Curing the hospital-bill blues

It can be a Looney Tunes moment when patients inspect their hospital bill after even the briefest stay: The body stiffens and eyeballs pop out of the sockets, followed by a horrific cartoon screech: “Ahhhhhhhhh!”

In this state of shock, many Californians overlook an important fact. On each bill, hospitals are now required to disclose that fee discounts are available for qualified low-income or uninsured patients.

Yet trying to get these discounts isn’t always easy.

Last week, leading state health-care-advocacy groups launched a consumer Web site to guide patients having trouble paying hospital bills. While California hospitals have largely been able to cut costs for cash-strapped citizens, getting the discounts isn’t automatic.

The Web site—HospitalBillHelp.org—provides advice for patients facing hefty hospital bills. It includes applying for a fee discount, handling insurance companies who won’t pay up and dealing with collections departments. It also helps Californians select affordable health care and highlights important health-policy issues. Much of the site is offered in Spanish.

Since the country’s first Hospital Fair Pricing Act took effect more than two years ago—Assembly Bill 774––California hospitals are required to offer fee discounts and are also capped on what they charge patients who typically face their highest fees: the uninsured.

“Those patients who have the least are charged the most,” said Anthony Wright, executive director of Health Access, which sponsored the Web site with partners Consumers Union, Western Center on Law and Poverty, and the Association of Community Organizations for Reform Now.

Wright agrees that many hospitals have complied with California law—“Some are doing it well, some are not”—but two nagging problems continue. First, rural hospitals, or those not affiliated with large chains, frequently don’t mention the mandated discounts. Second, obtaining the discounts can be difficult. The Web site was created “not to bash hospitals,” but to offer patients their options under the law.

The story of a Sacramento woman who broke her arm and received treatment at UC Davis in February offers a case in point. The woman, who requested anonymity, says she was employed part time and uninsured and couldn’t afford to pay the $10,000 bill. She got little help from the billing department. “They pretended they were totally unaware of that law,” she said.

After three months of back-and-forth discussions—including phone calls to Health Access—the bill was finally reduced to $1,700. “I had to fight like hell,” she said.

Jan Emerson, spokeswoman for the California Hospital Association, says fees charged to the uninsured are a federally mandated “list price” that are rarely, if ever, the final bill. “What an uninsured patient actually pays is far less than the billed amount,” she said.

For patients, medical bills are causing rising debt loads and even medical bankruptcy. Consumers who buy catastrophic health-insurance plans and limited “junk” insurance often find that their plans have strict limitations, which often saddle them with enormous debt.

Dietmar Grellman agrees that the health insurance that consumers buy is often inadequate. Grellman, CHA’s senior vice president of managed care and professional services, said when Californians purchase inadequate health-care policies, hospitals are expected to pick up the tab.

“There are millions of patients who go through hospitals and qualify for charity care and get the help they need,” he says. “Many [hospitals] go above and beyond the law.” Yet Grellman admits that some hospitals are doing better than others at complying with the act.

Grellman said financial problems can result when people select their insurance plans poorly. “Some consumers don’t understand what they’re buying,” he added. “They’re talked into buying these completely inadequate policies and overpaying [for them].”

For example, Laura Burwell, a small-business woman from Chico, thought she had $50,000 in hospital coverage. After being bitten by a rattlesnake, she discovered her insurance plan paid only $3,000 a day, which barely made a dent in her $73,000 bill.

It took three months of tenacious work to get the hospital to comply with California law, says Burwell. Her final bill was one-tenth the original charge—$7,300.

Laurie Sobel, senior attorney for Consumers Union, said the concept of underinsurance is a relatively new one, and that junk insurance is typically the culprit. These low-cost plans promise coverage yet deliver very little, often with high deductibles. Low-cost insurance plans often target Latinos and other ethnic communities.

CHA’s Emerson said that while hospitals are doing their best to comply, the act provides certain exceptions for smaller, rural hospitals that serve impoverished communities. Otherwise, these hospitals would be providing free care to a most patients. “Some of [these hospitals] are just trying to keep their doors open,” she said.