NC Attorney General Cooper says he’ll push for tighter controls on hospitals

jneff@newsobserver.comaalexander@charlotteobserver.comApril 19, 2013 

COOPER.090810.TI

N.C. Attorney General Roy Cooper

TAKAAKI IWABU — newsobserver.com

  • Other proposals

    In his letter to Sen. Bob Rucho, N.C. Attorney General Roy Cooper proposed that the legislature:

    • Give consumers the right to receive prompt and automatic refunds when they have overpaid or when a billing error occurs. Sometimes patients overpay when they inadvertently pay the hospital or doctor before the insurance company has covered some of the charges. When this happens, Cooper said, the health care facility should provide consumers with a refund within 30 days.

    • Provide consumers with a reasonable amount of time to request that health care facilities provide charity care. Some North Carolina facilities turn down requests for charity care if patients don’t apply for it before getting care or soon afterward. But in some states, patients have a year or more to apply.

    • Prohibit health care facilities from billing consumers for amounts not covered under insurance if the facility was to blame for failing to submit information to the insurance company on time. Sometimes, Cooper said, consumers run into financial problems because of such billing errors.

    • Give consumers the right to promptly receive an accurate answer from either their insurance company or their provider as to whether the provider is in-network for insurance purposes. It’s often hard for consumers to get that answer. That information matters because the price patients pay depends greatly on whether the hospital or doctor’s office is in the insurance company’s network.

N.C. Attorney General Roy Cooper has urged the legislature to make hospital bills easier to understand and to rein in aggressive bill-collecting practices.

Cooper also wants hospitals to notify his office and the Federal Trade Commission before they acquire other hospitals or physician practices, a frequent occurrence both nationally and in North Carolina. Such consolidation can increase costs for consumers, Cooper said.

“It’s important that there be competition in the health care arena, just like any other business,” Cooper said in an interview. “It’s important that when these mergers occur, it doesn’t result in higher prices and higher insurance premiums for consumers and businesses.”

Cooper, a Democrat, made his proposals in a letter to state Sen. Bob Rucho, a Matthews Republican who has introduced a bill to make hospital pricing more transparent.

The bill, introduced last month by Rucho and Sen. Harry Brown of Jacksonville, would require hospitals to publicly disclose their prices on their most common medical procedures – a move that the lawmakers say would make it easier for patients to compare prices before choosing where to receive care.

Cooper said he met Tuesday with the two senators, who seemed receptive to the idea of incorporating some of his proposals into their legislation.

“We support anything that will increase openness and transparency for patients and business owners who purchase insurance for their employees,” said Rucho, one of the Senate’s most powerful members.

Rucho and Cooper were spurred largely by “Prognosis: Profits,” a series of stories last year in The News & Observer and The Charlotte Observer, which found that nonprofit hospitals in North Carolina are inflating prices on drugs and procedures, sometime 10 or more times over cost.

Cooper said many of his proposals would address the types of patient complaints often received by his office’s consumer protection division.

Elsewhere, federal and state authorities have blocked or altered proposed health care mergers that could hurt the public.

Last year, the Pennsylvania attorney general interceded as Geisinger Health System acquired a nearby hospital. Authorities negotiated an agreement requiring the two merging hospitals to contract separately with insurers for eight years, thereby reducing their power to demand higher payments.

The FTC also has battled proposed hospital mergers, including one between OSF HealthCare and Rockford Health System in Illinois. OSF abandoned its plans to buy Rockford after the FTC’s lawsuit.

‘Restore some fairness’

Health care is one of the most expensive services for consumers and employers, but there is little transparency. Hospitals don’t publicly post their prices. Patients seldom know the charges until they receive their bills, which can be difficult to understand. Cooper said the law should require health care providers to put their bills in plain, easy-to-understand language.

“Consumers should not have to wade through incomprehensible medical codes and undefined jargon to make sense of the charges,” he wrote.

Under current law, patients can request a detailed itemized bill from their provider, but only within 30 days of discharge. Cooper suggested moving that to three years – the amount of time a hospital has for filing a collection action against a patient.

The newspapers found that many uninsured patients are never offered charity care, the act of forgiving all or part of a bill. Some hospitals pursue uninsured or financially distressed patients who can’t, or haven’t, paid their bills, sometimes suing them and placing liens against their property.

In the Triangle, hospitals turn to collection agencies, which aggressively pursue payment, sometimes even after patients have paid. Those who don’t pay can be reported to credit agencies, which can damage their credit for up to seven years, hurting their ability to refinance a mortgage or buy a car.

Cooper said hospitals should follow reasonable collection practices, such as notifying patients they will be sent to collection agencies at least 30 days before referral. Hospitals shouldn’t refer patients to collection agencies while a request for charity care is pending, Cooper said. They also should be prohibited from forcing the sale of a patient’s primary residence in order to collect on a bill, he said.

“I think it’s important to restore some fairness to the billing and collection process,” Cooper said.

In October, Cooper said he would examine whether to use antitrust laws or new legislation to lower what he called the state’s artificially high health care costs. His announcement followed stories in The N&O and the Observer showing that large nonprofit hospitals are dramatically inflating prices on chemotherapy drugs at a time when they are cornering more of the market on cancer care.

Cooper declined to say whether his office is considering antitrust action against any hospitals.

Dire consequences

Adam Linker, a policy analyst at the consumer advocacy group Health Access Coalition, applauded Cooper’s emphasis on making hospitals bills more transparent, but said he hoped the attorney general would go further. Linker said hospitals should inform patients what will ultimately happen if they don’t pay their bills.

“Are they going to lose their house? Will they be sent to a collection agency?” Linker said. “Or will the hospital make a reasonable effort to work with the patient?”

Rucho said he was not interested in collection practices or antitrust issues at this point.

The N.C. Hospital Association is already working on these issues, according to a statement from spokesman Don Dalton.

“We will work with the legislature to structure legislation that will improve transparency and provide meaningful information to our patients and communities,” the statement said.

Neff: 919-829-4516

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