The Norman Transcript

June 24, 2013

Promise of price cut on hospital bills is in limbo

By Ricardo Alonso-Zaldivar
The Associated Press

WASHINGTON — Huge list prices charged by hospitals are drawing increased attention, but a federal law meant to limit what the most financially vulnerable patients can be billed doesn’t seem to be making much difference.

A provision in President Barack Obama’s health care overhaul says most hospitals must charge uninsured patients no more than what people with health insurance are billed.

The goal is to protect patients from medical bankruptcy, a problem that will not go away next year when Obama’s law expands coverage for millions.

Because the Affordable Care Act doesn’t cover everyone, many people will remain uninsured. Also, some who could sign up are expected to procrastinate even though the law requires virtually everyone to have health insurance.

Consumer groups that lobbied for a “fair pricing” provision are disappointed. A university researcher who’s studied the issue says the government doesn’t seem to be doing much enforcement, and at least one state, Colorado, enacted a stricter rule since the federal statute passed.

Critics say the law has several problems:

—It applies only to nonprofit institutions, which means about 40 percent of all community hospitals are exempted. By comparison, the Colorado law also covers for-profit hospitals.

—It lacks a clear formula for hospitals to determine which uninsured patients qualify for financial aid, and how deep a discount is reasonable. A California law spells out such a formula for that state’s hospitals.

—More than three years after Obama signed his law, the Internal Revenue Service has not issued final rules explaining how hospitals should comply with the federal billing limits. Delay doesn’t signal a high priority.

“We still hear the same stories about patients who are being sent to (debt) collection,” said Jessica Curtis, director of the hospital accountability project at Community Catalyst, a Boston-based advocacy group that led the push for billing limitations. “It’s the same behavior that we were seeing before the passage of the Affordable Care Act.”

The Obama administration responds that fair pricing is the law of the land, and that hospitals are expected to comply even if the IRS has not finalized the rules. The agency has begun compliance reviews, a spokeswoman said.

The health law “helps to protect patients from hidden and high prices and unreasonable collection actions,” said Treasury Department spokeswoman Sabrina Siddiqui.

The American Hospital Association says it urges members to limit charges to the uninsured in line with the federal law. But neither the administration nor the industry has statistics on how many hospitals are doing so.

Health and Human Services Secretary Kathleen Sebelius recently took on hospital pricing policies when she released federal data that document wide disparities in what different hospitals charge for the same procedures.

Most patients never face those list prices because private insurers negotiate lower rates and government programs such as Medicare get to set what they will pay. The burden of paying list price falls on the uninsured and people with skimpy policies.