Out-of-Control Medical Billing is Hindering Pandemic Recovery

In a recent survey, one-third of people who still haven’t been vaccinated against Covid-19 said fear of the cost is a factor. Federal law is very clear: no health care provider is allowed to bill any patient for the vaccine. But with a health care system that produces so many medical billing horror stories, it’s little wonder that patients don’t trust providers to follow the law.

Many patients trying to obtain preventive care like vaccinations or cancer screenings receive unexpected medical bills. The Affordable Care Act (ACA) prohibits cost-sharing for these services, and for good reason: regular preventive care helps people avoid or manage many chronic illnesses, gives them better outcomes for many types of cancer, and helps us control infectious diseases like flu and Covid-19 through vaccinations. But bills for preventive care still sneak through. One common issue arises when providers use the wrong billing code. If a service isn’t coded as protected preventive care, patients get charged. Patients then have to try and decipher what went wrong, even though the bills they receive are not required to include those codes or even explain what services are being charged for. Legislation proposed in New York State called the Patient Medical Debt Protection Act would have required providers to list all services being charged for in plain language on every medical bill but has failed to pass two years in row.

Facility fees are another way that patients end up with bills for preventive care. Facility fees are administrative charges not associated with any medical service. They are typically charged by hospitals. However, as hospitals purchase more outpatient medical offices, more patients get hit with facility fees outside of hospitals. Facility fees aren’t charges for any specific medical service, so the ACA’s prohibition on charging for preventive care doesn’t apply. (You can learn more about facility fees here and here.) Legislation that would have barred billing for facility fees after preventive care visits passed the New York Senate this session but failed to move in the Assembly. The bill also would have required providers to tell patients ahead of time that facility fees will be applied to their bill, giving them the chance to schedule appointments somewhere else.

Patients are so distrustful of our health care system that it is interfering with our ability to achieve public health goals. Patient protections such as those that prohibit cost-sharing for Covid-19 vaccinations can help. However they can’t solve the problem. Patients should only receive medical bills that clearly explain charges and be told ahead of time about fees that will be added to their bill no matter what care they receive. Health care providers and public health officials can educate the public about vaccinations and preventive health screenings, but it won’t convince patients who have learned from experience that the only way to avoid unaffordable medical bills is to avoid medical care whenever they can.   

Ellen, a Long Islander, received an unexpected and unwelcomed bill from a hospital system when she went to her doctor’s office for a biopsy.  She was not anticipating a “net facility charge” of $2,142 which she was not informed of.   She protests that she was not provided with any notice that she would be charged extra for a facility charge when she was visiting a doctor.  She also received a bill for net charges of $618.07 from the Doctor.  “Had I known that was the billing practice, I would not have visited this doctor,” she says.

She adds, “There was nothing from the doctor or her staff, or from the circumstances of the procedure, that would have indicated to me that I was being treated at a hospital.  Both the examination and the procedure took place in a typical examining room at the doctor’s office. I was not even placed on a special chair for the procedure— I was wearing my street clothes.”  The facility fee is not a charge for an actual health service.  As of now, it is a legal way for the hospital that bought your doctor’s office or clinic to add the hospital’s overhead cost to your doctor’s bill.  Health Insurance often will not pay these facility fees, leaving the patient stuck with the bill, uninsured patients are always stuck with these facility fee bills. 

A new bill, the (A3470B/S2521B), would regulate these health care facility fees and provide some semblance of protection by not allowing a provider to seek payment of these fees if not covered by insurance, unless they had notified and explained the fee and amount at least seven days in advance of the procedure.  If approved by the New York State Legislature and signed into law by the Governor, the would ensure that patients will no longer be held responsible for this kind of surprise bill and what happened to Ellen will no longer happen to any other New Yorker. The bill would also prevent facility fees for preventive care – New York will be the first state to do so if it passes!

New Yorkers struggle with health care costs, even when they have insurance. Over 50,000 New York patients have been sued for medical debt by non-profit hospitals in the past five years—over 5,000 during the COVID-19 pandemic (March – December 2020). Check out the Community Service Society of New York’s Discharged Into Debt: A Pandemic Update report here to learn more. To add insult to injury, non-profit hospitals often charge an additional 9 percent interest on top of their medical debt judgments, adding hundreds if not thousands of dollars to their bills.  This is allowed under section 5004 of the New York Civil Laws and Practice Rules—which makes no distinction about the type of entity that is suing or what the person is being sued for.

Patients often cannot determine when they need health care and how they get it. And they are paying the price. For example, on January 5, 2021, the New York Times profiled Scott Buckley, a 48 year-old Stop & Shop employee, who was sued for $21,028 in medical bills. He then received a judgment that included another $4,000 in interest and fees—at the statutory 9 percent interest rate. As Mr. Buckley put it, “I am literally broke…I don’t have a penny to my name. I have three kids. If they take my paycheck, I won’t have anything.”

Enough is enough. New York’s hospitals benefit from their non-profit status and should behave like charities, not loan sharks. Luckily, now there is a bill that will address these outrageous practices, S3057A/A1538A. This bill would ensure that a reasonable U.S. Treasury rate—currently around 1 percent—would be imposed in medical debt collection cases instead of the allowable 9 percent, and it would cap interest at no more than 3% if that rate goes up precipitously.   

HCFANY would like to thank Assemblymember Richard Gottfried and Senator Gustavo Rivera for introducing this important piece of legislature. Join us and our partners in supporting this bill! 27 different patient advocacy groups—Citizen Action of New York, African Services Committee, The Actors Fund, and many more across New York State—have written memos of support for the passage of this bill.

S3057A is calendared to be voted on in the Senate Judiciary Committee on Tuesday, 5/11/21. Please take action and tell our members of the Senate Judiciary Committee to pass this bill. Need a list of who is on the committee? We got you: Senator Jamaal T. Bailey, Senator Alessandra Biaggi, Senator Phil Boyle, Senator Neil Breslin, Senator Andrew Gounardes, Senator Brad Hoylman, Senator Anna Kaplan, Senator Andrew Lanza, Senator Zellnor Myrie, Senator Thomas O’Mara, Senator Peter Oberacker, Senator Anthony Palumbo, Senator James Skoufis, Senator Toby Ann Stavisky, and Senator Kevin Thomas.

Medicaid Matters New York and Health Care for All New York – the two major statewide health care consumer advocacy coalitions – applaud the State Legislature for several historic additions to the adopted state budget for 2021-22 related to funding for public schools and universities, rental and mortgage assistance, assistance to undocumented essential workers and small businesses, and taking some first steps toward restoring progressivity to the state’s tax system.  Millions of low-income New Yorkers who rely on our state’s public health insurance programs will benefit from these improvements to the Governor’s initial set of budget proposals.

However, our State leaders failed to break ground in health care, which is disappointing in light of a decade of austerity budgets and the ongoing nature of the COVID-19 public health crisis.  Medicaid Matters and HCFANY are specifically concerned about the following issues: 

  • The arbitrary Medicaid global spending cap was extended for another year.  As a consequence, Medicaid continues to be approached with an austerity mindset.  For ten years, Medicaid has suffered from unnecessary cuts, impacting access to services for low-income people, families, people with disabilities and communities.
  • Public health insurance coverage was not expanded to low-income immigrants who have had COVID-19.  Instead, those who are undocumented remain reliant solely on Emergency Medicaid for acute care and charity care programs for ongoing treatment.  As a consequence, many will likely forego seeking necessary care, thereby prolonging illness and suffering, risking death, and incurring medical bills they cannot pay.
  • The home care crisis and institutional bias remain unaddressed.  Home care workers play a vital role in serving and protecting disabled New Yorkers and seniors living independently, a role that became even more critical and evident during the pandemic.  However, New York’s failure to invest in home care has created a “worst in the nation” workforce crisis that prevents meaningful access to home care services for thousands of people and results in greater institutionalization.
  • This is the first time in decades that New York State has adopted a discriminatory maternity coverage policy.  Instead, only citizen and lawfully residing immigrant women will enroll in free (state-funded) Marketplace coverage after their Medicaid ends—continuing a system that allows for disruptions in care. 
  • No new initiatives were created to address inequities that are wide-spread throughout our state’s public health, health care, and health coverage systems, despite significant federal pandemic-related funds the state has received over the past year to address these disparities.  The pandemic has revealed them clearly, and they can no longer be ignored.

On the positive side, we thank both the Governor and Legislature for these new initiatives:

  • Eliminating all premiums in the state’s Essential Plan that provides insurance coverage to low-income people and families who are not eligible for Medicaid.  This move will enable them to keep medical, dental, and vision coverage in place without financial barriers, an important step during the ongoing pandemic.
  • Protecting the financial stability of community health centers and other safety net providers by delaying the implementation of the planned pharmacy carve-out from the state’s Medicaid Managed Care program.

We also acknowledge and appreciate restorations in funding cuts initially proposed by Governor Cuomo that made no sense given our ongoing pandemic:

  • An across-the-board Medicaid rate cut that particularly threatened safety net hospitals that serve large numbers of Medicaid and uninsured patients.
  • Elimination of Indigent Care Pool funding to public hospitals.
  • Cuts to the state’s Vital Access Provider Assistance Program that keeps certain safety net and rural hospitals financially afloat.
  • Additional cuts to Article VI public health funding to New York City.
  • Allowing insurers to impose restrictions on the ability of doctors to prescribe certain drugs to Medicaid patients (elimination of the provision known as “prescriber prevails”).
  • Another 25% cut to home care workforce recruitment and retention money that would have further harmed community-based long-term care.
  • Cuts to programs serving adult home residents.

While as a whole and on the surface it may appear that New York continues to meet the needs of those enrolled in our state’s public health insurance programs and the providers they rely on, the 2021-22 adopted budget fails to make needed investments to turn away from austerity politics, protect all immigrants, expand community-based long-term care, and promote health equity.  A lack of harm must not be confused with a budget that provides for what New Yorkers need.  We can do better, and we must.