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LEGAL EASE

CHANGES ARE A’COMIN TO

TRANSPARENCY IN MEDICAL BILLING

By George F. “Rick” Evans, Jr., Evans, Rowe & Holbrook

Ever wonder what the internist across
the hallway charges for a routine office
EKG compared to what you charge for
the same service? Or what he/she may
charge for routine lab work? Or what-
ever? Read on.
June 9, 2015 started off as any other
day for Crystal Roberts. Unfortunately, it
went downhill rapidly when she was in-
volved in a serious car accident resulting
in her transport to North Cypress Med-
ical Center in northwest Houston. She
was only in the Emergency Department
for three hours before being discharged.
During that time, she was provided a se-
ries of X-rays, scans and other services.
For those services, the hospital billed her
$11,037.35. The hospital’s bill was for their full “chargemaster” to costs or the amount the hospital actually expects to receive in ex-
prices. Noteworthy is the fact Crystal was uninsured. change for its services. The hospital argued that uninsured patients
Crystal filed a lawsuit against the car at fault which caused the ac- like Crystal shouldn’t be allowed to benefit from contract rates ne-
cident. A nominal settlement was offered of slightly more than gotiated by insurers for their insured patients. But the Court held
$17,000 of which $9,404 was attributed to her medical expenses. that the issue wasn’t whether Crystal could take advantage of rates
The hospital exercised its right to file a lien and sought to recover negotiated by insurers with whom she had no relationship, but
the full amount of their $11,037 bill. Although Crystal’s attorney whether the rates charged to her by the hospital were reasonable.
tried to negotiate a reduction in the hospital’s claim, no agreement After all, the hospital is only allowed to recover for reasonable
could be reached. charges; not whatever charge they happen to claim.
Texas law allows a hospital to recover only “reasonable” charges. So, how did Crystal attempt to find out what are reasonable
Makes sense, right? Who would argue a healthcare provider should charges? Well, her attorney demanded the hospital provide the rates
be allowed recovery for unreasonable charges. The question then the hospital charged for patients insured by both private and gov-
becomes what is a reasonable charge? Crystal questioned where the ernment sources. As everybody knows, this information is not pub-
full “chargemaster” charges really were reasonable because she was lic and is a closely guarded secret. Predictably, the hospital objected
suspicious the hospital charged lesser rates to insured patients for and refused to produce that data. The dispute went up the ladder
the identical services. all the way to the Texas Supreme Court.
The Texas Supreme Court candidly recognized that, in reality, the The Court ruled that a hospital’s reimbursement from private and
healthcare system actually has a two-tiered system of charges. government insurers represent the vast majority of payments for
There’s a price list for uninsured patients and a separate and differ- their services. As such, the Court recognized that the payments the
ent price list of patients with private or government-based insur- hospital accepts in full satisfaction of its bill are obviously some ev-
ance. Big surprise, right? The Court went on to recognize the point idence of what actually is a reasonable charge. The Court recognized
that “chargemaster” or “full” prices have lost any direct connection that, while these negotiated reimbursement rates may not be dis-

28 San Antonio Medicine • June 2018