Managing Managed Care

Our inequitable, inefficient, oftentimes uncaring health care "system," revealed. -- Jeffrey G. Kaplan, M.D., M.S.

Med. Newsletter / eBook

Be informed on reform; Newsletter and, if requested, a relevant eBook: "Mgd Care 101 in 2016" (No obligation)

Subscribe to Managing Managed Care newsletter feed

SSL Certificate

Billing Beyond Customary

This article is posted in: 

Your health plan or doctor's office seems to see your heart attack, broken leg or laceration differently than you do.  They may want you to pay for that which one would ordinarily believe is covered.  In general, that is what consumer advocate, Ralph Nader calls "The Crime of Overbilling Healthcare." [Pub online August 31, 2014]

As a comment: "Clearly, this 'balance [extra] billing' should be abolished, which will ensure reasonable payment for appropriate care, even for that provided by out-of-network physicians. Today in my pediatrics office, I encountered a health plan that would rather pay $400 for an ER visit for a shot of Decadron for croup, rather than me. Last week, an even more dramatic disparity of treatment for a laceration I repaired."

William K. Mallon, MD (Pres., Cal. Chapter of the American College of Emergency Physicians).

What a Hospital Bills Is Not Necessarily Reasonable or Customary

I've long suggested that when uninsured patients get hit with outrageous hospital bills, they should refuse to pay, but demand evidence that the charges were reasonable and customary.

A decision, referenced below* provides support for that position.

 *"[A] medical care provider's billed price for particular services is not necessarily representative of either the cost of providing those services or their market value." Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, 564. [ link failed 4/20/17]

The "reasonable value" of the services has been described as the "going rate" for the services (Maglica v. Maglica (1998) 66 Cal.App.4th 442, 446) or the "reasonable market value at the current market prices" (Punton v. Sapp Bros. Construction Co. (1956) 143 Cal.App.2d 696, 701). Reasonable market value, or fair market value, is the price that "'a willing buyer would pay to a willing seller, neither being under compulsion to buy or sell, and both having full knowledge of all pertinent facts.'" (Alameda County Flood Control & Water Conservation Dist. v. Department of Water Resources (2013) 213 Cal.App.4th 1163, 1174-1175, fn. 9.) 

In this case, less than 5% of the payors paid Hospital the full billed charges. 


Children's Hospital Central California v. Blue Cross of California (2014) , Cal.App.4th

"As can be seen ...., the facts and circumstances of the particular case dictate what evidence is relevant to show the reasonable market value of the services at issue, i.e., the price that would be agreed upon by a willing buyer and a willing seller negotiating at arm's length. Specific criteria might or might not be appropriate for a given set of facts."

CHILDREN'S HOSPITAL CENTRAL CALIFORNIA, Plaintiff and Respondent, v. BLUE CROSS OF CAL. et al., Defendants and Appellants  (Superior Court of Madera County, No. MCV048512, Dale J. Blea, Judge.)  (Opinion by Levy, Acting P.J., with Kane, J., and Franson, J., concurring. [No. F065603. Fifth Dist. June 10, 2014.]  

Harvey S. Frey MD PhD JD
"To get anywhere we have to go outside the usual channels,
because those channels were set up for us to lose."
-Jane Slaughter