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California lawmakers introduce plan to end surprise ER bills (vox.com)
121 points by howard941 23 days ago | hide | past | web | favorite | 115 comments

I spent a night once in the ER for observation. I never got anything but Tylenol, though I think the concern that led to the overnight stay was reasonable. The bill was $16,000.

This was certainly a defensive, risk-averse treatment, but I think it was a reasonable decision. I think my insurance paid about 8,000. The magic words on the bill were "Patient is nor responsible for the difference between the amount paid by insurance and amount billed". This is because I went to an in-network hospital with a contract.

I talked about this with some of my physician friends, and they told me this is typical. In fact, the original bill doesn't represent what they expect to be paid. It represents an extreme position taken to start negotiations with an HMO or other insurance company.

Here's the trap: if you don't have insurance, you are not just hit with the high bill that represents what the hospital would pay an HMO, you're hit with he wildly inflated bill they send to an HMO in anticipation of being paid much less.

So if you don't have insurance in the US, you're doubly hosed. I know I'm supposed to hate my HMO and all, but to me, this is a bit like belonging to a union. As part of a powerful group, I have someone not just paying the bill but knocking it down for me. I may not like being part of a group plan, but on my own, I'm toast.

Unfortunately, this story shows that you can still end up on the wrong side of this billing practice even if you do have insurance, because some hospitals remain out of network for all insurance, and if you're incapacitated or simply don't have the plan in front of you and a couple hours to research the billing practices of various hospitals as your head is bleeding and you're being taken to the ER, you can end up in a similar situation to an uninsured person.

It turns out that it may in fact be impossible to insure yourself against ruinous bills. Nicely done, there.

> Here's the trap: if you don't have insurance, you are not just hit with the high bill that represents what the hospital would pay an HMO, you're hit with he wildly inflated bill they send to an HMO in anticipation of being paid much less.

I spent years working in medical billing. You can negotiate these down to prices as much as 10% of the bill. Typically, you go: "I don't have insurance, but I'm willing to pay 50% now."

The vast majority of the time, they'll accept, because that's more than they expected.

DON'T give them the option to distribute the payments. Explain, you're willing to pay now at X% AND that you don't have insurance. The person on the other end is usually a human and can accept that (somewhere in the billing chain).

If they offer to distribute payments, explain financially, that may put more burden on you. If you actually can't pay or are living pay-check-to-paycheck, explain it may bankrupt you. At that point, they get nothing, so negotiations can ensue.

Another thing to do is debate billing codes, as the error rate is relatively high. For reference, even a 1% error rate means out of 10 visits you're likely to get one, because you'll have multiple billing items every visit.

This is depressing.

It's good advice but... how broken is our society that this advice is needed and we can't just force companies that are extorting people over healthcare costs to charge reasonable prices.

What about this tactic: find out what percentage they get if they sell the account to a collector. Offer a bit more than that.

Funny story, our billing service was also collections. Meaning, the doctor / hospital earned X% of what ever we got, regardless of if you were in collections or not.

So, we had no incentive to really negotiate in that regard.

Arguably a significant percentage of healthcare companies have their billing setup in such a way. Or they handle it entirely in house.

I want to know what the legal basis for collecting from an ER patient is. At the point of needing ER services, most people are not able to form a binding contract so it cannot be that.

I do agree that hospitals should be paid for the services they perform. It's just that our society's free market notion of price-agreement is predicated on voluntary contracts.

> I talked about this with some of my physician friends, and they told me this is typical. In fact, the original bill doesn't represent what they expect to be paid

For instance, if the hospital is billing under a theory of reimbursement for services provided on your behalf, lying about their costs is textbook fraud.

Or are there explicit state laws that allow hospitals to collect from ER patients without a contract in place? If so these need to be reformed to have uniform charges no matter who the payer is. Like say towing.

If not statutory then the patient could be said to have been unjustly enriched. The remedy for the ER provider is the court-imposed equitable quasi-contract. The pluses for the patient include the limitation that the amount has to be reasonable (quantum meruit damages)

The wiki page is brief but ok https://en.wikipedia.org/wiki/Quasi-contract


So the real dynamic is that very few ever get to litigating the matter, because the path of least resistance is to simply speak the hospital's language and they will reduce it in-house to something more provably in-line with their expenses?

Still, it seems worthwhile to work towards penalizing hospitals for routinely going over the line, otherwise they will continue to monetize the difference between what is right and what they can get away with.

And on that front, I still have to ask how it's not straightforward fraud to lie about the expenses incurred? If we're roommates and I pick you up a gallon of milk at the store knowing you want some and will reimburse me, but I add it to our tab as $20 - am I not attempting to defraud you?

Trumped up costs do routinely happen across all sectors. It just seems on this topic that grassroots pushback is never discussed, yet could be quite appropriate. For example, a self-help form letter that demands an "out of network" hospital substantiate exactly why their expenses were double that of every other hospital.

> how it's not straightforward fraud to lie about the expenses incurred?

It is fraud. It's just not prosecuted, because it's a wealthy corporation doing it.

Are you telling me that the American healthcare works like an Arabic bazaar, where you start with a price that is 20x the real value and negotiate it down to a fraction of the initial offer?

Difference is, the buyer haggles after receiving the non-returnable service, so they cannot shop around, or use the threat of shopping around as a bargaining tactic. The buyer is entirely captive, while seller may freely decide how low to go (if at all), depending on factors opaque to the buyer.

... And frequently they won't give you a price even if you ask what it costs upfront.


If you don't have insurance you can negotiate your bill. The problem is that people don't understand that, that Americans hate negotiating, and that negotiating the price of something after you bought it (or even after you need it) stinks.

Get this though: if you have insurance and your insurance doesn't cover something, you often can't negotiate. I had a $10,000 procedure that insurance didn't cover (i.e., I hadn't met my high deductible yet), and I had no choice but to pay the insurance's agreed-upon rate (which I feel was higher than what I should have been paying out of pocket).

So it was kind of negotiated, but through insurance and their negotiated rates not an individual's out of pocket negotiated rates.

This was also a service where I wasn't informed that a second doctor was out of network, which also screwed me me (and there's literally nothing I can do about this after the fact).

You can always negotiate and threaten to not pay. They might send you to collections or even sue you for the debt, but often they'll agree to a smaller number to avoid the hassle.

really? I've been told by different hospital billing departments that they will put me on a payment plan, but will absolutely not negotiate beyond an insurance provider's agreed upon rate.

Of course, that stance is in their best interest and not mine... so maybe I wasn't being forward enough?

This all feels quite ridiculous.

It is all ridiculous.

It honestly depends on the individual hospital. They almost always have a contract with insurance that they can't accept less, but nobody's checking and it's common for them to do so. Some hospitals are reasonable and especially if they see if you have low income/assets, will settle with you. Others don't care at all and will not accept any less and just send you to collections or sue.

Well of course the hospital billing department is going to tell you that you have to pay the entire bill. What did you expect? Ask to speak to a manager, make a specific counter offer, and threaten to pay $0 if they don't accept. It only takes a few minutes and even if they refuse you won't be any worse off than before. (I agree this is a ridiculous system.)

I've said things like "really? there's nothing you can do about the cost?" but that's a really weak push for it... I just hate kind of being a dick about it (asking for a manager and making a counteroffer makes me feel pretty shitty, but I'll give it a shot).

I would think it depends if they think you have money (or future earning capacity). If I'm the hospital, and I think you have or will have money, then why not pursue you. On the other hand, if you're poor and having nothing to pursue, then I'll settle for less.

Sure, but the people in the billing department have never met me? So unless they're doing a credit check or doctors are taking notes on suspected financial situations... I doubt they're doing this.

Employment status, Medicaid status, and zip code you live in are all pretty good proxies. Someone who doesn’t offer employer provided insurance is probably not worth pursuing unless they have some other indicator of wealth.

People also don't know how far they can negotiate. For a lot of people these numbers are close to financial ruin so it's hard to negotiate with clear head. Add to that being sick. It's a perverse, heartless system.

I mean, the closer the number is to financial ruin, don't you think it's more likely that someone will negotiate? What you're saying, essentially, is: the higher the price of something, the less likely someone will negotiate.

Clearly, that is not the case.

And in regards to your last point, what has made the system so perverse is the insurance companies in the first place. If most people were actually responsible for paying all of their healthcare costs themselves, the prices would be pretty cheap.

For example, I live in Tanzania, and I can get medication that is over $500/month without insurance in the US, or like $75 with insurance, for around $1-$2. Also, I can get a tooth pulled for under $5.

No one has health insurance here, I don't think it even exists, and therefore, hospitals are forced to charge an amount that the people can pay for. The system actually works, and if for some reason you can't pay, you can volunteer at the hospital until your bill is paid off.

Consequentially, even though there aren't laws about accepting all patients (hospitals are allowed to turn away whoever they like), they don't, because they know they will be paid at the very least in labor.

Though, honestly, at this point in the US the system is so fucked up that I'm not sure it's even possible to create a free-market system anymore. It pains me to say this (as a staunch libertarian), but I think maybe it would be better at this point for the government to just foot the bill for everyone.

“I mean, the closer the number is to financial ruin, don't you think it's more likely that someone will negotiate? What you're saying, essentially, is: the higher the price of something, the less likely someone will negotiate.”

I have been close to ruin and you can reach a point where things are so overwhelming that you basically just give up. I am sure some people are natural fighters but a lot of people aren’t. In addition when you run out of money you can’t afford lawyers and other advice which makes things even worse. It’s a really bad negative spiral.

> I mean, the closer the number is to financial ruin, don't you think it's more likely that someone will negotiate?

No. Such panic-inducing tactics are not likely to make someone a better negotiator.

Learned helplessness is a real problem.

Please don't cross into incivility, even when the topic is sensitive and you feel someone else is wrong. It just makes this place worse.


Okay, edited, is that better? I think the incredulity of the OP was quite incivil, for what that's worth. Would be more effective to catch this stuff further up the chain.

> Clearly, that is not the case.

when it "clearly" is the case.

Yes, that's better. Thanks!


Please don't do this here.

This used to be true but is no longer so. Almost every hospital would negotiate with you if they could see that you had no money or were willing to pay a lump sum. You could end up paying 4-10x medicare rate.

However, starting about 5 years ago some hospital got the idea they could refuse to negotiate with everyone and it seems to have spread. Now there are a bunch of these unreasonable hospitals. You can open up all your finances and show that you have no money and that their bill is 100x medicare rate and they would rather get $0 and you declare bankruptcy. I guess they end up getting more revenue overall this way?

Of course they do! "Rely on the mercy of a for-profit (or faux not-for-profit) organization to whom you have already handed a blank check" is a terrible plan, nobody should be surprised that it doesn't work very well, and the people who propose it as anything other than a desperate hail-mary should be ashamed of themselves.

gowld, I'm looking at you.

That’s interesting. The friends I talked to did mention this, but it sounded more like you could knock the bill down a bit, perhaps in the 10-25% range (10% being a lot more likely). The er physician I spoke with seemed skeptical That you could negotiate it down anything like and hmo with massive negotiating power could, but that is just one conversation, and ER docs may actually not be the most knowledgeable people about this. A hospital admin or financial person would probably be a better source.

Why should the amount you need to pay for life-saving care depend on your social/intellectual wherewithal to negotiate? Is this a good outcome for society?

It shouldn't. It also shouldn't be hidden in "employer contributions" to insurance premiums. Large parts of the sector shouldn't be financed through massively inefficient wealth transfers and block grants to states.

We have too much third-party payer, especially mandated third-party payer, that distorts the face value of these services.

Sectors of health care that are largely cash-based, such as corrective eye surgery, many orthodontic treatments, most plastic surgery, are all quite cheap and have up front pricing that is easy to follow. Actual healthcare reform needs to rip out the old, broken systems and replace them with a simple plan for chronic healthcare needs, insist on transparency in pricing, and let the market take care of the rest.

Shareholder value doesn't care about society.

Except the vast majority (4,888 of 6,210) of hospitals have no shareholders because they are run as non-profits or by governments.


Non profit means profit for management and their friends. They aren’t do gooders.

Government isn't made up of do-gooders, either. Churches are full of hypocrites. Private companies want to make money.

We manage to solve all kinds of other problems with these same structures despite the fact that the people working in them have not achieved your level of sainthood.

I'd reckon the people downvoting you have never tried to negotiate a bill.

You wish a dissected aortic aneurysm in front of Zuckerberg General on the folks arguing for negotiation or a market-based solution. The pox aren't serious enough.

Just look at he ownership structure of a lot of non profit hospitals. It’s always the same well connected guys.

It's difficult and painful to negotiate anything better than than a payment plan if you don't have a lump sum to offer. Patients have very little leverage.

How does one actually go about negotiating the ER bill after you've received one?

Hospitals have a billing department. You go talk to them and say "I am unable to pay this amount." There is probably a number on your bill to call.

And then they look up your income on one of a dozen information gathering platforms and decide that you qualify for a 2% discount, because privacy doesn't matter and hospital price gouging isn't a problem. Enjoy!

First hit on Google for that exact question: https://www.forbes.com/sites/financialfinesse/2017/03/30/wha...

Actually it is a lot easier to negotiate the price after you’ve already gotten the service. They can’t take back the service if you don’t agree to their price.

It depends if the courts find you liable for the service regardless of having agreed upon a price beforehand or not.

With medical care, I would guess the court would side with the medical care provider, and negotiating beforehand would help you, whereas not negotiating beforehand would give a blank check to the seller (as the system is now).

Debt & collections exist.

Why aren't there services that negotiate people's medical bills, for a fee?

Because "negotiating" the blank check that you already signed does't work.

Yes, it works if they have actually stuck you with a bill that exceeds your net worth and expected income, but in that case you can't afford and/or don't need a negotiator -- you just default. It also works if you've stirred up a media frenzy, but you can't turn that into a business model for obvious reasons. The only place it does reliably work is in the imagination of those looking to downplay the severity of the current state of affairs.

They exist but many have actually gone out of business in the last few years, perhaps due to hospitals refusing negotiation. Most of mine were referrals from health insurance brokers. They're usually commission based so they only charge if you they save you money.

Like the parent comment said, there are. Insurance companies play that role. Hiring a negotiator without having to buy insurance would be valuable, though.

> As part of a powerful group, I have someone not just paying the bill but knocking it down for me. I may not like being part of a group plan, but on my own, I'm toast.

This sounds a lot like going to court with/without getting a lawyer.

that's why when the whole country is in the same union all prices go down

Yes, this is the fundamental argument in favor of a single-payer public health insurance. This is why the US spends so much more on healthcare per-capita, and as a percentage of GDP, than Canada, for example.

> In 2006, per-capita spending for health care in Canada was US$3,678; in the U.S., US$6,714. The U.S. spent 15.3% of GDP on healthcare in that year; Canada spent 10.0%.[6]


  Second, the bill would regulate the prices that the hospital could charge for its care, limiting the fees to 150 percent of the Medicare price or the average contracted rate in the area, whichever is greater.
Seems like this will start to solve the chicken and egg problem. Hospitals charge more because insurance will pay more. Insurance costs more because hospitals charge more.

"150%" smells like a made-up number. Unless providers have some freedom to raise Medicare prices (which they don't), this effectively means that Medicare sets prices for everything. I'd rather see laws that strengthen consumers control over their insurance options (improving the power of the demand side of the market), including price disclosures, than pushing the rope from the back end without any competitive market forces influencing prices.

Have you ever tried to be a conscious consumer for health care? How about for serious health care for a life-threatening of life-changing issue like cancer or childbirth? I never understood the desire to offload any of this cognitive load to the consumer, many of whom are going through the most difficult times of their lives.

The weird thing is that, even though a lot of policy is oriented toward making you a conscious consumer (high deductibles, coinsurance) in many cases you just can’t do it,at least not very well.

My wife got an allergy test at a local allergy clinic, but she had 20% coinsurance so we tried to figure out how much it would cost. Everyone there treated us like garbage. Even when we called the billing department in advance they told us there was no way to know in advance how much the basic allergy test would cost until she saw the doctor. So we went to the clinic (stupidly), and the nurses just acted like we were crazy. Finally one did tell us what the bill would be:$12k. I had researched these tests online and was floored; that’s way more expensive than it should be, and the doctor who gave her a referral had told us it would be a reasonable price. So we were in the awkward position of just leaving the appointment. The doctor then basically talked to us somberly like we were the poorest people on earth, and said “listen, most of the test is for allergens that don’t exist in northern California.” If I just give u the local ones it’ll be like $1800.” I started laughing. Later on I read an NPR story about a lady who had a$48k allergy test from there. Just a complete scam, much worse than a car dealer because at least there they will tell you a price and they will not sell you ten extra useless cars evenif you don’t explicitly say “don’t give me ten superfluous cars for no reason.” Anyway, we got the limited test, and at the end the doctor said “listen I’m not supposed to do this, but given the financial hardship I’ll make an exception. If I don’t put the results in the system you’ll only be charged for the visit.” And he just wrote the results on a yellow notepad paper and tore it out for us.

Tldr we were treated like annoying busybodies for asking the price at an in-network facility, and then treated like indigents when we balked at paying way more than anywhere else charges, for totally bs procedures.

This is a pretty good anecdote that supports why I don't go to doctors.

It has been in my experience that people who are usually for the same ideology as the parent comment are also the same people who have never had a steep medical bill thrown at them after a hospital/doctor visit. It is unfortunate that it usually takes this awful circumstance for people to see the other side but I can imagine it being hard for people to relate until it happens to them.

> Unless providers have some freedom to raise Medicare prices (which they don't)

I assume you mean by "provider" humans like doctors, nurses, aides etc.

Drug and device prices are essentially not regulated. Medicare/Medicaid pays a fixed percentage of the price set by the company -- but that price is indeed set by the company!

(I used to work in pharma and this dynamic was an important part of our pricing plans)

If you ever need a drug with an enormous copay (say, $2000/month) you can often contact the manufacturer and get most of that copay rebated. WTF? Well the manufacturer wants a high list price for the drug so that they get paid a lot by insurance companies and MC/MC. Paying your copay means you won't object to the prescription, the rest of which (which is much larger than the copay) is paid by third parties.

Of course it's arbitrary but that doesn't mean it's not reasonable. Sure - they might be close to breaking even or at a slight loss when taking medicare, and that probably gives them the wiggle room they need to be sustainable.

Put another way - the government gets a 33% discount compared to private insurers.

If the argument is that medicare prices are unreasonably low, that seems like a different issue.

Hospitals in CA have had to publish chargemasters for a decade already. This law would set the price at the larger of either the medicare cost, or the insurance negotiated cost

But there's no standard format for the charge master so some hospitals publish JSON, some PDFs, some random mixes of formats, and often there is no path from the home page to the published data -- you have to ask.

And this is for emergency rooms where typically you don't have a choice.

This is medical treatment; there are no competitive market forces to reduce prices.

There is also a perverse incentive here.

Per https://www.healthcare.gov/health-care-law-protections/rate-... you can verify that insurers are required to spend a fixed fraction (80-85% depending on the size of the group insured) on premiums. With their own costs, profits, etc taken out of the remaining. Which means that the more they pay, the more profit they can potentially make.

Therefore it is in the interests of insurance companies that hospitals be expensive but predictable. A hospital with high premiums that can be negotiated down after the fact at need is both. (Better yet is to have a pool of catchable fraud. You look as hard as you need to to get your numbers where you want them.)

This would fix itself with a sufficient number of insurance firms competing for business. Unfortunately, the majority of the desirable lives you would want to insure to balance out the sick are already in nice white collar employer healthcare plans, so it's not really profitable for multiple health insurance firms to compete.

The chicken and the egg have already been laid in this case.

Hospitals cannot charge less than they charge insurance otherwise it would be constituted as insurance fraud. This ends up meaning that insurance rates almost exclusively dictate the floor at which healthcare providers can charge their customers.

This will simply prevent hospitals from taking advantage of consumers that lack group negotiating powers.

Hospitals cannot charge less than they charge insurance otherwise it would be constituted as insurance fraud.

Not sure where you heard that, but it's simply not true. First and foremost, every insurer negotiates different rates with hospitals and other facilities. Second, where is the insurance fraud when a hospital charges an uninsured patient less than list prices, given that no insurer is involved in the transaction?

Hospitals cannot charge less than they charge insurance otherwise it would be constituted as insurance fraud.

This implies that all insurers pay the same rates, which I think is not true.

Finally, we see legislators doing something good for a change: "“These practices are outrageous,” says Chiu(Assembly member David Chiu) , who represents part of San Francisco in the Assembly. “No one who is going through the trauma of emergency room care should be subsequently victimized by outrageous hospital bills.”

So, they introduce a bill that will reduce patient billing abuse in CA.

Based on the article, it seems like Zuckerberg Hospital was especially egregious in abusing it's patients with billing.

I hope they can continue to crack down on Hospital overbiling.

> Finally, we see legislators doing something good for a change:

Come on, we don't need this invective. Sure, I can find a reason to be outraged every day by some legislative decision someplace but in the main, we still have roads, air traffic control, health and safety rules etc.

And that happened to people with private insurance (SF General was “out of network” for the two examples.) But upwards of $20 thousand for very simple things is outrageous,

This has to become a national effort to curb these exploitative and unfair billing practices. It’s simply outrageous.

San Francisco General Hospital is focused on serving the public, i.e. those without private health insurances. Per Wikipedia:

About 80 percent of its patient population either receives publicly funded health insurance (Medicare or Medi-Cal) or is uninsured. SFGH also cares for the homeless, who make up about 8 percent of its patients.

They effectively use the high rates for privately insured folks to subsidize their public mission. Of course this all speaks to a really broken health care system, but it's not like uninsured people would have been charged even more than $20k.

(Z)SFGH is also the only Level I trauma center in SF City/County and San Mateo County (415 and 650 area codes) (note: trauma patients in the southern part of SM county are taken to Stanford Hospital).

So, under their billing practices, if you suffer major trauma, say in a vehicle collision, and are taken to SFGH, you may win multiple lotteries: major injury, recovery time, major medical bills to pay, and the chance to pay some other people’s medical bills as well, depending on the hospital policy, and whether you have an HMO or PPO (details are complicated.)

The thing that most US Americans stumble over here is their general expectation that goods and services have a price, and that bargaining for a better price is not an option.

We do not expect to bargain over groceries in a supermarket, or gasoline when fueling, or most other goods. In a professional setting, like a medical office, trying to negotiate a price seem inappropriate. But behind the scenes, a vast network of third parties are negotiating on behalf of other patients, and the uninformed or naive consumer not only pays “retail” but is asked to pay a wildly inflated price that all the third parties know is merely an initial offer.

  (415 and 650 area codes) 
Much of 650's population is in Santa Clara County (Mtn. View, Palo Alto, parts of Sunnyvale)

This the Robbin Hood approach to a problem. How on Earth does a public hospital think it’s ethical to exploit people like this and think it’s okay to do because I’m helping someone else?

It's price discrimination and it's how most businesses operate because that's the only viable option in many industries.

It’s only a viability issue because everyone does it.

Regulation can help here.

What other options does the public hospital have?

Ummm taxes.

But that is not under control of the hospital. The lawmakers need to enact it.

That argument would hold water if they didn't also receive nearly a billion a year in funding from the City of San Francisco.

Negotiating the cost of life saving treatment, checking in-network vs out-network, vs in-network with contract, shopping for different insurance providers.

The amount of mental energy that Americans spend on health care just seems absolutely nuts to me. How much productivity does your country lose because people have to spend time even thinking about things like this?

It's beyond ridiculous that the richest country in human history cannot even ensure health treatment to its citizens, when countries with 1/20 of its GDP/capita manage that. Goes to show that "economic growth" by itself means nothing, if it does not even translate into something so basic as health care.

which country has universal healthcare with 1/20th of US GDP per capita? genuinely curious

I think he's talking about Cuba.

Most likely. Cuba's kind of an outlier in having an extraordinarily good medical system relative to its GDP, but it's proof at least that, given political will, it's possible.


Cuba is indeed a good example, but there are others. Ghana for example (actually 1/30th of the GDP/capita).

If you are in CA and have an HMO plan you do not have to worry about in network or out of network, or with a contract, or spend any time negotiating the bill for emergency services.

We've regulated ourselves into the most complicated health industries in the world.

Either deregulate, or socialize the ridiculous costs.

Some years back, the California legislature passed a bill which limited what hospitals could charge uninsured patients to the Medicare reimbursement rates. Schwarzenegger vetoed it.

CA has been under single-party control since then. What's the barrier since then?

I kinda feel bad for Mark Zuckerberg. He donated a massive amount of money to the city-run hospital in a bid to improve his image (like Mark Benioff did with the state-run UCSF Children's Hospital), and it turns out they are even more rapacious than him and now his name is being dragged further in the mud thanks to them.

This incident does illustrate how corrupt health care is in the US, and public institutions are just bad as private ones.

Well, or he could have done some research before donating that money.

California protections against balance/surprise medical billing are not enforceable when an employee is covered by a "self-insured" or "self-funded" employer plan. California doesn't regulate that plan, and also cannot intervene in the billing between the provider, patient and insurance. Most medium to large employers are using such plans which means that employees are not protected from such billing.


"Does the New Law Apply to Everyone? The new law applies to people with health insurance policies or plans regulated by the California Department of Insurance or the California Department Managed Health Care that were issued, amended, or renewed on or after July 1, 2017. It does not apply to Medi-Cal plans, Medicare plans or “self-insured plans.”"

Preventing attempts at collections (like this law does), insurance reform, "medicare for all", etc, etc. are nice but they don't address the root problem. Costs are out of control. Until we find a way to control costs we will still pay way too much. All that changes until then is who pays what amounts and the point at which payment is made. The hospitals are just going to shuffle around who pays what in order to make up for the income they're not getting from surprise bills unless there's something (actual competition, a government payer who won't put up with that crap, etc,) to stop them.

Sure this is a step in a good direction but there's only so many band-aids you can apply to a gunshot wound. While unscrupulous practices like this bill takes aim at should be weeded out it strikes me as hopeless in light of the bigger picture.

The problem is two-sided. Yes the costs paid by the hospital, and the cost of the techniques and tools used by the hospital are all too high, because the system does not properly incentivize finding lower cost solutions that may be equally effective and safe.

In this case the problem is exacerbated by the way that privately insured patients are being exploited to subsidize publicly insured patients;

“A hospital spokesperson initially told Vox that the hospital’s focus is on serving those with public health coverage, even if that means offsetting those costs with high bills for the privately insured.”

It should be illegal to charge two different people different prices for the same procedure at the same hospital. At a more granular level, it should be illegal to price discriminate on anything that can be itemized.

The middle and upper class patients are exploited to pay for publically insured patients who get service below cost which the hospital can’t legally turn away.

> It should be illegal to charge two different people different prices for the same procedure at the same hospital

I think you're close to a solution with minimal regulatory intervention (Which so far has only made things even more expensive: ACA for example).

I'm curious how this would be reconciled with insurer networks though. A cost savings to insurers IS to have networks and discounts.

Two comments: 1. The ACA has by all accounts kept the growth of healthcare costs in check. Yes they have gone up, but at not nearly the rate they were going up before it, let alone the increased rate that most expected. If you start getting into the details this makes a lot of sense, but those details often get lost in the conversation about mandatory coverage (and the subsidies to make that possible on the low end).

2. This sort of cost savings to the insurers is more moving the costs to other people, thus negating most of the cost savings incentives.

>Costs are out of control. Until we find a way to control costs we will still pay way too much.

But aren't the provider side actors (hospitals, insurance networks, etc) the best placed to figure out how to control costs? It seems like a significant reason therefore for high costs may be because they simply do not feel any significant pressure to reduce them, in part precisely because of abusive behavior like this. If the spigots of inflowing coerced money are tightened, wouldn't that itself be motivation to try to find savings? It is in other industries at least. Same thing with more information and transparency, if providers are required by law to have all the costs laid out upfront and that is all they are ever allowed to collect that itself seems like a reasonable first step towards at the least motivating them to get their own internal systems in order.

Well, part of ACA, I believe was to limit what private insurers can make to 15-20% over their cost. While this had good intentions, this was not fully thought through because this incentivized insurers to cover more treatment and more expensive treatments because that’s how they could grow their profits which were fixed percentage wise.

>this was not fully thought through

That's a charitable way of putting it. It turned the insurers into money movers skimming their profit of the top. It somewhat incentivized them to let costs skyrocket. The more money that changes hands through them the better. A fixed % of a big number is more than a fixed % of a small number. The only thing that stops insurers for covering anything at any price and then just passing the cost and letting premiums really go crazy is that there's still some traces of competition left in the market so people (corporate persons or otherwise) will jump ship to other insurers if premiums get too high.

You can look at the profit limits as incentivizing them to cover more expensive care (which it does do) but it comes at the expense of removing any reason for insurers to seriously care about cost so long as they're somewhat competitive with whoever their competition is. That's a very big tradeoff.

Is there any evidence of that happening? Is it a bad thing that an insurance company is incentivized to cover an expensive procedure instead of denying it?

This isn’t really the same. Getting rid of massive surprise bills is valuable even if you don’t reduce costs at all. Conversely, it’s possible to cut costs while still having the possibility of financially ruinous surprise bills.

It kinda does.

    Second, the bill would regulate the prices that the hospital could charge for its care, limiting the fees to 150 percent of the Medicare price or the average contracted rate in the area, whichever is greater.

Yes the systemic cost is the real problem. As our population becomes older, more obese, and more sedentary the costs will keep increasing.

Ultimately I think we're going to need some combination of legislated cost controls and care rationing based on QALYs. Otherwise healthcare will collapse the entire economy. This will all be hugely unpopular.

Do you have any cost control ideas?

Set reasonable low Price ceilings on procedures/ per night stays, pills, etc, adjusted on location and make the hospital liable for any costs above those. I don't see why a night in the hospital should cost 8000$ per night or why a pill should cost 100$, or a little ambulance ride should be 2800$ etc.

What about just eliminating medical bills entirely?

These laws don't apply to employees covered by employer self-funded plans, which are predominant. California can't enforce them in most cases.

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