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EXAMPLE OF A HEALTHCARE PRISON; Health Insurers Prosper As COVID-19 Deflates Demand For Elective Treatments

Published by: Kaiser Family Foundation

As doctors and consumers are forced to put most nonemergency procedures on hold, many health insurers foresee strong profits.

So why is the industry looking to Congress for help?

Insurers say that while that falloff in claims for non-COVID care is offsetting for now many insurers’ costs associated with the pandemic, the future is far more fraught.

Costs could remain modest or quickly outstrip savings. A recession could drive revenue down. Or the coronavirus could resurge next winter and spike treatment expenses.

All that uncertainty for the companies could trigger far higher premiums for consumers, if insurers hedge their bets. Then again, the current savings insurers are seeing — along with cautions from state regulators about pushing cost-sensitive customers away during an economic downturn — might result in minimal premium increases.

“Insurers are nervous, to be sure,” said Michael Kreidler, Washington state’s insurance commissioner. “But so far they are telling me they are in good shape. Coronavirus claims have not been that high — yet.”

Backing that assessment was a report out last week by credit rating agency Moody’s, which looked at a range of pandemic scenarios — from mild to severe — and concluded “U.S. health insurers will nonetheless remain profitable under the most likely scenarios.”

Earlier this month, UnitedHealth Group CEO David Wichmann told analysts that cost reductions so far are outstripping expenses for COVID-19 and that revenue is up compared with the previous year. He expects — barring a worsening situation — the rest of the year’s earnings to match projections. Other insurers, including Centene, Anthem, Humana and Cigna, are scheduled to release earnings reports this week.

If these results are repeated across the insurance industry, there will be pressure on insurers to hold down rate increases for next year and do more for policyholders, such as constrain the growth in deductibles and other out-of-pocket costs, said consumer advocates, regulators and policy experts.

“The last thing we need is insurers pricing their coverage unnecessarily high at a time like this,” said Peter Lee, executive director of Covered California, the health insurance marketplace in that state for people who buy their own coverage because they don’t get it through their job.

That prediction comes as tens of millions of Americans have lost their jobs — and often their health insurance.

Those thrown out of work may be able to stay on employer coverage through a federal law called COBRA, but it’s expensive and workers have to foot the bill. Insurers and employers have asked Congress for relief legislation to fully cover COBRA costs.

Losing a job is also a qualifying event to enroll in an Affordable Care Act plan — and, again, the industry has asked lawmakers to temporarily boost subsidies to help enrollees pay their premiums. Some states that run their own ACA marketplaces have reopened enrollment to help the uninsured get coverage.

The industry also wants Congress to authorize temporary financial support to help cover insurers that face “extraordinary, unplanned costs in 2020 and 2021,” according to a letter sent to lawmakers from America’s Health Insurance Plans and the Blue Cross Blue Shield Association.

To help, some states are giving insurers more time this year to submit their planned premium rates for 2021 — based on their expected costs — hoping things may be clearer by summer. California, for instance, is giving insurers until July to draw up their estimates.

One fear is that insurance actuaries, when faced with an unknown risk like the coronavirus, will price higher than needed, said Lee.

Setting premiums for next year is a balancing act. Insurers that calculate incorrectly and go too low will lose profits and may have to dig into their cash reserves to pay claims. If they set rates too high, they may run afoul of a provision in the ACA that requires insurers to issue rebates to policyholders if they don’t spend at least 80% of revenue on medical care.

And they don’t estimate well even in normal years. Early data for 2019 coverage shows insurers may owe a record amount in rebates, which will be paid out this year.

Insurers are not talking about next year’s premiums.

“We do not yet know the full scope, severity or duration of this outbreak. So we cannot know the ultimate cost of our members’ medical treatment or how long the postponement of non-urgent care will continue,” said Justine Handelman, senior vice president at the Blue Cross Blue Shield Association.

Early estimates, including a scary one from Covered California issued in late March, warned that costs associated with the coronavirus could drive premiums up 40% next year without federal help, based on initial models of the number of Americans who might fall seriously ill.

That report, though, did not take into account the effect of the sharp decline in elective care.

Thirty-one states have barred most elective surgeries, part of the effort by governors to promote social distancing to flatten the curve of the epidemic and to help prevent hospitals from being overwhelmed.

“The good news since we published that report is that it looks like efforts to flatten the curve are taking effect,” said Lee, so costs are more likely to be in the median rather than high end of the range.

The cost to insurers “all depends on the severity” of the continuing pandemic, said Dean Ungar, a vice president and senior credit officer at Moody’s. “On the lower side, the industry will do quite well, and also even in a more median scenario, especially when you factor in the offsetting benefit of delayed procedures.”

Moody’s estimates that deferred elective procedures may account for as much as 20% to 40% savings on medical costs per month for many insurers as long as elective procedures are barred or patients are unwilling to seek nonemergency care.

Even so, “I don’t think the insurance industry as a whole has any intention of making money off this,” Ungar said. “There will be rebates or other things to help. Partly that’s the right thing to do and partly it’s good business.”

Former Cigna executive turned industry critic Wendell Potter disagreed. He tweeted earlier this month that UnitedHealth spent $1.7 billion during the first quarter to buy back its own stock — a move that helps the company. “In other words, they’re thriving during a pandemic,” Potter tweeted. Instead, he said, the insurer should plow that money into premium reductions or other help for policyholders.

For its part, UnitedHealth said it has waived patient cost sharing for COVID care — as have most other insurers — as well as accelerated payments for what it owes to doctors, and is helping provide loans to some clinics.

Some physician groups fear they are being left out, saying some of the savings seen by insurers and self-insured employers should be directed to those struggling after seeing their practices dry up as people avoid medical care or governors bar elective procedures.

“It’s a huge hit,” said Tom Banning, CEO and executive vice president of the Texas Academy of Family Physicians.

Lee agreed, warning that struggling front-line physicians, and especially family and primary care doctors, will need financial help.

“A bad outcome of all this will be if thousands of providers can’t make it financially and their practices get bought up by hospitals or private entities — creating more consolidation in health care, which is already driving costs up,” said Lee. “Lawmakers should be thinking about helping primary providers out.” COPY HTML

HOSPITALS ARE HEALTHCARE PRISONS: Amid Coronavirus Distress, Wealthy Hospitals Hoard Millions

WOW…………AS WE HAVE SAID, THEIR ARE HEALTHCARE PRISONS AND HOSPITAL HAVE JUST DEMONSTRATED WHY!!

Inova Health System, with campuses in some of the wealthiest suburbs of Washington, D.C., and Truman Medical Centers, a safety-net hospital in downtown Kansas City, Missouri, have little in common. But, today, they are confronting the same financial plague: mass cancellations of nonessential surgeries that are their biggest moneymakers while bracing for an expensive onslaught of coronavirus patients.

Yet Truman has less than a month’s worth of cash reserves to keep it afloat while Inova entered the outbreak with enough money to operate for at least 21 months, according to Inova’s financial disclosure for 2019, before the stock market decline. At that time, Inova told its bondholders it had $3.1 billion in investments it could liquidate within three days. Tapping any of that may never be necessary because Inova also drew down its entire $238 million line of credit earlier this year to prepare for the pandemic.

“At the end of the day, not all hospitals are created equal,” said Charlie Shields, Truman’s president and CEO. “If you were sitting on a year of … cash on hand, that would not be as challenging, but most safety-net hospitals are south of 25 days, and we’re probably around 10. How do you manage through that?”

But Dr. J. Stephen Jones, Inova’s president and CEO, said, “Our finances are a mess at this point,” with the system postponing non-urgent treatments and eliminating 427 administration and management positions.

“This is an existential threat to every health care organization, no matter how strong they come into it,” said Jones, who cut his own salary by 25%.

As the coronavirus wreaks havoc with hospital finances, wealthy hospitals sitting on millions or even billions of dollars are in a competitive stampede against near-insolvent hospitals for the same limited pots of financial relief. Those include the $175 billion bailout fund Congress allotted for health care providers as part of two recent coronavirus packages and loans from private ban

Certainly, even the richest hospitals are having their balance sheets despoiled by a triple punch: the stock market slump, the cost of preparation for coronavirus patients and the cessation of profitable surgeries, which is costing many hospitals half or more of their revenues. Inova, for instance, has spent $32 million to buy personal protective equipment and install negative air pressure systems in 200 hospital rooms, Jones said. (As of Monday morning, the system had 323 coronavirus patients.)

But unlike safety-net and smaller hospitals, many big health systems have the resources to stay afloat without financial assistance through the summer and beyond. Half of the 284 hospitals whose bonds Moody’s Investors Service rated in 2018 had enough cash on hand to cover six months or more.

They also don’t have to rely for survival on revenue from only treating patients. Before the stock market drop, 365 hospitals — about one of every 13 — reported an investment portfolio exceeding $100 million, according to a Kaiser Health News analysis of hospital cost reports from 2018 filed with Medicare. Together, those investments pumped $2.8 billion into those hospitals that year.

“A lot of the big hospitals have developed fortress balance sheets since the financial crisis” of 2008, said Chas Roades, co-founder and CEO of Gist Healthcare, a consulting firm. “The reflex is to protect the operation.” But, he said, “if that’s a rainy day fund, it’s raining pretty hard right now.”

The wealthier hospitals face sacrifices that other hospitals might envy, such as having to postpone ambitious building projects or adding to their already large investment portfolios. They are less concerned with running out of money than with depleting their cash reservoirs so much that their credit ratings would be downgraded, which could lead to higher borrowing costs.

“Most would prefer to have a line of credit than liquidate a stock holding,” said Lisa Goldstein, an associate managing director at Moody’s.

UCHealth, a 12-hospital nonprofit system in Colorado, has temporarily stopped contributing to its investments, which as of the end of last year totaled more than $544 million in cash and liquid investments and $4 billion in long-term investments, according to its financial disclosure report. Even before the pandemic, it had been stockpiling extra cash to build an 11-story tower at the University of Colorado Hospital in Denver that will cost $388 million, said Dan Rieber, UCHealth’s chief financial officer. The system has enough liquidity to operate for more than 300 days without any new income and has obtained new lines of credit.

But when large health systems draw down those lines of credit, it makes it harder for smaller hospitals to get private aid because lenders may be tapped out, said Christopher Kerns, a vice president at Advisory Board, a health care consulting firm. “In our own discussions with lenders, there’s only so much cash that’s available, and that is putting the squeeze on the small or midsize organizations, and they are finding themselves very crushed,” Kerns said.

The federal Health and Human Services Department has not made financial leeway assets a factor in deciding how it will distribute the $100 billion bailout fund passed in March. The department is doling out the first $30 billion based on how much each health care provider was paid by Medicare last year. The department plans to distribute the remaining money with an eye toward the prevalence of coronavirus infections in a hospital or region, and in the number of low-income and uninsured patients. The latest federal stimulus package — signed by President Donald Trump on Friday — added $75 billion to the relief fund.

“There isn’t a mechanism right now to distinguish between the exceedingly well-endowed hospitals and those that are struggling,” said Dan Mendelson, founder of the consulting company Avalere Health and a private equity investor.

The association representing safety-net hospitals, America’s Essential Hospitals, has urged that cash reserves be a factor in divvying up the money, which is widely viewed as insufficient to cover all hospitals’ costs. Some member hospitals have fewer than 10 days of cash reserves and run on average margins of 1.6%, a fifth of the industry average, according to the group.

“Our hospitals are struggling now to manage surging patient volume, staff and supply shortages, and other severe challenges as their limited cash reserves dwindle,” Dr. Bruce Siegel, the association’s president, said in a statement.

Certainly, even the wealthiest hospitals are seeing their robust balance sheets being turned upside down. Following the guidance of the federal government, UCHealth has postponed elective surgeries, leading to a drop in business of 50% to 60%. Elizabeth Concordia, UCHealth’s CEO, said the system expects that it will not completely rebound even when the pandemic has diminished because many older people will be reluctant to return for elective surgeries for fear they might become infected with the coronavirus.

She said UCHealth is also on the front lines of fighting the pandemic. It currently has admitted 240 COVID-19 patients, more than any other Colorado hospital, and has been analyzing tests for rural hospitals without yet setting a contract for how much it will be reimbursed. It has also maintained its 25,000-person workforce without imposing pay reductions or furloughs.

“COVID is having a devastating impact on all of our finances,” Concordia said.

But for those hospitals with their own wealth, investment earnings can provide a buffer that most hospitals don’t have. In a forthcoming paper in the Journal of General Internal Medicine, researchers at the Johns Hopkins Bloomberg School of Public Health led by Ge Bai found that nearly all investment earnings for nonprofit hospitals were earned by just a quarter of the hospitals. Without that amount, their aggregate net income would have been 31% lower.

Investment income made up 5% of the total revenue for Trinity Health, a 92-hospital Catholic system based in Michigan and operating in 22 states, according to its financial disclosures to bondholders covering the last six months of 2019. Those investment earnings of $468 million accounted for 58% of Trinity’s surplus.

As of December, Trinity had $9.6 billion in cash and investments, enough to operate for six months. It also reported credit lines totaling $1.2 billion. Trinity did not respond to requests for comment.

The wealthier hospital systems are strongly positioned to take full advantage of whatever method the government sets for distributing the remainder of the bailout funds. They employ more reimbursement staff and have in place sophisticated methods to document every expense that they can attribute to the coronavirus response, said Simone Rauscher Singh, an assistant professor at the University of Michigan School of Public Health.

“The big hospitals are ramping up their capacity to document all this so they can go back later and say, ‘This is what we spent,’” she said. “The small hospitals are going to be in an even worse position to do that.”

PUBLISHED BY KAISER FAMILY FOUNDATION

Jordan Rau: jrau@kff.org, @JordanRau

In Fine Print, HHS Appears To Ban All Surprise Billing During The Pandemic

Federal officials offering emergency funding to hospitals, clinics and doctors’ practices have included this stipulation: They cannot foist surprise medical bills on COVID-19 patients.

But buried in the Department of Health and Human Services’ terms and conditions for eligibility is language that could carry much broader implications. It says “HHS broadly views every patient as a possible case of COVID-19,” the guidance states.

Some say that line could disrupt a longtime health care industry practice of balance billing, in which a patient is billed for the difference between what a provider charges and what the insurer pays, a major source of surprise bills ― which can be financially devastating ― for patients. It is banned in several states, though not federally.

For those immersed in the ongoing fight over surprise medical billing, the possibility that HHS might have done with fine print what Congress and the White House could not do with bipartisan support and ample public outrage caught some off-guard and raised questions about what exactly HHS meant.

As the first wave of $30 billion in payouts began to hit bank accounts last week, providers were asked to sign an online form agreeing to the government’s terms. Among those terms is that, “for all care for a possible or actual case of COVID-19,” the provider will not charge patients any more in out-of-pocket costs than they would have if the provider were in-network, or contracted with their insurance company.

The agreement is posted on the HHS.gov page.

“The intent of the terms and conditions was to bar balance billing for actual or presumptive COVID-19,” an HHS spokesperson said late Friday. “We are clarifying this in the terms and conditions.”

Lobbyists, advocates and other experts say the ambiguity could be enough to mandate that providers who accept federal funds have agreed not to send surprise medical bills to patients — whether or not they test positive for COVID-19.

“If you took the broadest interpretation, any of us could be a potential patient,” said Jack Hoadley, a professor emeritus of health policy at Georgetown University and former commissioner of the Medicare Payment Advisory Commission.

Last week, as HHS released an initial draft of its terms and conditions for the emergency funds allocated by Congress in the CARES Act, the Trump administration startled many in health care by declaring that providers would have to agree not to send surprise bills to COVID-19 patients for treatment. A White House spokesperson declined to comment.

But the blanket assertion by health officials that “every patient” is considered a COVID-19 patient, offered without further clarification, seems to go beyond the administration’s announcement and open the door to lawsuits over whether HHS intended to ban balance billing entirely.

“Because the terms and conditions do not appear to be sufficiently clarified, there is a concern that there will be legal challenges around the balance-billing provision,” said Rodney Whitlock, a health policy consultant and former Senate staffer.

Some providers and others in the health care industry have fought tooth and nail to safeguard their control over what they can bill patients for care. Dark-money groups, later revealed to be connected to physician staffing firms owned by profit-driven private equity firms, spent millions last summer to buy political ads targeting members of Congress who were working on legislation to end surprise billing.

Congress has yet to pass any legislation on the matter, but the debate is ongoing behind the scenes. Lawmakers included modest protections against being billed for COVID-19 testing in relief legislation but declined to go further.

Hoadley of Georgetown said HHS’ guidance should address some of the problems that Congress did not account for explicitly in its relief legislation, such as cases of patients being billed for testing for COVID-19 when the test results were negative.

“The providers, the insurers, everybody else is going to need clarification, as well as, of course, all of us as potential patients,” Hoadley said. “That’s going to affect our willingness to” seek testing or treatment, he said.

Frederick Isasi, executive director of Families USA, a nonprofit that advocates for health care consumers, said the group supports the administration’s guidance “wholeheartedly” but urged lawmakers to enshrine broad protections against surprise billing into law.

“It’s time to just ban them permanently, not just related to COVID,” Isasi said, adding: “Families should avail themselves of this as broadly as possible.” COPY HTML

Dealing with debt collectors during the pandemic

This Blog was published by: THE FEDERAL TRADE COMMISSION….Consumer helpful

April 22, 2020 by Seena Gressin Attorney, Division of Consumer & Business Education, FTC

Job losses have traveled hand-in-hand with the Coronavirus. If you’re having trouble paying your bills, you’re not alone. Here are a few things to keep in mind if a debt collector calls.

Consider talking with the collector at least once, even if you can’t pay right away or don’t think you owe the money. That way, you can confirm whether it’s really your debt. If it is, you may be able to work out a payment plan or settlement.

Collectors have to follow rules when they contact you. Watch the short video at the end of this post to learn about these rules. During the Coronavirus emergency, the federal government and many state and local governments also have put special programs in place that may help you manage your debt:

• The Department of Education (ED) has temporarily stopped the collection of federally-owned student loans that are in default. In fact, whether or not you’re in default, if you have federal student loans, you don’t need to pay your monthly payments from March 13 through September 30, 2020, and interest also has been suspended. Visit ED’s website to learn more.
• Some states are limiting what collectors can do during this emergency. For example, you’ve probably heard about the $1,200 economic stimulus payments that most people will get as a direct deposit to their bank account. If a debt collector or a creditor has sued you, they may have a garnishment order that would let them seize the payment when it reaches your account. Some states, however, are temporarily making debt collection seizures like this illegal. Check with your state attorney general to find out about any emergency limits on debt collection actions in your state. (A new IRS “Get My Payment” tool lets you track the payment to your account.)
• Many state and local governments have temporarily halted actions like evictions, foreclosures, and water and utility shutoffs. Contact your state and local government to find out about emergency protections that may apply to you.

If the collection calls get to be too much, you can stop them. Just send the collector a letter telling them to stop contacting you. Keep a copy for your records. Stopping the calls won’t cancel the debt. You still might be sued or have debt reported to a credit bureau. But, stopping the calls may give you time to regroup, then start working your way toward financial recovery.

New federal rules will let patients put medical records on smartphones

• BY FRED SCHULTE, KAISER HEALTH NEWS , ERIKA FRY, FORTUNE
• MAR 11, 2020

This article is a GAME CHANGER for the Healthcare Consumer.

Federal officials on Monday released groundbreaking rules that will let patients download their electronic health records and other health care data onto their smartphones.

“Patients should have control of their records, period. Now that’s becoming a reality,” said Health and Human Services Secretary Alex Azar. “These rules are the start of a new chapter in how patients experience American health care.”

Officials said the rules likely will give patients a greater say in health care decisions and put an end to a long-standing practice in which some doctors and hospitals resist handing complete medical files over to patients upon demand. Many of the provisions are set to take effect in 2022.

“The days of patients being kept in the dark are over,” said Centers for Medicare & Medicaid Services Administrator Seema Verma. “In today’s digital age, our health system’s data-sharing capacity shouldn’t be mired in the Stone Age.”

Yet the new rules also have raised concerns about privacy as technology companies, such as Google, Microsoft, Apple and Amazon, open up new markets for providing medical records through mobile apps. Major EHR vendor Epic, for instance, has warned that freer flow of medical records could spur the unwanted sale of data or other unauthorized uses.

“Family members may be shocked to find that their most personal health data has been mined and sold by data brokers and is now known by others, Epic CEO Judy Faulkner wrote last June in opposing the rules.

Administration officials said they have taken privacy considerations into account and would require developers to attest to plans to protect the security and use of medical data.

Verma took a swipe at Epic in an interview with Kaiser Health News and Fortune.

“We’re not afraid to take on special interests to do what’s right for patients. Some people disagree because they want to keep the data,” she said. “The reality is that patient data belongs to patients. It doesn’t belong to EHR companies.”

Verma said the nation’s health care system remains “hugely expensive and inefficient as repeat tests drive up costs and, perhaps most importantly, doctors are forced to provide care with an incomplete clinical picture, especially at a time when the health care systems could be under stress.”

“With the handling of the COVID virus, the urgent need for coordinated integrated care could not be clearer,” she said.

Donald Rucker, who coordinates health information technology policy for HHS, said the new rule “will allow patients the ability to manage their health care the same way they manage their finances or the travel or other parts of their life on their smartphone.”

While Epic, the maker of the most-used electronic health records software, led a campaign to derail the rules, its chief competitor, Cerner Corp., argued the rules were long overdue.

“Consumers should have the right to access the health care information their providers have about them and dictate where they want it to go. Although existing laws allow patients to access their data, it doesn’t work,” Cerner CEO Brent Shafer said in a statement.

The rules also attempt to prevent EHR vendors from silencing critics of their software products. The government wants to encourage doctors and other users of EHR technology to share their experiences about software problems by prohibiting so-called gag clauses in sales contracts. That could free users to criticize EHR systems, including more open discussion of flaws, software glitches and other breakdowns.

“Botched Operation,” an investigation published by Kaiser Health News and Fortune last year, found that the federal government has spent more than $36 billion on the EHR initiative. Thousands of reports of deaths, injuries and near misses linked to digital systems have piled up in databases over the past decade — while many patients have reported difficulties getting copies of their complete electronic files, the investigation found.

Consumers have long sought to be more in the loop on health care decisions in a user-friendly form. Many specifics about how that will happen, including how patients would make sense of complex pricing policies for purchasing health care and insurance and assessing quality, remain unclear, however.

To cut down on exorbitant “surprise” medical bills, Verma said, the CMS’ new rule would require insurers to let patients know which medical providers are in their networks. One study found that such bills — often not covered by insurance — have struck more than half of American adults.

For well over a decade, federal officials have struggled to set up a digital records network capable of sharing medical data and patient records. In 2004, President George W. Bush said he hoped to have a digital record for most Americans within five years. In early 2009, the Obama administration funneled some $36 billion in economic stimulus money to help doctors and hospitals buy the software needed to replace paper medical files.

Despite the slow progress, federal officials remain optimistic that digital records will save the nation billions of dollars while reducing medical errors, unnecessary medical testing and other waste — and encouraging more Americans to take a bigger role in managing their health care by comparing prices.

Trump administration officials on Monday sought to blame the Obama administration for creating what they called a “tower of Babylon,” in which doctors and health systems couldn’t seamlessly share patient information or “talk to one another.”

“It’s led to a tremendous amount of frustration on the part of medical professionals and patients as physicians, interacting with patients, oftentimes spend more time looking at computer screens than they do into the eyes of the people they’re trying to heal,” said White House official Joe Grogan.

New rules for digital charts

The Department of Health and Human Services on Monday issued two rules to give patients greater access to their electronic health records.

Among the key provisions:

• Patients must be able to access their medical records on a smartphone at no cost and can share those records as they choose.
• Health systems must be able to exchange information about patients’ past medical treatments or conditions.
• “Information blocking” practices (that is, anti-competitive behaviors) by health care providers, developers of electronic medical records and others are prohibited.
• Electronic medical record certification requirements are updated so that health professionals can discuss safety and usability concerns without being bound by gag clauses in software sales contracts.
• Insurers are required to share health claim data with patients on Medicare and Medicaid through a mobile app.
• Insurers must advise patients of their network of health providers through an app.

This article was first posted on Kaiser Health News. It also appeared on Fortune.

About the Authors

Fred Schulte is the John A. Hartford Senior Correspondent on the Kaiser Health News enterprise team.

Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.

Erika Fry is a senior writer at Fortune Magazine.

Appendicitis Is Painful — Add A $41,212 Surgery Bill To The Misery

As reported by the Kaiser Family Foundation

Joshua Bates knew something was seriously wrong. He had a high fever, could barely move and felt a sharp pain in his stomach every time he coughed.

The 28-year-old called his roommate, who rushed home that day in July 2018. The pair drove to the nearest emergency room, the Carolinas Medical Center in Charlotte, North Carolina. After several tests, including a CT scan of his abdomen, the emergency team determined Bates had acute appendicitis.

“They said my appendix was minutes away from rupturing,” Bates said.

Not mentioned, he said, was that the hospital was out-of-network with the insurance plan provided through his job. Even so, he couldn’t have jumped up and gone elsewhere. His appendix was about to burst.

He had surgery that night, which went smoothly, and went home the next day.

“Everything seemed according to plan,” said Bates.

Then the bill came.

Patient: Joshua Bates, a technical recruiter for a staffing firm, who lives in Charlotte, North Carolina. The Continental Benefits insurance plan comes with a deductible of $2,000 and an annual out-of-pocket maximum of $6,350.

Total Bill: $41,212 covering the surgery, one night at the hospital and the emergency room charges. After payments by both Bates and his insurer, the hospital sent Bates a bill for the balance, just over $28,000.

Service Provider: Carolinas Medical Center, owned by Atrium Health, a not-for-profit health system based in Charlotte.

What Gives: Bates was “balance billed” because he went to an out-of-network hospital — and, even though it was an emergency, he fell through the limited protections in existing law.

“Terrifying,” is how Bates describes the feeling when he first saw the bill for $28,000. Don’t worry, his insurer told him, it would negotiate with the hospital.

“If you pay your complete deductible, this will all go away,” Bates recalled the insurer saying. “I pay. It doesn’t get resolved.”

More than a year later, with negotiations between the hospital and his insurer at a standstill and his credit score falling because the $28,000 debt has gone to collections, a frustrated Bates contacted “Bill of the Month.”

“From what my insurance is telling me, the hospital is just non-responsive to them trying to negotiate this price,” he said.

His situation is not unusual. A recent study found that about 18% of emergency room visits have at least one such charge for out-of-network care.

A balance bill is the difference between what insurers pay toward a bill and a provider’s “list charges,” which facilities set themselves and often bear little or no relationship to actual costs.

In Bates’ case, the insurer paid $8,944 toward the $41,212 charges, according to his explanation of benefits from his insurer. On top of that, Bates paid the hospital about $4,000, a combination of his annual deductible and his coinsurance for emergency care. That left $28,295 of the hospital’s charges unpaid.

The online site Healthcare Bluebook, which calculates costs based on health insurers’ claims data, estimates a laparoscopic appendectomy ranges from $9,678 to more than $30,000 in Bates’ ZIP code. The “fair price” it suggests for the surgery is $12,090 — completely in the ballpark of the $12,944 that Bates and his insurer already paid the hospital. Fair Health, another site that collects claims data, estimates total costs for an out-of-network appendectomy at $19,292 — about $11,000 less than the hospital says Bates still owes.

“It’s ridiculous. He’s a young kid who goes to the emergency room and he has insurance,” said Duane Sunby, the insurance broker for Bates’ employer.

Sunby added that Continental’s payment to the hospital was nearly 2½ times more than Medicare would have paid for similar services, but the facility is going after Bates for more than seven times what the federal government would pay. A growing outcry about such balance bills has attracted attention from statehouses and Congress, but current protections for patients often fall short.

Congress last year debated several bills that would have provided federal protection nationwide, especially for emergency room patients. But bipartisan efforts stalled late in the year following intense lobbying by providers, including private equity-backed physician groups, over how to calculate what insurers should pay providers.

Bates is the kind of person who would be helped by a federal law, because his employer “self-funds” his insurance plan — all such plans are regulated by the federal government.

In the absence of federal rules, about 21 states have taken action, although a study from policy experts at Georgetown University Health Policy Institute cites only nine as having comprehensive protections.

North Carolina, where Bates lives, has partial protections for people in state-regulated plans, according to the study. It limits, for example, the amount patients owe in out-of-network emergency cases. But the state law doesn’t cover Bates’ type of job-based insurance.

“We really need a federal solution,” said Maanasa Kona, an assistant research professor at Center on Health Insurance Reforms at Georgetown.

Bates’ insurer brought in third-party Advanced Medical Pricing Solutions, which examined his bill and called the nearly $28,000 “excessive charges.” It sought in September an adjustment or an explanation of the charges.

That came not long after Bates received a “final” payment notice from a collections group connected with the hospital. A credit reporting agency “told me it would continue to impact my credit score,” said Bates.

Resolution: After KHN and NPR placed inquiries about his bill with the hospital, insurer and AMPS, Bates received a call from a top executive at the Carolinas Medical Center.

“He seemed really eager to help me out,” said Bates, “which is crazy after two years of reaching out and trying to communicate with them. They call shortly after they catch wind of the story.”

However, in an email to KHN, an Atrium Health spokesperson essentially pointed to the insurer for a solution.

“We believe it is imperative that insurance companies cover the costs for patients who are unable to choose where they are treated due to a medical emergency,” wrote Dan Fogleman. “We continue to be willing to work with this patient to pursue any additional payments that may be due to them from the insurer.” Continental Benefits CEO Betsy Knorr declined to comment: “It is a legal issue at this point and we do not want to prejudice the process.”

Bates is deflated.

“The hospital is trying to put all the burden on the insurance, and the insurance is trying to put the burden on them. I’m back to square one, essentially.”

The Takeaway: Insurance plans’ yearly out-of-pocket maximums apply only if you stay in-network. So, if possible, check ahead of time to see if your hospital is in-network — and the network status of anyone who might be involved with your care.

Sometimes that isn’t possible, as in Bates’ case. What then?

If you get a balance bill after your insurer has paid the provider, check state laws and with your state’s insurance regulators to see what protections you may have, said Kona, particularly if your bill resulted from an emergency room visit.

Ask your insurer or employer to pay the bill or to negotiate a discount with the provider, said Mark Hall, a law professor at Wake Forest University who studies contract law and medical billing issues.

Check online claims data websites, such as Healthcare Bluebook and Fair Health, to research what insurers pay for similar care in your area. Use that price range in negotiations about what you may owe.

Even if your employer plan is exempt from state laws limiting patient responsibility for out-of-network emergency care, ask the provider to honor that benefit. They don’t have to agree, but it can be worth a shot.

Hall also said patients may be able to hire a lawyer and go to court challenging whether the amount being charged is reasonable, although that could be costly and success is not guaranteed.

Loopholes Limit New California Law To Guard Against Lofty Air Ambulance Bills

This is a great example of a consumer in a healthcare prison.

Kathleen Hoechlin lost control as she crested a small jump on her final ski run of the day at California’s Mammoth Mountain two years ago. She landed hard on her back, crushing one of the vertebra in her lower spine “like a Cheerio,” she said.

An air ambulance flew Hoechlin, then 32, to an airport near Loma Linda University Medical Center in Southern California’s Inland Empire. There she underwent emergency 12-hour surgery to remove bone fragments and replace the crushed vertebra with a metal cage that was fused to the rest of her spine with rods and screws to provide structure and stability.

Hoechlin was still in intensive care when her husband, Matt, got the bill for the 300-mile air ambulance ride. The total: $97,269. The company wasn’t in their health plan’s network of providers, and the PPO plan they had through Matt’s job agreed to pay just $17,569.

The Hoechlins were on the hook for the $79,700 balance.

“It was just shocking,” said Hoechlin, who worked as a business analyst project manager in Highland, California. “I was just focused on, ‘Am I going to be able to walk again?’ I thought I was going to have a heart attack when he told me.”

A California law that took effect Jan. 1 aims to protect consumers from such enormous bills for out-of-network air ambulance services. The measure limits what consumers owe if they’re transported by an air ambulance that’s not part of their insurance network to the amount that they’d be charged if they used an in-network provider. The health plan and the air ambulance provider must then work out payment between themselves.

But the new law won’t protect consumers like Hoechlin, whose health plan isn’t regulated by the state. Matt’s employer pays its workers’ medical claims directly rather than buying state-regulated insurance, a common arrangement called “self-funding.” Self-funded plans are regulated by the federal government and generally not subject to state health insurance laws.

In this regard, the new air ambulance law is like laws in California and other states that protect consumers from surprise medical bills: They don’t apply to residents in federally regulated health plans. Those plans cover about two-thirds of people who get insurance through their jobs nationwide.

In California, that translates to nearly 6 million people.

Federal legislation is the best solution for those consumers, experts say. One of the leading bills before Congress to address surprise medical bills includes air ambulance charges. But that, and other measures, are up in the air, although members of Congress say they are working to reach an accord this year.

Another legal wrinkle affects even consumers with health plans the state does oversee. Under the federal Airline Deregulation Act of 1978, states aren’t permitted to regulate the “rates, routes, or services” of air carriers, including air ambulances. It’s unclear whether the California law, which doesn’t spell out a payment rate for a health plan, would be preempted by federal law if challenged in court, according to legal experts.

“It’s a very big step in balance billing, but it’s not a definitive one,” said Samuel Chang, a health policy researcher at the Source on Healthcare Price and Competition, a project of the University of California-Hastings.

Although people rarely need to be transported by a helicopter or airplane for medical care, it’s often an emergency when they do, and they’re unable to shop for an in-network provider, even if their health plan offers one. According to a federal Government Accountability Office analysis of air ambulance private insurance claims, 69% of air ambulance transports were out of network in 2017.

The median price charged in 2017 was $36,400 for a transport by helicopter and $40,600 by plane, according to the report. If an insurer doesn’t have a contract with an air ambulance provider, the air ambulance company may bill the consumer for whatever the insurer doesn’t pay, a practice known as balance billing.

“The air ambulance issue is such a big deal because it’s just such an eye-popping bill,” said Yasmin Peled, the policy and legislative advocate at Health Access California, a consumer advocacy group.

Air ambulance providers defend their charges, saying the rates offered by commercial insurance companies barely cover their costs. And public insurance programs often pay even less.

“Seven out of 10 of our transports are Medicare, Medicaid or uninsured,” said Doug Flanders, director of communications and government affairs at Air Methods, a large air ambulance company that provides services in 48 states, including California. Medicare pays Air Methods an average of $5,998 per transport, and Medicaid payments are typically half of that, Flanders said via email. That presents a “huge financial challenge,” he said.

In recent years, Air Methods has focused on joining the networks of some major insurers, including Blue Shield of California and Anthem Blue Cross of California, Flanders said. In addition to protecting patients, being in network “stabilizes operations and eases the administrative burden of the claims processing procedures created by insurers,” he said.

For the past several years, reimbursements by Medi-Cal, the state’s Medicaid program, for air ambulance services have been bolstered by funds collected from penalties for traffic violations. But the penalty was slated to sunset in 2020. Under the new California law, the state will extend supplemental funding of Medi-Cal payments for air ambulance services until 2022. Without that agreement, the rates would have reverted to much lower 1993 levels.

With the higher Medi-Cal rates, the industry supported the bill, including the prohibition on balance billing. In fact, the California Association of Air Medical Services sponsored the bill, although it didn’t respond to requests for comment.

In contrast, when other states have tried to prohibit air ambulance balance billing, the companies have often successfully challenged those laws on the grounds that the federal Airline Deregulation Act of 1978 prohibits state rate setting, according to Erin Fuse Brown, an associate law professor at Georgia State University who has studied air ambulance billing.

Legal experts say California’s approach may thread the needle where other states have failed.

“I do think the state has a pretty tolerable argument here that they are not regulating rates,” said Christen Linke Young, a fellow at the USC-Brookings Schaeffer Initiative for Health Policy. “They are telling the air ambulance providers who they can go to to get paid, but they’re ultimately not telling the amount that is getting paid.”

Kathleen Hoechlin and her husband, who now live in Riverside, California, eventually negotiated the amount they owed down to $20,000, arguing to the air ambulance firm that by tapping their savings and using money from a GoFundMe campaign, that was all they could afford.

She is now able to walk with only a slight limp. But she continues to deal with severe pain due to nerve damage. She recently underwent a fourth surgery to implant a spinal cord stimulator to interrupt the pain signal to her brain.

“When you look at the bigger picture, at the total amount, we’re feeling very fortunate,” she said.

This KHN story first published on California Healthline, a service of the California Health Care Foundation. COPY HTML

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For Her Head Cold, Insurer Coughed Up $25,865

WOW….consumers that are trapped in a healthcare prison.

Alexa Kasdan had a cold and a sore throat.

The 40-year-old public policy consultant from Brooklyn, N.Y., didn’t want her upcoming vacation trip ruined by strep throat. So, after it had lingered for more than a week, she decided to get it checked out.

Kasdan visited her primary care physician, Dr. Roya Fathollahi, at Manhattan Specialty Care just off Park Avenue South, and not far from tony Gramercy Park.

The visit was quick. Kasdan got her throat swabbed, gave a tube of blood and was sent out the door with a prescription for antibiotics.

She soon felt better and the trip went off without a hitch.

Then the bill came.

Patient: Alexa Kasdan, 40, a public policy consultant in New York City, insured by Blue Cross and Blue Shield of Minnesota through her partner’s employer.

Total Bill: $28,395.50 for an out-of-network throat swab. Her insurer cut a check for $25,865.24.

Service Provider: Dr. Roya Fathollahi, Manhattan Specialty Care.

Medical Service: Lab tests to look at potential bacteria and viruses that could be related to Kasdan’s cough and sore throat.

What Gives: When Kasdan got back from the overseas trip, she said, there were “several messages on my phone, and I have an email from the billing department at Dr. Fathollahi’s office.”

The news was her insurance company was mailing her family a check ― for more than $25,000 ― to cover some out-of-network lab tests. The actual bill was $28,395.50, but the doctor’s office said it would waive her portion of the bill: $2,530.26.

“I thought it was a mistake,” she said. “I thought maybe they meant $250. I couldn’t fathom in what universe I would go to a doctor for a strep throat culture and some antibiotics and I would end up with a $25,000 bill.”

The doctor’s office kept assuring Kasdan by phone and by email that the tests and charges were perfectly normal. The office sent a courier to her house to pick up the check.

How could a throat swab possibly cost that much? Let us count three reasons.

First, the doctor sent Kasdan’s throat swab for a sophisticated smorgasbord of DNA tests looking for viruses and bacteria that might explain Kasdan’s cold symptoms.

Dr. Ranit Mishori, a professor of family medicine at the Georgetown University School of Medicine, said such scrutiny was entirely unnecessary. There are cheap rapid tests for strep and influenza.

“In my 20 years of being a doctor, I’ve never ordered any of these tests, let alone seen any of my colleagues, students and other physicians, order anything like that in the outpatient setting,” she said. “I have no idea why they were ordered.”

The tests might conceivably make sense for a patient in the intensive care unit, or with a difficult case of pneumonia, Mishori said. The ones for influenza are potentially useful, since there are medicines that can help, but there’s a cheap rapid test that could have been used instead.

“There are about 250 viruses that cause the symptoms for the common cold, and even if you did know that there was virus A versus virus B, it would make no difference because there’s no treatment anyway,” she said.

(Kasdan’s lab results didn’t reveal the particular virus that was to blame for the cold. The results were all negative.)

The second reason behind the high price is that the doctor sent the throat swab to an out-of-network lab for analysis. In-network labs settle on contract rates with insurers. But out-of-network labs can set their own prices for tests, and in this case the lab settled on list prices that are 20 times higher than average for other labs in the same ZIP code.

In this case, if the doctor had sent the throat swab off to LabCorp ― Kasdan’s in-network provider ― it would have billed her insurance company about $653 for “all the ordered tests, or an equivalent,” LabCorp told NPR.

The third reason for the high bill may be the connection between the lab and Kasdan’s doctor. Kasdan’s bill shows that the lab service was provided by Manhattan Gastroenterology, which has the same phone number and locations as her doctor’s office.

Manhattan Gastroenterology is registered as a professional corporation with the state of New York, which means it is owned by doctors. It may be the parent company of Manhattan Specialty Care, but that is not clear in its filings with the state.

Fathollahi, the Manhattan Specialty Care physician, didn’t respond to requests for comment. Neither did Dr. Shawn Khodadadian, listed in state records as the CEO of Manhattan Gastroenterology.

The pathologist listed on the insurance company’s “explanation of benefits” is Dr. Calvin L. Strand. He is listed in state records as the laboratory director at Manhattan Gastroenterology, as well as at Brookhaven Gastroenterology in East Patchogue, N.Y. We tried to reach him for comment, as well.

Even though Kasdan wasn’t stuck with this bill, practices like this run up the cost of medical care. Insurance companies base premiums on their expenses, and the more those rise the more participants have to pay.

“She may not be paying anything on this particular claim,” said Richelle Marting, a lawyer who specializes in medical billing at the Forbes Law Group in Overland Park, Kan., who looked into this case for NPR. “But, overall, if the group’s claims and costs rise, all the employees and spouses paying into the health plan may eventually be paying for the cost of this.”

Marting said this is a common problem for insurance companies. Most claims processing is completely automated, she said. “There’s never a human set of eyes that look at the bill and decide whether or not it gets paid.”

Kasdan did pay her usual $25 copay for the office visit, and a $9.61 fee to LabCorp for a separate set of lab tests.

Resolution: “I made it very clear [to the doctor’s office] that I was unhappy about it,” Kasdan said. In fact, she told them she would report the doctor to the New York State Office of Professional Medical Conduct. Next, she reached out to “Bill of the Month,” a joint project of NPR and Kaiser Health News.

After a reporter started asking questions about the bill, BCBS of Minnesota stopped payment on the check it issued and is now investigating.

Jim McManus, director of public relations for Blue Cross and Blue Shield of Minnesota, said the company has a process to flag excessive charges. “Unfortunately, those necessary reviews did not happen in this case,” he wrote in an email.

The Takeaway: Surprise bills often arise when an in-network doctor or hospital involves another provider who isn’t in the patient’s insurance network, without the patient’s consent. But it is often nearly impossible for a patient to detect when that is occurring.

Patients can try to protect themselves from surprise bills by asking for details at their doctor’s appointments.

“I always ask where they’re sending my labs or where they’re sending my images [like X-rays], so I can make sure that’s in-network with my insurance company,” attorney Marting said.

They can also probe why a test is being ordered:

“It is OK to ask your doctor, ‘Why are you ordering these tests and how are they going to help you come up with a treatment plan for me?’” said Georgetown’s Mishori. “I think it’s important for patients to be empowered and ask these questions, rather than be faced with unnecessary testing, unnecessary treatment and also, in this case, outrageous billing.”

If you’re sitting on the exam table thinking, “I won’t ask. … How much could it be?” The answer could be a lot.

New York state has a law to protect patients from surprise bills. The law requires doctors’ offices to warn patients in advance that they are using an out-of-network provider and that patients may be responsible for excess charges. If a patient doesn’t consent to the involvement of an out-of-network doctor, then they must be financially held harmless for the bill. But it doesn’t prevent the out-of-network providers from sending a bill or collecting from an insurer.

Kasdan said she was not told that the throat swab was being sent out of network at the time of her appointment, though it’s possible one of the many papers she signed included a broad caveat that some services might not be in-network.

People who suspect a bill is the result of a violation of law can report that to state authorities. In this case, the New York State Department of Financial Services investigates complaints.

You can contact NPR science correspondent Richard Harris at rharris@npr.org.

When The Cost For Care Is Too High Even For Those Who Have Coverage, Patients End Up Gambling With Their Health

These are striking examples of consumer trapped in the healthcare prison.

Getting coverage can be just the first hurdle when it comes to navigating the high costs in the health industry. Many patients are delaying or even skipping care completely because they can’t afford it. In other news on health care costs and the industry: uninsured children, Medicaid payments, Oscar Health, the senior care-home industry, another Johnson & Johnson lawsuit, and more.

Cleveland Plain Dealer: ‘I Basically Have To Stay Sick:’ NE Ohioans Feel The Costs Of Delaying Health CareIn 7% of U.S. households, at least one person delayed medical care during the previous year because of worry about cost, according to results from the Centers for Disease Control and Prevention’s 2018 National Health Interview Survey. Delaying care can hurt health outcomes and result in higher health care costs.’Yet, for many, skipping treatment isn’t a choice. (Christ, 1/5)

Columbus Dispatch: Cause For Alarm: Thousands More Ohio Children Have Lost Health Insurance – News – The Columbus Dispatch Thousands more of Ohio’s youngest children had no health insurance coverage in 2018, reversing a multi-year decline in the rate of uninsured children younger than 6. The Buckeye State’s uninsured rate for infants, toddlers and preschoolers climbed to 5% in 2018 from 3.6% in 2016, a 40% jump that ranked as third-highest in the nation. Ohio had 41,642 children without health coverage, an increase of nearly 12,000 in two years, according to a recent study by the Georgetown University Center for Children and Families. (Candisky, 1/6)

Des Moines Register: Iowa Withholds $44 Million From Medicaid Insurer Over Unresolved IssuesIowa health officials are withholding $44 million from an insurance company that provides health coverage to Iowans under the state’s privatized Medicaid program, pointing to unresolved issues with payments to health providers. Iowa Department of Human Services staff told Iowa Total Care representatives Friday that the state will withhold about a third of the amount it would have otherwise paid the company this month. (Rodriguez, 1/3)

Modern Healthcare: Oscar Health Cuts Walgreens, Duane Reade Locations From Its NetworkOscar Health stopped covering Walgreens, plus some Duane Reade and Rite Aid locations, as part of its New York pharmacy network Jan. 1. Instead it is directing New York members to CVS as its preferred retail pharmacy and startup pharmacy Capsule, which it formed a partnership with last month. Its network also includes independent pharmacies. (Lamantia, 1/3)

Reveal: Lawmakers, Regulators Take On Senior Care-Home Operators Over Wage Theft, Worker AbuseRevelations about wage theft and abusive treatment of caregivers in America’s senior care-home industry have prompted tougher enforcement, a congressional hearing and plans for new state legislation in 2020. Responding to a series of stories by Reveal from The Center for Investigative Reporting, Rep. Robert C. Scott, D-Va., chairman of the House Education and Labor Committee, said he intends to hold an oversight hearing early this year in which he will press Labor Department officials to crack down on widespread exploitation in the booming industry. (Gollan, 1/3)

The New York Times: Johnson & Johnson Sued Over Baby Powder By New MexicoThe accusations in a new lawsuit against Johnson & Johnson sound familiar: The consumer goods giant knew for decades that its baby powder and other talc-based products were contaminated with carcinogenic asbestos, but continued to market the items. What makes this case different is that it was brought by a state. Hector Balderas, the attorney general of New Mexico, accused Johnson & Johnson on Thursday of misleading consumers, especially children and black and Hispanic women, about the safety of its talc products. (Hsu, 1/3)

The Hill: Delta Workers File Lawsuits Claiming Uniforms Causing Medical ProblemsHundreds of Delta Air Lines employees are suing Wisconsin-based clothing company Lands’ End, claiming uniforms made by the company have caused serious health problems. The first class-action lawsuit was filed in October, and the second was filed Tuesday in Madison, Wis., the Wisconsin State Journal reported on Friday. The filings allege that the uniforms — unveiled in May 2018 — caused multiple Delta employees to suffer from a variety of health problems, including skin rashes, hair loss, low white blood cell counts, migraines and breathing difficulties. (Johnson, 1/4)

This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.

Hospital Group Mum As Members Pursue Patients With Lawsuits And Debt Collectors Kaiser Healthcare News 12.28.19

WOW….This is a great example of a HEALTHCARE PRISON…...

American Hospital Association, the biggest hospital trade group, says it promotes “best practices” among medical systems to treat patients more effectively and improve community health.

But the powerful association has stayed largely silent about hospitals suing thousands of patients for overdue bills, seizing homes or wages and even forcing families into bankruptcy.

Atlantic Health System, whose CEO is the AHA’s chairman, Brian Gragnolati, has sued patients for unpaid bills thousands of times this year, court records show, including a family struggling to pay bills for three children with cystic fibrosis.

AHA, which represents nearly 5,000, mostly nonprofit hospitals and medical systems, has issued few guidelines on such aggressive practices or the limited financial assistance policies that often trigger them.

In a year when multiple health systems have come under fire for suing patients, from giants UVA Health System and VCU Health to community hospitals in Oklahoma, it has made no concrete move to develop an industry standard.[khn_slabs slabs=”790331″ view=”inline” /]

“There could be a broader message coming out of hospital leadership” about harsh collections, said Erin Fuse Brown, a law professor at Georgia State University who studies hospital billing. “It seems unconscionable if they are claiming to serve the community and then saddling patients with these financial obligations that are ruinous.”

Nonprofit hospitals are required to provide “community benefit,” including charity care in return for billions of dollars in government subsidies they get through tax exemptions. But the rules are lax and vague, experts say, especially for bill forgiveness and collections.

The Affordable Care Act requires nonprofit hospitals to have a financial assistance policy for needy patients but offers no guidance about its terms.

“There is no requirement” for minimum hospital charity under federal law, said Ge Bai a health policy professor at Johns Hopkins. “You design your own policy. And you can make it extremely hard to qualify.”

Practices vary sharply, a review of hospital policies and data from IRS filings show. Some hospitals write off the entire bill for a patient from a family of four making up to $77,000 a year. Others give free care only if that family makes less than $26,000.[protected-iframe id=”aedbfa0a85ef8039a3dd39243640d147″ height=”1006″ width=”660″ /]

The law does not substantially limit harsh collections, either. IRS regulations require only that nonprofit hospitals make “reasonable efforts” to determine if patients qualify for financial assistance before suing them, garnishing their wages and putting liens on their homes.

Gaping differences in both collections and financial assistance show up in the policies of health systems represented on AHA’s board of trustees.

This year, AHA board chairman Gragnolati’s Atlantic Health System, in northern New Jersey, sued patients for unpaid bills more than 8,000 times, court records show.

Atlantic Health sued Robert and Tricia Mechan of Maywood, N.J., to recover $7,982 in unpaid bills for treatment of their son Jonathan at the system’s Morristown Medical Center.

Three of the Mechans’ four children have cystic fibrosis, a chronic lung disease, including Jonathan, 18. Tricia Mechan works two jobs — full time as a manager at Gary’s Wine & Marketplace and part time at Lowe’s — to try to pay doctor and hospital bills that pile up even with insurance.

“I have bill collectors call me all the time,” Tricia Mechan said. “You’re asking me for more, and all I’m doing is trying to get the best care for my children. I didn’t ask to have sick children.”

She closed a savings account and borrowed money to settle Jonathan’s bill for $6,000. Another son with cystic fibrosis, Matthew, owes Atlantic Health $4,200 and is paying it off at $25 a month, she said.

Marna Borgstrom, CEO of Yale New Haven Health, also sits on AHA’s board. Yale almost never sues families like the Mechans.

“I have not signed off on a legal action since 2015” against a patient, Patrick McCabe, the system’s senior vice president of finance, said in an interview. “People are coming to us when they are at their most vulnerable, and we truly believe we need to work with them and not create any additional stress that can be avoided.”

Yale has treated Nicholas Ruschmeyer, 30, a Vermont ski mountain manager, for recurring cancer. He has been careful to maintain insurance, but a few years ago the hospital performed a $12,000 genetic test that wasn’t covered.

“Yale completely absorbed the cost,” said his mother, Sherrie Ruschmeyer. Yale is “wonderful to work with, not at all aggressive,” she said.

Atlantic Health bars families from receiving financial assistance if they have more than $15,000 in savings or other assets. Yale never asks about savings. Even families who own homes without a mortgage qualify if their income is low enough.

Atlantic Health’s policies including seizing patient wages and bank accounts through court orders to recoup overdue bills. Yale says it does not do this.

In some ways, Atlantic Health’s policies are more generous than those of other systems.

It forgives bills exceeding 30% of a family’s income in many cases, the kind of “catastrophic” assistance some hospitals lack. It also bills many uninsured patients only slightly more than Medicare rates. That’s far less than rates charged by other hospitals in the same situation that are substantially higher than the cost of treatment.

“Atlantic Health System’s billing policy complies with all state and federal guidelines,” said spokesman Luke Margolis. “While we are willing to assist patients no matter their financial situation, those who can pay should do so.”

After a reporter inquired about its practices, Atlantic Health said it “is actively engaged in refining our policies to reflect our patients’ realities.”

AHA also is considering changing its position on billing in the wake of recent reports on aggressive and ruinous hospital practices.

Previously AHA said billing offices should “assist patients who cannot pay,” without giving specifics, and treat them with “dignity and respect.” Queried this month, association CEO Rick Pollack said, “We are reevaluating the guidelines [for collections and financial assistance] to ensure they best serve the needs of patients.”

Kaiser Health News found that the University of Virginia Health System sued patients 36,000 times over six years, taking tax refunds, wages and property and billing the uninsured at rates far higher than the cost of care. Richmond-based VCU Health’s physicians group sued patients 56,000 times over seven years, KHN also found.

In Memphis, Methodist Le Bonheur Healthcare sued patients for unpaid bills more than 8,000 times over five years, ProPublica reported. In South Carolina, hospitals have been taking millions in tax refunds from patients and their families, an examination by The Post and Courier showed.

In response, VCU pledged to stop suing all patients. UVA promised to “drastically” reduce lawsuits, increase financial assistance and consider further steps. Methodist erased debt for 6,500 patients and said it would overhaul its collections rules.

Yale’s less aggressive policies also came in response to journalism — a 2003 Wall Street Journal report on how the system hounded one family. Yale still sends overdue bills to collections, McCabe said. But it balks at the last, drastic step of asking a court to approve seizing income and assets.

For patients with unpaid bills, he said, “if you’re willing to play a game of chicken, you will win.”

Hospitals say they see more and more patients who can’t pay, even with insurance, as medical costs rise, family incomes plateau and out-of-pocket health expenses increase. In particular, they blame widespread high-deductible coverage, which requires patients to pay thousands before the insurance takes over.

“More consumers pay far more with fewer benefits,” Pollack said.

Some states go beyond federal rules for charity care and collections. In California, patients with an income of less than $90,000 for a family of four must be eligible for free or discounted care. New Jersey requires Atlantic Health and other systems to give free care to patients from families of four with income less than $51,000.

The National Consumer Law Center, a nonprofit advocacy group, suggests all states adopt that standard for large medical facilities. Its model medical debt law also would require substantial discounts for families of four with income below $103,000 and relief for patients with even higher incomes facing catastrophic bills.

The AHA should consider similar changes in its own guidelines, NCLC attorney Jenifer Bosco said.

“I would be interested in seeing them taking a more active role in creating some standard for hospitals about what’s too much,” she said. “What’s going too far? Given that this is a helping profession, what would be some appropriate industry standards?”

KHN senior correspondent Jordan Rau contributed to this report.