Supreme Court Orders Hospital To Justify Inflated ER Bills

Badly Needed Victory for Injured Texans.

The Texas Supreme Court has ruled in favor of an uninsured woman who challenged her whopping hospital bill of $11,000.

The opinion written by Debra Lehrmann, formerly a district court judge in Fort Worth, held that hospitals must disclose the lower rates that are given to people covered by health insurance or government assistance.

The case

Crystal Roberts was injured in a car wreck in Houston in 2015 and taken to North Cypress Medical Center. After x-rays, CT scans, and routine care she was discharged.

Ms. Robert’s lawyer negotiated a settlement of the personal injury case for $17,380. He then requested that the hospital reduce its huge bill.

After the hospital refused to sufficiently reduce its charges, he filed for a declaratory judgment to invalidate the hospital’s lien. He requested that the trial court find that the bill exceeded the “reasonable and regular rate” required by the hospital lien statute.

The hospital counterclaimed for $8,278.

The plaintiff’s attorney requested that the hospital produce documents showing how much it reduced its rates for other patients who were covered by Aetna, Blue Cross, Medicare, and Medicaid.

The hospital refused to comply and moved for a protective order, claiming that these amounts were irrelevant and confidential. It also filed for summary judgment, “death penalty” sanctions, and $20,000 for attorney’s fees.

The trial court ordered that the hospital produce the necessary data.

Instead of complying, the hospital filed for a writ of mandamus. The appeals court denied the writ and the appeal to the Supreme Court followed.

The Supreme Court held that the billing information was relevant to the plaintiff’s case so she could prove that her rate was excessive and ordered it produced.

How can these inflated charges happen?

Hospitals make a lot of money. The top 84 nonprofit hospitals in a recent year made $35 billion.

So when an ER hears someone has been injured in an automobile accident and rates are doubled or even tripled, it is shocking. We at Berenson Injury Law routinely see these ridiculous bills and do everything possible to reduce them to make our clients more money.

The Court observed that “hospitals have incentive to continue raising ‘chargemaster prices’ because of the positive correlation between those prices and hospital revenue.” In other words, the rate does not have to be reasonable. It just has to raise as much money as possible.

And to add an element of fraud to this one-sided billing process, the injured person is never told what that rate is ahead of time — as if he could choose between hospitals as he is being rushed from a crash scene. Worse, the uninsured patients — those who presumably have less money – are gouged the most.

Imagine that you wanted to buy a new car or go out to dinner and the dealer or restaurant refused to tell you the price until it knew how much you could afford to spend.

Legal commentators have described these hospital’s chargemaster rates as “insanity” and have written articles about “the precarious pricing system for hospital services.”

The future of excessive hospital billing

Public and private hospitals, freestanding ERs, and medical clinics have been fighting health insurance companies across the country to reduce their rates.

Some states, including California, require hospitals to disclose in advance what their rates are. Texas does not — but should.

The Roberts case is far from over. The hospital may request a rehearing before the Supreme Court. If the requested billing information is eventually produced, it is unknown what the outcome of the lawsuit will be. The hospital could require a nondisclosure agreement. Other cases and varying opinions may follow.

Furthermore, the Supreme Court suggested that hospitals can request that the cases be sealed so that other injured people cannot learn what the secret rates are.

But the hospitals may now begin to reduce their billing rates and work with personal injury lawyers who request they cut their bills to help their clients get a larger share of the final recovery after a car crash.

This is a serious problem here because there are four and one-half million Texans who have no health insurance.

Every one agrees that health care costs and insurance rates are out of control. But hardly anyone realizes how the medical billing process can be a nightmare as I discussed on Tuesday and have in the past.

Congratulations to attorney James Amaro for giving lawyers for injured people a new tool to get them the money they deserve.

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