Assemblyman David Chiu tries to sew up loopholes in ER billing this week — but hospital CEOs have lawmakers on speed dial.
Late last month, we introduced you to Conan Mattisson, a 40-year-old Mission Street resident who inadvertently plunged a knife into his dominant right hand deep enough that he could peer in and observe his tendons moving around.
This is neither a healthy nor productive way to spend a Thursday evening. He headed to Zuckerberg San Francisco General Hospital, received a single stitch in a five-minute procedure, and was sent home. Then the bill arrived: $3,321.
Mattisson is an unemployed former bicycle messenger. He has experienced bouts of homelessness in recent years and has, in the not-too-distant past, been on food stamps. He is also uninsured. Separate and apart from the surreal lunacy of a single stitch costing as much as a new one-bedroom apartment (which is also surreal lunacy, but one thing at a time), this is simply not a cost he can incur.
The jarring nature of Mattisson’s story garnered a fair bit of attention — though it’s not clear if anyone at ZSFGH with a capacity to help has done so.
One person who might be able to help, however, is Mattisson’s assemblyman, David Chiu. And Mattisson’s plight was of particular interest to him.
Following articles from Sarah Kliff, then at Vox, and a series from the Chronicle’s Heather Knight, it was revealed that ZSFGH was, to a particularly onerous degree, engaging in “balance billing” — sticking patients for the portion of their debt that insurance providers didn’t deign to cover. And, because of the way ZSFGH is structured, these could be life-altering sums: Since the hospital is out-of-network for private insurers, even covered patients requiring emergency care were finding themselves stuck with five- and six-digit bills dwarfing Mattisson’s.
On the heels of media scrutiny and political pressure, ZSFGH in February publicly disavowed this practice. Chiu has introduced a bill, AB1611, that would require every hospital in the state to follow suit and stop bankrupting patients.
To be clear, Chiu’s bill deals with insured patients, not uninsured ones like Mattisson. But the former bike messenger’s ordeal is still germane. “ZSFGH originally said it needed to surprise privately insured patients with huge bills to make up for treating the uninsured and publicly insured patients,” Chiu wrote in a tweet. But then it charges an uninsured patient $3,300 for one stitch? ”
Hospital billing, it turns out, is kind of like riding on the 14-Mission: You’d do well to keep a hand on your wallet at all times.
ZSFGH originally said it needed to surprise privately insured patients with huge bills to make up for treating the uninsured and publicly insured patients. But then it charges an uninsured patient $3300 for one stitch? ? https://t.co/mUHKVGXfv1
— David Chiu (@DavidChiu) June 26, 2019
One of the benefits of Game of Thrones going off the air — especially for someone like your humble narrator, who did not watch the show and writes professionally about politically fraught and challenging situations — is that people no longer feel the need to make GOT references to describe politically fraught and challenging situations.
You don’t need to evoke dragons or magic or zombies or hearts, moons, stars, and clovers to describe treachery or cunning or plotting or inaction or indifference or cravenness. That’s just how politics is; that’s just how the political process works.
And yet, the combination of hospital billing and the seamy, transactional world of Sacramento politics does feel like some manner of dark sorcery. And, in this realm, ZSFGH is one of the good actors, or, at least, one of the better actors.
It wasn’t out of the goodness of anyone’s heart, but at least ZSFGH has ostensibly disavowed balance billing. Other hospital chains are mounting a full-court press in defense of the status-quo: Chiu says his fellow legislators have copped to him that they’re getting calls on their cell phones from hospital CEOs imploring them to not support AB1611
Some acquiesce. Some don’t. AB1611 passed out of the Assembly, but not with rock star voting totals. There are a lot of abstentions here. You can guess why.
On Wednesday, July 10, the bill will have its first Senate hearing, before the Health Committee. This could well be a make-it or break-it affair. The committee is composed of seven Democrats and two Republicans and this bill needs to get five of those nine votes (or, let’s be honest, five of the seven votes).
And, yes — Chiu is told his colleagues’ cell phones are still ringing.
It remains to be seen whether our elected leaders wish to preserve a status quo in which insured patients can be stuck with crippling bills – a practice justified as a means to subsidize the uninsured like Conan Mattisson — who are then stuck with crippling bills.
When asked how he thinks things will go on Wednesday, Chiu says “I’d be surprised if it gets through committee without a substantial amendment.” He offers a wan grin. “Everything is in flux.”
In other words: Hold onto your wallet.
David Chiu’s bill would essentially do two things. One has gotten a good bit of media coverage. The other has not.
First off, it would prevent patients from receiving a bill beyond their copay. That’s the part you’ve read about, provided you’ve read about this at all. But Chiu’s bill would also take the likely even more impactful step of standardizing the cost of emergency room procedures.
That hasn’t been talked about as much in the media. But the hospital lobby is talking about it a lot — perhaps even on calls to our legislators’ cell phones.
Because this is the element the hospital lobby simply cannot abide. To unearth the apocryphal Willie Sutton quote, that’s where the money is.
If you eliminate hospitals’ ability to bill patients beyond the copay but don’t address chaotic and unregulated costs of ER procedures, in the end you’re not accomplishing much. The money patients save on the front end can always be extracted on the back end via higher charges and higher insurance premiums. “It’d be like closing the front door and leaving the back door open,” explains Chiu.
There’s a lot that’s complicated about health care, but this really isn’t. Hospitals would rather have the ability to charge you an unlimited amount — say the $226 suture kit used for Mattisson’s one stitch — than a regulated, limited amount.
“They do not need to justify their charges. They have full discretion,” Ge Bai, a Johns Hopkins professor of both accounting and health management and policy, told us last month.
Hospital billing is, bewilderingly, almost wholly unrelated to the actual costs incurred by the hospital.
“There are no regulatory forces to limit their ability to set a high charge,” Bai continues. “The charge is coming purely from the hospital and subject to no external forces.”
Even for insured patients, Bai notes, ER billing is a strange pas-de-deux between insurance companies and the hospital in which the latter establishes leverage by setting a ridiculous initial price unrelated to any cost factor or basis in reality, and the former argues them down to a percentage of this ridiculous price unrelated to any cost factor or basis in reality. The loser, clearly, is the patient, whom Bai refers to as “prey” in a predatory system.
Chiu’s bill, notably, would constitute “regulatory forces.” Most CEOs with legislators’ cell numbers on speed dial would prefer to not be regulated.
That’s just how politics is; that’s just how the political process works.
Come Wednesday, it’ll be clearer if Chiu’s emergency room bill requires an emergency room of its own. Or a morgue.
Update, Wednesday, July 10: Facing long odds, Chiu and Sen. Scott Wiener opted to change AB1611 into a two-year bill. This essentially hits the pause button on the legislation and gives Chiu a year to marshal more support. His other options, neither good, were to push ahead with a losing proposition, thereby forcing the senators to, on the record, kill this bill or accept unwanted amendments.