By David Lazrus January 18, 2022
February 5, 2022
Source: LA Times
Photo Source: Unsplash,
The Consumer Financial Protection Bureau warned debt collectors and credit agencies last week that they need to step more carefully when it comes to trashing people’s credit scores because of stratospheric medical bills.
The agency’s notice underlines that the federal No Surprises Act took effect this month, protecting people from many unexpected healthcare charges.
“Too many Americans have been shocked by surprise medical bills and forced to pay up through credit report coercion,” said CFPB Director Rohit Chopra.
What he means by “credit report coercion” is healthcare providers threatening to let debt collectors hold patients’ credit scores hostage unless they pay even the most wildly inflated medical bill. “Our action today should serve as a reminder not to collect on or furnish credit reporting information about invalid medical debt,” Chopra said.
This is an important safeguard. A 2019 study found that medical bills were a primary factor in about two-thirds of U.S. personal bankruptcy filings. More than half a million U.S. families go bankrupt annually because they can’t afford healthcare.
Li went to a medical facility and the first bill was for $3,197.02. It included a $405 charge for the ER doctor, a $193 charge for “emergency department,” a second $663 charge for the ER doctor (she saw only one), a $100.02 charge for “pharmacy” (probably the shot and stitches), plus three additional (and mysterious) charges for “emergency department” that totaled $1,836.
Li was billed $689 more for returning a few days later to have the two stitches removed. These charges were reminiscent of my recent column about how an electronic health record system at Scripps Memorial Hospital in Encinitas automatically imposes price hikes of as much as 675% to routine medical charges.
Documents leaked to me by a former nurse at the hospital showed stitches that cost just $19.30 were automatically marked up to $149.58.
So she reached out to me, and I contacted Norwalk Hospital’s parent company, Nuvance Health. Amy Forni, a Nuvance spokesperson, declined to discuss details of Li’s bill. She emphasized, however, that Norwalk Hospital, like nearly all medical facilities, charges patients not just for treatment but also for the cost of maintaining healthcare resources and treating anyone who seeks emergency care. “In most cases, we can estimate the cost of care for planned medical procedures and treatments,” Forni said. “However, not for emergency services ... because staff need to triage patients before they know what care to provide and what it might cost.”
She said Norwalk, like most hospitals, will work with patients facing financial difficulties. If such contingencies were sufficient, though, there’d be no need for debt collectors or other strong-arm tactics. The fact that medical bills drive so many people into bankruptcy shows that whatever financial assistance hospitals offer, it isn’t doing the trick.
According to the CFPB, 17% of U.S. adults “had major, unexpected medical expenses” in 2020, with the median bill running as much as $2,000. Nearly a quarter of Americans “went without medical care due to an inability to pay,” the agency said.
The No Surprises Act is intended to make the healthcare system less unfriendly. Passed as part of a 2020 spending bill, the law makes it illegal for medical providers to slap patients with crazy charges for out-of-network care, particularly 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 they should contact in the event of problems. As a sop to medical providers, the law includes an arbitration provision — that is, you can’t sue over surprise bills but have to agree instead to arbitrate any disputes.
Researchers at USC and the Brookings Institution said an arbitration clause “was a key demand of provider groups, who likely hope that they will be able to extract higher prices via 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 No Surprises Act “is the most critical consumer protection law since the Affordable Care Act.”
“We are taking patients out of the middle of being between insurers and providers, and ensuring they aren’t met with eye-popping, bankruptcy-inducing medical bills,” he said. “This is the right thing to do.”
It is. It’s also yet another dysfunctional aspect of the profit-focused U.S. healthcare system that could be eliminated overnight with introduction of a “Medicare for all” approach that would make bills transparent, consistent and reasonable.
Li told me Norwalk Hospital has gotten in touch with her as a result of my outreach but hasn’t yet shown any flexibility with her outstanding bills.
What laws should be accepted into law to protect patients? Why? How could this impact your health?
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