The Indiana Court of Appeals issued the opinion of Jackson v. Trancik (pdf) today, involving proper methods of proof for the amount due to a medical provider for medical services. The background was a doctor who provided medical services, billed the patient’s insurer, got partial payment from the insurer, got a $20 co-pay from the patient, and sued for the balance. The patient apparently did not dispute the balance due until after the lawsuit was filed. The doctor filed for summary judgment, relying on certain presumptions created under Indiana rules of evidence for medical bills (Ind. R. Evid 413) and for bills sent out that are not disputed within a “reasonable time” (the “account stated” doctrine).
The patient attempted to resist the judgment by submitting the affidavit of a person holding herself out as a medical billing expert. Her qualifications were that she makes a living evaluating medical bills (kind of a bootstrap “I’m an expert because I make my living being an expert” rationale) and she ran the bill through a coding system apparently used by insurers and found that the doctor’s bill did not comport with that billing system. The trial court struck the affidavit and, having nothing else to rebut the presumptions, summary judgment was entered in favor of the doctor.
The court of appeals took a look and concluded that the expert affidavit should have been regarded as creating a material question of fact, meaning that summary judgment was not appropriate, but the value of the services should be given to the trier of fact as a question.
If I’m reading the language of the Court of Appeals correctly, I think they’re trying to allow use of such experts when a doctor is trying to collect on a contract but not where a tortfeasor is trying to rebut a personal injury plaintiff’s prima facie case based on medical bills. I’m not sure they succeeded. In both the contract case (where the doctor is trying to collect) and the personal injury claim (where the injured party is trying to recoup the medical costs they’ve incurred because of the other party’s negligence), the standard is the reasonable value of the services. The Court of Appeals tries to thread a needle between “the amounts usually, customarily, and reasonably billed for such services” in the contract case on the one hand and “the reasonable value of the services” on the other.
The use of slightly different language does not, I don’t think, reflect an intent that the plaintiff recover anything other than the reasonable value of the services in either case. So, if the Court of Appeals is trying to create a system where doctors can be expected to wrangle with the potentially sketchy testimony of “medical billing experts” but injured plaintiffs can not; I’m not sure it succeeded, nor do I think such a double standard should stand. The underlying problem is that the lack of transparency in medical pricing is astounding. However the Courts choose to address that problem should apply equally to medical providers and personal injury plaintiffs.
Another issue I would have liked to have seen addressed in the opinion is that the expert apparently based her opinion on common insurance billing practices. She opined that doctors were supposed to bill for successive services during the same visit in a certain way and that, if they didn’t, the insurance company would adjust the bill downward. But there is no indication as to whether this doctor was part of the insurance company’s network; e.g. whether it was reasonable to treat this doctor the same as doctors who had signed on to the insurance company billing practices. From the facts I read, my suspicion is that the doctor wasn’t part of the network. And, it makes a difference, the doctor is presumably signing on to a network – and subjecting himself to the requirements that entails – in exchange for some benefit (e.g. getting more patients because he or she is in the network). Sure, the insurance company paid some money — but for all we know from the opinion, that could have been solely a function of the insurer’s contract with the patient; there may not have been any kind of agreement between the doctor and the insurer. And, if that was the case, I think the trial judge would have been correct to strike an expert’s affidavit if it was based on evaluating the interaction between insurers and doctors who did have a contract with one another.
I haven’t the slightest clue of the actual legality of it, but my gut feeling is that by accepting the insurance card as a means to receive payment, the doctor obligated himself to abide by their standard payments and practices. I look at it the same way as accepting a credit card for payment. If you take MasterCard, they are going to ding you for 3%. You cannot then go back after the fact and sue the person who presented the card for that 3%, regardless the fact that you provided a good or service that had a value that included that 3%. It should be done up-front, or not at all. But like I said, it’s just my gut feeling on the matter. I’m battling something similar right now where I was quoted a price for a nonessential medical procedure, and then I was basically billed in excess of 6 times the original quote some 3 months after the surgery. I’ve already told them I’d happily pay them the amount they quoted me, but I suspect I’ll end up in court over this one. And truthfully, I don’t mind. It’s a fun exercise for me.
The credit card is an interesting analogy, but it’s only sometimes applicable. It would apply to an in-network provider. The in-network provider is like the merchant who puts up the “We Take Visa” display on the shop window. The merchant has a contract with Visa; the in-network doctor has a contract with the insurer.
An out-of-network doctor can still get insurance money though. That’s because the insurance company has an obligation to its insured to pay for certain services. So, the insured goes to the out-of-network doctor; the insurance company has to fork out some amount of money to honor its contract with its insured. However – here’s the catch – the doctor, because he has not contract with the insurer, doesn’t necessarily have to accept that amount as payment in full. If the doctor feels like the insurance company is low-balling the value of the service, he can demand the non-discounted rate from the patient.
From time to time, I’ve seen the case where an out-of-network doctor bills the insurer; the insurer sends payment directly to the patient (because there is no network agreement); and the patient pockets the cash. The insurer has honored its agreement with the patient. The insurer has no agreement with the medical provider. The medical provider can look to the patient for the full amount of the bill, but it had no particular legal claim to the insurance money. (If you’re interested, Here (pdf) is a Court of Appeals decision on a case I handled where that was part of the issue.)
I think my attitude on the subject is rooted in the concept that so much medicine is practiced on a very loose sort of “let’s just do the work and THEN worry about how much it costs” arrangement. As a contractor, I sure as hell can’t work on people’s houses like that. I definitely try to work it like that, but seldom does anybody go for it. I guess it begs the question, why exactly do people keep putting up with it? My current dilemma represents my specific line in the sand. I will not be paying a single penny more than what I was quoted. I spent two days price shopping surgeons and facilities, and awarded the job to the lowest bidders. There were no complications and I was in and out of surgery in 34 minutes….11 minutes ahead of schedule and 27 minutes ahead of my allotted OR time. There was absolutely no excuse for the cost to go up, other than the facility learned that I have kickass insurance….so naturally they cranked up the bill once they realized a little good-natured piracy could take place on my tab. My insurance company already paid them well in excess of what I was originally quoted, so they should have no qualms with accepting that as payment in full for the use of their facility for the hour. I’m sure it will be a protracted battle that I will eventually lose, but I don’t give a shit. I’m fighting the good fight on principle. Thanks for the link, I need to absorb as much information as I can before they finally sue me. I’m sure it’s coming.
The problem often comes in the proof. The folks who gave you the quote will likely be unavailable, not remember, or remember things differently now that the services have been provided. Good luck.
Medical billing and insurance issue reminds me of a situation years ago where my wife needed an x ray (minor auto accident). Doctor (small one doctor practice) completes the x-ray and presents the bill. Upon presenting my insurance card, he says: oh insurance let me see the bill and triples the bill he had just handed me. Seems there is a game in there somewhere and we the patients are simply the pawns.