Can they freaking DO that?!?

Dan: Miriam visited a fertility clinic a couple of years ago, in Washington, DC, where she lives, and she got some tests done. She was lucky. Her insurance actually covered fertility stuff. So she got the bill, and her share was like thirty bucks. She paid it.

Then this other envelope arrives. From some place she never heard of, NOT the fertility clinic. Or anyplace else she’s ever been. And it’s hot pink. She thinks it looks fake. Like it reminds her of those envelopes triple-A sends you, unsolicited, with a membership card.

Miriam: And it’s like “You’re already enrolled. You just need to pay this…”

Weird association, but OK. It says it’s a bill, and they want 35 bucks for some lab work. And perhaps unwisely, Miriam ignores it. OK, uh definitely unwisely.

And there are a couple of follow-ups, also in hot-pink envelopes. And on the one hand, Miriam looks more closely— and they are connected to her visit to the fertility clinic.

On the other hand, the follow-ups say this OTHER thing. They say, Hey, pay up now, or this thing’s going up. WAY up. Up to about thirteen hundred bucks. From thirty-five.

Miriam: Which was so outrageous that I thought this is definitely bullshit. Sorry, can I say that?

DAN: Yes! Absolutely. Yeah.

So, Miriam does a dumb thing and ignores it. And a follow-up, and then IN SEPTEMBER she gets a note from a collections agency. They want that thirteen hundred dollars.

And Can They freaking DO That?

Can some lab send you a bill for 35 bucks out of nowhere, and then be like: Hey, better pay now while we’re in a good mood. Otherwise, it’s gonna be THIRTEEN HUNDRED DOLLARS.

Is that even LEGAL?

This is An Arm and a Leg, a show about the cost of health care. I’m Dan Weissmann.

We are focused this season on self-defense, and we wanted to tackle a story like this, because as consumers, WE HAVE NO IDEA.

I mean, I get a bill from the electric company, well, for one thing, it’s not a surprise. I’ve been running the lights.

And it’s the same rates as last month. And everybody is paying basically the same rates as me. Like whatever. I owe this.

But a hot-pink envelope from some ancillary lab? I mean I get an electric bill from my utility company. I don’t also get one from the coal mine, or the nuclear power plant.

AND if you get a bill from some lab, and then a follow up saying they’re going to take you for thirteen hundred. You’d be like, Well, maybe they CAN freaking do that.

I mean how would you even know? Who would you even ask?

Well now, you can ask ME. And I’ll go find out.

This whole thing happened to Miriam a couple years ago.

She ended up settling with the collections agency for like two hundred and seventeen dollars. Which was a sixth of what they were asking for. But it was also SIX times that original thirty-five dollar charge.

It STILL BUGS HER. Like was that even legal, what happened there? It is so messed up.

So she wrote to me, and I was like: I REALLY want to figure this out.

Miriam: Hello, this is Miriam.

DAN: Hey, Miriam. Dan Weisman. How are ya?

Miriam: Good. How are you?

DAN I’m good. Is this still a good time for you?

MIriam: Yes.

I made some calls. And I FOUND OUT SOME STUFF.

And I’m not going to give away the end, but I think we’re looking at some SUPER interesting possibilities for consumer self-defense. That would make you feel PRET-TY darn empowered.

And … here’s a shocker: There’s stuff that’ll probably make you pretty mad.

You ready? Ok.

So when I talked to Miriam. She actually had a theory about what I might find:

MB: It might just be illegal to have such a big jump from what the original copay was to what it ended up being after I was late.

DW: Okay. Okay.

I was off. I called up a bunch of health-policy nerds… and the part of the story that jumped out at them was that maybe she should not have gotten that 35 dollar charge in the first place. This sounded to them like a story about Surprise Bills.

… and we’re gonna end up going kinda deep on this idea of Surprise Bills.

It’s going to teach us a LOT about why the question

Can They freaking Do That

can get so complicated. And exploring this is probably going to make you kind of mad.

Music

A surprise bill is when you go someplace that’s supposed to be covered by your insurance— and then you get a bill from some OTHER place — a place maybe you’ve never heard of — that doesn’t take your insurance.

Like, say you went to a fertility clinic, and they take your insurance, but they send out to some other lab for a certain test. And that lab sends out bills in pink envelopes, and they DON’T take your insurance.

And that means they do NOT have a negotiated rate for someone with your insurance. They’re just going to charge you whatever they want. Maybe thirty-five bucks. Maybe 1300.

Some states, like New York and California, have passed laws to protect patients against surprise bills.

So if you live in one of those states and you get a weird bill in a pink envelope from some lab you never heard of— there’s someone you can call.

So, for instance, one of the first people I called was a reporter named Michelle Andrews— she’s written about insurance for our pals at Kaiser Health News. And she lives in New York, and she had just had this experience.

MICHELLE: My doctor had sent off my test to this lab that was out of my network. I had no idea they were – so then I get this bill for $500. I’m like, what? Huh? I have no idea. So but I live in New York where we have a surprise billing law and so I just called up and I said this isn’t my problem. And sure enough it wasn’t.

I tell Miriam about Michelle’s experience, and she’s like

Miriam: Interesting.

Dan: Yeah. Right.

Miriam: Yes. I can see if, if I were in a state like that, I would appreciate that law.

Right. Remember, Miriam lives in DC, so she does not get the benefit of a Surprise Billing law. I tell her more states are trying to pass these kinds of laws.

MIRIAM: Oh, how do I support such? How can I advocate for such legislation?

Dan: Actually there’s another wrinkle here which means that you could live in New York and have this taken care of except that you couldn’t, you couldn’t.

MIRIAM: Hmm, why not?

DAN: Well, it’s because…

OK, the wrinkles get very geeky here. But here’s the deal: Those laws against surprise billing are state laws. They protect people with “regular” health insurance— that is what is regulated by the states.

But most people who get their health coverage from work— their health coverage IS NOT regular insurance.

Their employers are doing some form of what’s called “self-insurance.”

And if your employer does this— and most big employers do— you might never know. Self insurance looks like regular insurance: You get an insurance card, and it has a name like Cigna or Blue Cross on it.

But it works differently on the back-end.

With “self-insurance,” employers hire those companies to do the OTHER stuff that’s part of the health-insurance business: Negotiate rates with doctors and providers, print up insurance cards, keep track of all the claims that come in.

But when it’s time to pay a claim— pay a doctor, or a hospital, or a lab— it’s the employer that actually pays it, themself. That’s the self in self-insurance.

I run all this by Miriam and she’s like:

MIRIAM: Huh.

MIRIAM: So my monthly, what’s being taken out of my paycheck for health insurance is going to my employer and they’re paying the doctors not the insurer?

DAN: Yeah, it’s it’s weird. It’s weird. But that’s how it works.

If you’re curious about whether your employer does this, you could ask HR.

And here’s why we’ve gone down this weird self-insurance rabbit hole: Those “self-insured” plans— the ones that most workers are in? They’re NOT regulated by the states.

They are regulated by the FEDERAL government.

MCANDREW: And federal law doesn’t have protection against surprise medical bills

This is Claire McAndrew and she works for a non-profit advocacy group called Families Working Together. Health care policy is their thing.

MCANDREW: So really the only way to make sure that everybody’s protected is for Congress to take action.

Pushing Congress to take that kind of action is her job. Specifically pushing for federal protections against surprise bills has been a big focus in the last year.

And for a while, it was actually going super, super well. Bills she was pushing got passed by committees in both the Democratically-controlled House AND the Republican-controlled Senate.

That happened over the summer.

Claire: But then over the August recess we saw an attack campaign trying to scare Congress from moving forward

AD: Doctor shortages, hospital closures. Tell Senator Gardner to choose patients. And vote “no.”

And at first, nobody could figure out who was actually paying for those ads.

CLAIRE: They were advertisements under obscure names. The main one is called doctor-patient unity.

AD: Paid for by Doctor-Patient Unity

CLAIRE: So doctor patient unity comes out with these ads and nobody knows who they are. No one’s ever heard of them, and they’re running these big TV ads during prime television slots.

Claire says they spent 30 million bucks.

And so it actually took investigative journalism to find the paper trail and figure out who was behind these ads. And it took you know weeks of these ads running before anyone could connect the dots.

DAN: And where did that trail of dots lead?

CLAIRE: It actually led back to two private equity companies that own the most prominent physician staffing companies in the nation

Yeah, let’s unpack: Private equity companies— that’s hedge funds, the kind that look for huge returns.

And they own… physician staffing companies?

These are companies that supply certain kinds of specialists to lots of hospitals — ER doctors, anesthesiologists.

The docs work for the companies, not the hospitals.

And the physician staffing companies tell hospitals: Hey, we’re gonna make sure you’ve always got somebody. An ER doc calls in sick? Not your problem. Scheduling around vacations, whatever— none of that. We’ve got you.

Tell you what— heh, heh, heh, heh — we’ll even do our own billing.

Yeah, because these medical staffing companies DON’T TAKE ANYBODY’S INSURANCE.

And that means they charge whatever they want. So…

You go to an ER, or you have surgery and an anesthesiologist is involved— and say they work for one of these companies.

SURPRISE! You’re getting a separate bill and it could be super, super high.

CLAIRE: Guess what? Private equity is actually making a lot of money off of surprise out of network bills.

And they’re not just doing this with doctors. Also certain services — stuff LIKE E.R. docs, where you, the patient, aren’t choosing your own provider. So, air ambulances— companies that helicopter you to an ER from out in the middle of nowhere? They generate HUGE surprise bills, and profits for private equity.

Claire: Surprise billing is not an accident. It is a business model for private equity companies.

To those companies, surprise bills are like a license to print money.

… and laws against surprise bills would threaten that license.

CLAIRE: So they’ve actually invested over $30 million dollars in attack ad campaigns to stop Congress from moving forward on protecting consumers and banning surprise bills.

So I ran all this down for Miriam. Private equity firms are behind a lot of these giant surprise bills— ER docs, anesthesiologists, air ambulances.

And Miriam was like

Miriam: That makes me so angry. So just the helicopter thing alone, you pay monthly into insurance. And the reason I do as like a healthy young person is mainly just in case something catastrophic happens. And then you’re telling me that one of the top responses to a catastrophe wouldn’t be covered

I was like: Pretty much. Or less-unusual things, right? Like an anesthesiologist for any surgery or childbirth. Or the doc you might see in the ER. Or… a lab.

Miriam: There’s just no way for a normal person to figure all this out.

Yup. Exactly.

And honestly, one of the things I found out is: It is not just normal people who have a hard time figuring all this stuff out.

I mean, I think one of the reason that the health-policy nerds I called wanted to talk about surprise billing is: as messy and complicated as it is, with this patchwork of a few state laws —

It is one of the few areas where the rules are kind of clear. In a few states, for people with certain kinds of insurance, they CAN’T do that. There’s someone you can call.

I also called a guy who helps consumers challenge crazy medical bills, like for a living. Braden Pan runs a company called Resolve Medical Bills. There’s different companies that do this, his is one.

I described Miriam’s story to him— the pink envelope, the fine print that was like

DAN: This is for a charge of $1,287 for which you get a great discount and we’ll take $35 from you. If you pay by date X

BRADEN: Wow. Okay.

It’s like he’s kind of impressed by how brazen it is.

I asked him: Did Miriam have some legal rights here?

BRADEN: I’m going to tell you right now that I’m not a lawyer.

BRADEN: Now I can tell you that the, the idea of what hospitals or clinics can charge for services: that hasn’t been settled,

In other words, he thought you’d need a lawyer if you wanted to fight it. And you don’t know how it’s going to come out.

BRADEN: What might actually be going on with this company is they know this, they know that there’s confusion out there about this, uh, that you need a lawyer to actually figure it out whether or not someone can do this, and for 1000 bucks it’s not worth it to hire a lawyer to tell you because they’re going to charge you 1200 bucks just to tell you whether or not, they can do this

DAN: Right, right, right.

So, himself? Braden Pan wasn’t so sure there were good answers here.

BUT: He pointed me to a couple of OTHER people— and THEY actually had some VERY hopeful answers. Some serious self-defense tools. You might wanna grab a pen.

We’ll have THAT— right after this.

BREAK

This season of An Arm and a Leg is a co-production of Public Road Productions and Kaiser Health News, a non-profit newsroom that covers health care in America. Kaiser Health News is NOT affiliated with the giant health care provider Kaiser Permanente. We’ll have a little more on Kaiser Health News at the end of this episode.

So here’s where we meet the folks who are going to give us our big, strong weapons for fighting off totally unreasonable bills

LBB: My name is Lisa Barry Blackstock. and I have been a patient advocate since 1990

That’s like almost thirty years.

And I asked her, is there anything you can do in a situation like this? When you’re getting hit up for 1300 bucks for some stupid lab test?

And she was like: well, yeah. You could take them to small claims court.

LBB: and you don’t have to be a lawyer to do that.

I was like, wait— you’ve done this?

LBB: Oh, I’ve lost count. I can’t tell you how many times I’ve done it, and in how many different counties.

DW: Huh. So it works.

LBB: Oh, it works. It’s worked for me.

She says it works every. Single. Time.

And here’s something I learned in this conversation that I absolutely had not known:

When you go to court, it does not have to be to make somebody else give you money.

You can go to court and say: Judge, this lab says I owe them 1300 bucks. But I have researched it, and 35 bucks is fair. I’m offering them 35. Would you please order them to take 35?

It takes a plan to do this, and it takes work:

LBB: You have to demonstrate in writing that you have made a good faith effort to resolve this to the your best ability and that you’ve been unable to. And that’s why you’re asking the court to intervene.

DAN: And so you’re asking the court basically to approve a settlement offer that you’re making.

LBB: Correct.

That’s what Lisa Berry Blackstock says she does.

There’s some serious homework involved. If you grabbed a pen earlier, here’s where you start taking notes.

First, Lisa says you call whoever’s sending the bill and make them give you the billing codes for everything on the bill. Itemized.

Each one has a five-digit code called a CPT code. CPT. And honestly, this sounds like it could be the hardest part. You’ve gotta get them to cough up this information. You have a right to it, but getting it?

Once you’ve got that, YOU figure out what a fair price is in your area. And there are a couple of websites that actually can help you do this:

Lisa uses one from a group called Fair Health— the site is fairhealth consumer dot org. You put in your zip code and a five-digit medical-billing code, they will tell you what the going rates are in your area.

LBB: And that’s my basis of my offer. It’s fair. I mean I have independently verified information. It’s not a number that I’ve made up and it’s not like you’re trying to rip people off

Then you write to whoever’s billing you— use certified mail, so you get a signed receipt, you can prove they got it— and you say: Here’s what I’m offering. Here is how I determined this number. I wanna hear from you by date X that you will accept it. Otherwise…

LBB: I will be filing in small claims against you and you can expect to receive a notice

DW: And you’re saying generally if they get that there’ll be like, okay, I’ll take it. Is that right?

LBB: Yes. I mean look they don’t understand anything with billing other than raking people over the coals because that’s what is generally allowed across the country.

She says, a lot of the time, just sending the letter is enough. But sometimes she actually has to file.

LBB: Now once I’ve filed and they’ve been served, Oh then they’re falling all over themselves to make it go away

Because look: They’re used to sitting in an office, sending out pieces of paper saying “Send us 13 hundred bucks or we’ll ruin your credit” — and getting 13 hundred bucks!

Or maybe getting a phone call and allowing themselves to be talked down to 200.

Without leaving their desk.

They’ve gotta send somebody TO COURT? That person who’d go to court could make more money by just accepting THIS offer and moving on to the next sucker. Especially because, according to Lisa Berry Black, they’d probably lose in court anyway.

Now, THIS was cool. But I didn’t just want to take one person’s word for it. I found somebody else who had actually tried this thing. Somebody with a pretty good credential.

ROBERTSON: My name’s Christopher Robertson. I’m a professor and associate Dean at the James D. Rogers College of Law at the University of Arizona.

I asked him: You can make these people accept a fair offer?

And he’s like: Yeah, duh.

ROBERTSON: You know basic contract law — you know, the stuff we teach to first year law students every day — purports to just make this a non problem. Of course you don’t have to pay a number that the other side just invented. Um, you know this is shooting fish in a barrel from a, from a contract law perspective.

WHOA, BABY!

The deal is, you see a doc anywhere, you sign something. In the business, they call it Consent to Treat.

It says: Yeah, examine me, poke, prod, whatever.

AND it says: I’m gonna give you my insurance info. And whatever the insurance doesn’t pay, I’ll pay.

This thing I’m signing doesn’t say HOW MUCH I’ll pay— cause nobody knows exactly what’s gonna happen at the doctor’s office or the ER or wherever, anyway.

I’ve got a stomachache. Maybe I ate something weird. Maybe I have an ulcer.

So, Robertson says, what I’m signing is what lawyers call an Open Price contract.

ROBERTSON: You know normally a contract has a price in it, right? So if you want to go buy a car, your contract to buy the car has a price that’s true of a washing machine or a or a house. But when there is no price in the contract, it’s called an open price contract.

The courts do not treat an open price contract as a blank check.

If the court is going to be called upon to enforce the contract to force someone to pay something, then the court has to figure out, well, what, what amount should I force them to pay? It can’t be just what one side says later

In other words, courts would say: an open-price contract, like your agreement with a medical provider, does NOT mean the other side just gets to bill you for WHATEVER THEY WANT.

And Miriam’s case is special. It’s got this OTHER wrinkle.

Which is, basically: The lab said the price was 35 bucks.

But if you’re late it’s 1300.

That’s why I was so interested in this case— and Robertson says Miriam has the law on her side there too.

He says this involves something ELSE they teach first year law students—

ROBERTSON: literally on very first day of contract law

When you breach a contract, courts don’t treat THAT like a blank check either.

And a late fee it’s like a penalty for breaching a contract: Contract says you pay on date x.

Miriam breached her contract by not paying on time.

But Chris Robertson says there’s a limit to what that penalty can be. And it’s gotta have some relationship to what the breach actually cost the lab.

ROBERTSON: So that’s the second reason this strategy is completely legally frivolous. To take a 35 dollar charge and convert it into a thousand-dollar plus…

ROBERTSON: So yeah, they didn’t get their $35 check in June when they wanted it. They might get it in July. Well that doesn’t cost them $1,000. So it can’t be $1,000.

DAN: Even if they don’t get it, it’s now September and they haven’t gotten it. It’s still not costing them $1,000.

ROBERTSON: Exactly.

So, he’s like: Yeah. Line it up. Small claims court? That sort of thing can work.

I can barely believe it’s this easy

DAN: Well that’s pretty awesome. That’s pretty good. Uh, why don’t we do that more often?

ROBERTSON:

I mean, frankly, we shouldn’t have to, we need a systematic solution to this. You know we all have day jobs. You know? Frankly a lot of people who are dealing with medical bills, surprise, surprise, are sick. Right? Um, so they’re busy trying to get, well, I, you know, they’re trying to fight their own battles and so, you know, waging their own legal battle is, is, is a huge distraction and requires a level of attention to detail that not everyone has or should be expected to have. So that’s why I really need more systematic solutions.

So, Miriam might’ve had some options. But small claims court? it’s not exactly a blanket solution.

Especially because, there’s also the problem of scale. I mean, it’s one thing if you’ve got a lab hocking you for a thousand bucks. What if you’ve got a whole system of hospitals trying to rake untold numbers of patients over the coals for crazy amounts?

Then you’re not in small claims court anymore.

Christopher Robertson has been there — like, he’s gotten involved in lawsuits trying to stop hospitals from doing that sort of thing— and he says it is not pretty.

Robertson: It’s the utter, utter breakdown of law. I mean, when we tried to challenge these practices by hospitals, um, we bumped up into courts insisting that for every single charge we affirmatively prove that the amount and they made up is unreasonable. But proving that requires, you know, experts and accounting and economics, you could spend tens of thousands of dollars litigating every single one of these thousand dollar charges. And so that’s why you really do need either, um, class action or a more affirmative, you know, regulatory system to police this, this bad behavior.

But in an individual situation, like Miriam’s, where she’s actually healthy. She’s only got one charge to fight off.

Yeah, you can fight back. Get your evidence together. Find out the itemized billing codes, and use a web site like fairhealth consumer dot org to figure out what a reasonable price would be.

Make an offer. Put it in writing. Send it certified mail. Give ’em a deadline to accept your offer— or else you tell ’em you’ll file in small claims court. And then, if that doesn’t make ’em play ball, actually do it.

I ran all this down for Miriam, and she was like:

Miriam: I wish I had known. That’s my main thing. I wish I had known that I had these other options. I would have totally gotten a letter. Like if even if I needed to notarize a letter, get it sent certified mail, I’m going to take you to small claims court. Okay. Maybe I’ll give you 50 bucks. That’s my, that’s my offer. I wish I had done that.

YEP. And: I learned more self-defense tips from people like Christopher Robertson than we had room for in this story.

You better believe we’re going to keep digging on this kind of stuff. And we’re going to keep sharing more of it.

But like Christopher Robertson says, going one-on-one— that’s not always going to work.

Sometimes you’re sick. You don’t have this kind of moxie. And in that kind of situation, a lot of the time the bills are not the kind you can settle in small-claims court.

And sometimes, the bad guys? They are really bad, and they are really organized.

Next time on An Arm and a Leg: We’re gonna go there— and we’re gonna meet somebody who got the bad guys to freaking CAVE in. At. Scale.

Because here’s the deal: Siccing a collection agency on you, that’s not the worst thing a provider can do. Some hospitals? They don’t get the money they want?

They SUE their patients. They tell the courts, yeah, I wanna garnish this person’s wages. Put a lien on their house.

Journalist Wendi Thomas figured out that the biggest hospital in her city — Methodist University Hospital in Memphis— was suing thousands of patients. Including its own badly-paid employees.

I asked her how she figured out the part about the employees. She said all she had to do was show up in court.

Wendi: Oh, you saw them, there in their scrubs. You know, I could see their Methodist, badge clipped to the front of their uniforms.

She took her time, got all the evidence together, published it. And it WORKED.

So, next time on An Arm and a Leg, we’re gonna look evil in the face. And evil? It’s gonna blink.

This is An Arm and a Leg— voted the number-two TRUE CRIME podcast of the year. That’s right, baby. Because not all crimes are against the law.

We’ve got big plans for next year— We want to do more episodes, for one thing.

And: I’m thinking we should put together some of this self-defense stuff in a BOOK. And I want to do some live events: Building an empowered community means coming together in person, hearing each other’s stories and enjoying each other’s company. We want to take this show on the road.

We’re gonna need your help. Hundreds of people have already signed up to support this show financially on Patreon. And I think we can get to five hundred by the end of the year. That’s going to take us pretty far toward our goal.

And guess what? If you know somebody who can do MORE— somebody who’s looking for a place to make a tax-deductible donation before the end of the year? We can help that person out.

You’ll find links to both options — patreon AND a way to make a tax-deductible donation — at arm and a leg show dot com, slash, support.

Check it out, and I’ll see you here next time.

Till then… take care of yourself.

This episode was produced by me, Dan Weissmann. Our editor is Ann Heppermann, our consulting managing producer is Daisy Rosario. Our music is by Dave Winer and Blue Dot Sessions. Adam Raymonda is our audio wizard.

This season of An Arm and a Leg is a co-production with Kaiser Health News— that’s a non-profit news service about health care in America that’s an editorially-independent program of the Kaiser Family Foundation.

Kaiser Health News is NOT affiliated with Kaiser Permanente, the big health care provider— they share an ancestor, and that’s all. This guy Henry J. Kaiser— he had his hands in LOT of different stuff. It’s a fun story— you can check it out at arm and a leg show dot com, slash Kaiser

Diane Webber is National Editor for Broadcast and Taunya English is Senior Editor for Broadcast Innovation at Kaiser Health News— they are editorial liaisons to this show and they’re great..

Special thanks this week to Lynn Quincy, Dena Mendolsohn, Jennifer Bosco, and Jason Lowe.

Finally, thank you to some of our new backers on Patreon— I could not make this show without you. Pledge two bucks a month or more, you get a shout-out right here. Thanks this week to:

Michael Choy, Cara Fedick

Ryan Kraemer, David Gardner, Marla Clayman

Martha Bayne, Chivos Machones Verdaderos, Jennifer R. Farrell,

James Collins, Christy Uchida, Kelly Maney

Joe Beatty and Shelby Bates.

Thank you so much. Whenever I see that you’ve signed up to support the show like this, my heart just goes like

DAN: Well that’s pretty awesome. That’s pretty good. Uh, why don’t we do that more often?

(DING!)