Most people using hospital services must sign a form indicating that they will pay whatever their health insurance doesn’t. Federal transparency rules can help defend us against the consequence of that signature.
Federal price transparency rules require hospitals to post all negotiated rates, including cash prices for the uninsured, every single commercial insurance plan that they’ve contracted with, and even rates for government programs such as Medicare, Medicaid, Tricare and the Veterans Administration.
Those rules require hospitals to display:
- Pricing in a prominent place on the hospital website—if it’s hard to find, the hospital is out of compliance.
- A machine-readable file (usually an .xls or .crv file) with this information. Interactive tools that only show you your plan’s price aren’t good enough.
- Negotiated charges with EVERY insurance plan or program—if the hospital is “in-network” but you don’t see your plan listed in the columns of the posted price chart, as well as every single service they provide in the rows, the hospital is out of compliance.
Ignoring these rules is a bullying tactic to make you think you’re contractually bound to pay whatever the hospital charges. Unless the hospital makes its pricing accessible, the form you signed is what courts would find an “open price” contract, meaning a seller (hospital) may only expect the buyer (you, the patient) to pay if a court would find the price to be a fair market rate.
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Most hospitals are not complying with federal transparency rules. If yours is not complying, you can make the case that you should not pay a dollar more than fair market price. Here’s how:
Step 1: Next time you go to the hospital, instead of signing your name on that form, write “I did not read this.” The clerk taking the forms probably won’t notice. It won’t disrupt an electronic registration process. When you’re billed, ask to see the form with your signature.
Step 2: If you did not sign the form, skip to Step 3. If you did, check the hospital website to see if the pricing information is posted and is in compliance with federal price transparency requirements. If it is, steps 3-6 below will help. If it isn’t, you can argue you were charged unfair market pricing and you’re only bound by an open price contract. Be prepared to argue for lower charges.
Step 3: Determine fair market rates. If you have health insurance, hospitals charge an average markup of 150% above their “cost,” which is benchmarked to the Medicare rate (Medicare=100%). Without insurance, the average markup is 317%. You can multiply your billed charges by a “fair market multiplier” and get a price that allows a “mere” 50% markup:
- If you have insurance, multiply your billed charges by 0.60.
- If you don’t have insurance, multiply your billed charges by 0.24.
Step 4: Pay your fair market rate. If you have insurance, check the Explanation of Benefits from your insurance plan—it’s possible that the insurance company already paid more than the fair market rate is (in which case, you owe nothing). If not, pay the difference between the insurance payment and the fair-market rate. Use the instructions on your bill. Keep a screenshot of your online payment confirmation or take a photo of your check or payment stub before you mail it. Pay this amount on time!
Step 5: Send a letter like this one to the hospital’s registered agent demanding your balance be zeroed out. Explain you are in an open price contract because of the hospital’s non-compliance. Explain how you arrived at the fair price. Provide a screenshot or photo proving you paid that fair price (or a screenshot of your Explanation of Benefits showing that your insurance company already paid the fair price), and demand that your balance be zeroed out. You can find the agent by searching your state’s Secretary of State site.
Step 6: Check your patient portal to ensure the hospital zeroes out your balance. Be prepared to dispute bills if the hospital continues to send notices. Call the number on the bill or the patient billing office number from the hospital’s website promptly and have it recorded in your file that 1) you are disputing the bill, 2) you called to demand a response to your letter, and 3) that you are not obligated to pay anything beyond what you already paid. Insist the hospital commit not to sending your account to collections while the dispute is being resolved and have this noted in your file.
Just don’t give in and pay an unfair bill!
Executive Director of the Alliance of Health Care Sharing Ministries, Katy Talento is a veteran policy advisor, health care reformer, epidemiologist and thought leader. She was the top health advisor at the White House Domestic Policy Council and an oversight investigator and legislative director on Capitol Hill, spearheading transformative policies to protect religious liberty in health care, and end secret health care prices. Katy Talento is the CEO of AllBetter Health.
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