By Cynthia A. Fisher
December 16, 2021 at 12:10 a.m.
Source: Boston Herald
Photo Source: Unsplash,
Last week, the hospital industry sued the Biden administration to block its surprise billing rule from taking effect on Jan. 1. The surprise billing order is just one of several recent pro-patient rules fiercely opposed by the hospital industry and increasingly private-equity-owned doctors practices.
The rule clarifies a law passed last December banning surprise billing, which occurs when in-network patients unknowingly receive care from out-of-network doctors then get stuck with enormous bills. For instance, patients often get hit with surprise bills from their radiologists or anesthesiologists, who may not be in their insurance networks, in addition to their standard bills for care. The Kaiser Family Foundation estimates that about 17% of hospital patients receive surprise bills.
To maximize profits, hospitals and private-equity-owned physician practices such as Blackstone-owned TeamHealth often work in cahoots to overcharge out-of-network consumers far higher than any insurance negotiated rate. According to NBC News, TeamHealth and Envision Healthcare, owned by another private-equity giant, provide staffing for approximately one-third of the nation’s emergency rooms. As a result of their pricing practices, patients are routinely left with enormous balances, medical debt and subject to ruinous lawsuits.
Unfortunately, the surprise billing rule only offers patients a degree of protection from the predatory American health care billing system, whose hidden prices mean that almost every bill is still a surprise. Health care consumers, including patients, unions and employers, are regularly blinded to prices then blindsided by enormous bills that arrive in the mail weeks and months later.
This price opacity enables hospitals to extract unreasonable profits by allowing them to price gouge and erroneously or fraudulently bill without consequences. According to research published in Axios, this pricing power lets hospitals upcharge an average of seven times their cost of care. The Los Angeles Times recently reported on leaked hospital billing practices showing automatic markups of 675%.
Many hospital systems earned record profits in 2020 despite claims the COVID-19 pandemic would have a negative financial impact. Adding insult: Hospitals lobbied for and received significant corporate welfare last year from taxpayers via COVID-19-related relief legislation that bolstered their profits.
So it smacks of self-serving when the private-equity-backed physician groups and the hospital industry oppose commonsense reforms like this surprise billing rule and price transparency.
Last year, the hospital industry unsuccessfully sued in district and appeals courts to block a hospital price transparency rule that took effect at the beginning of this year. The law requires all hospitals to publish their actual prices, including discounted cash and contracted rates. Yet it has been marred by widespread hospital noncompliance. According to research published by PatientRightsAdvocate.org, only 5.6% of hospitals nationwide are fully following it.
The Biden administration recently finalized a rule to address this mass noncompliance. Starting Jan. 1, fines on violating hospitals significantly increase to more than $2 million a year. The order also requires hospitals to standardize their data disclosures so tech innovators can aggregate prices in consumer-friendly web applications similar to Kayak or Expedia. Like the underlying price transparency rule, the hospital industry has fought this order that strengthens it.
Despite this manufactured industry opposition, systemwide price transparency can fix the American health care system and dramatically reduce out-of-control costs. Upfront prices prevent outrageous hospital greed by empowering consumers with the information to avoid price-gouging providers and instead choose quality, less expensive alternatives. Armed with actual prices, consumers can unleash a competitive health care market through their choices and truly eliminate surprise bills.
Ignore the industry opposition to these pro-patients rules. It is merely an attempt to keep the gravy train rolling.
Should health care cost be transparent? Should they be approved by you? How much do you spend on health care insurance?
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