Patient advocacy expert: Hospital price transparency may change debt collection practices

CMS' price transparency rule that went into effect Jan. 1 could make it easier for patients to reduce their medical debts in court, patient advocacy expert Jackson Williams wrote in a Feb. 11 Health Affairs article.

Mr. Williams, vice president of public policy at Dialysis Patient Citizens, worked on healthcare quality and payment reform at CMS from 2010 to 2013. 

He said that hospitals often demand uninsured or out-of-network patients pay for services based on the list price on the hospital's chargemaster, but they are only allowed to charge for the market value of services under the legal doctrine of quantum meruit. 

Before the price transparency rule, it was difficult for patients to prove what the negotiated prices were in court. Patients would have to locate claims data showing paid amounts from a source like the Health Care Cost Institute or Truven MarketScan and then authenticate the data by having a hospital representative confirm the data was accurately collected by the source.

Now that hospitals have been ordered to disclose their prices, courts can take judicial notice of a hospital's price disclosure as a verifiable and federally mandated report. 

"What this means is that if a patient contests a debt collection lawsuit, which can be done fairly easily by filing a form with the court, the patient can likely whittle down the amount of the debt substantially by showing the judge the negotiated prices on the hospital’s website," Mr. Williams wrote.

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