Overcharge You (And What Can Be Done About It),” written by Robert Pearl, M.D. and published in Forbes on September 5, 2017; and Derlet, Robert W., et al. “Corporate and hospital profiteering in emergency medicine: problems of the past, present, and future,” The Journal of emergency medicine 50.6 (2016): 902-909.
1. Upcoding and Discount versus Full Price
For instance, the new Transparency Rule may well reveal when hospitals are charging at their full price or if they are charging at the discounted rate they have negotiated with an insurance carrier. It may also reveal “upcoding,” where the hospital bills for a costly procedure when the patient may not have received that exact treatment, but a lesser version of it that comes with a lower charge. See, e.g., “How Doctors and Hospitals Have Collected Billions in Questionable Medicare Fees,” written by Fred Schulte and David Donald and published by the Center for Public Integrity on May 19, 2014.
2. Overcharges
Another revelation that may result from the new Transparency Rule is discovering that the hospital is charging different prices for the same treatment depending upon the patient. For an overcharging example, read “How a $175 COVID-19 Test Led to $2,479 in Charges,” written by Marshall Allen and published by ProPublica on August 1, 2020.
3. Mysterious Fees
Additionally, the new Transparency Rule may help accident victims and their advocates identify added-on fees that are unnecessary, duplicative, or simply nonsense. For more read about the mysterious fee of “trauma response“ in the article entitled “A Baby Was Treated With A Nap And A Bottle Of Formula. The Bill Was $18,000,” written by Jenny Gold and Sarah Kliff and published by Kaiser Health News on July 2, 2018.
Accident Victim’s Personal Injury Claims and Hospital Liens
When an accident victim and his or her family comes to the point in their circumstances where they are ready to deal with the legal implications of their situation, they may find they have legal rights for damages to pursue against one or more wrongdoers. In this pursuit, demand letters may be sent, settlement negotiations may occur, and lawsuits may be filed.
However, independently from this legal battlefield comes the likely filing by the hospital of a lien in the county records designed to make sure that its final bill is paid. That lien will be supported by whatever documentation the hospital provides. It may well include upcoding, overcharges, mystery fees, and more.
Accordingly, it is important for accident victims and their families who are seeking justice in legal claims against wrongdoers for their injuries to know that this new federal regulation will require hospitals in the United States to make their charges available to the public. In 2021 and beyond, accident victims will be better able to deal with profiteering hospitals while fighting for right against employers, manufacturers, or other wrongdoers who have breached their duty of care and caused the victim’s accident and injuries.
If you or a loved one have been involved in a serious accident, it is vital to understand your legal rights insofar as the personal injury laws of Indiana and Illinois as well as your rights regarding medical care and billing practices by the hospital(s) where you were treated. Please be careful out there!
