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Senate panel approves legislation to force N.C. hospitals to be clearer in billing and prices

RALEIGH A proposal to make hospital bills more transparent and easy to understand sprinted through a Senate committee Wednesday with bipartisan support.

The Republicans pushing the bill added several suggestions from Attorney General Roy Cooper, a Democrat.

The bill prohibits the most extreme forms of bill collecting: Public hospitals could no longer garnish a patient’s wages, and no hospital or ambulatory surgical center could put a lien on a delinquent patient’s home.

Hospital bills would have to be written in clear, easy-to-understand language. When medical terms or codes are unavoidable, the hospitals would have to provide clear and understandable definitions in large, easy-to-read print.

Sen. Bob Rucho, one of two bill sponsors, said he was baffled by the $26,000 bill for his son’s outpatient surgery that lasted three hours.

“I would need a Ph.D. in economics to understand it,” said Rucho, a Matthews Republican.

North Carolina’s hospitals have been under heightened scrutiny since last April, when the Observer and The News and Observer of Raleigh published a series of stories revealing nonprofit hospitals’ high profits, huge markups on drugs and tough stances against patients struggling to pay their bills. That led to Rucho’s bill and to Cooper’s interest.

A main goal of the bill is to make hospital prices and costs more transparent. Unlike shopping for milk or a used car, patients seldom know ahead of time the price of hospital care and how much they owe. Patients typically find out days or weeks later when the explanation of benefits arrives. This makes it almost impossible to shop for the best price.

The bill would require hospitals to post prices and payments for the 50 most common episodes of care. Hospitals would have to list the prices they charge, the amount paid by an uninsured patient, the amounts paid by Medicare and Medicaid, and the amounts paid by large insurers.

“It’s a great idea,” said Sen. Floyd McKissick, a Durham Democrat. “It’s a bill of rights for the patients.”

Sen. Jeff Tarte praised the goal of transparency but said the bill as written will be impossible to implement. Tarte, a Cornelius Republican, has spent 34 years as a health care consultant and chief information officer for hospitals. He said hospitals will not be able to give apple-to-apple comparisons with “episodes of care,” which begin three days before hospital admission to 30 days after discharge.

“People have been working on transparency for three decades,” Tarte said. “We aren’t going to solve it in a five-page bill.”

Tarte said it would be better to publish the information for specific items, such as lab tests or room charges, or the most common definition of a hospital product, “diagnostic related groups,” which capture about 500 items such as an appendectomy or eye infection.

The bill is also designed to address a practice that has left thousands of patients in the Charlotte region with liens on their homes.

Last year’s investigation found that some hospitals frequently sue uninsured patients and put liens on their homes – a practice that can make it impossible to refinance a home or pass it on to children when the original homeowner dies.

During the five years ending in 2010, North Carolina hospitals filed more than 40,000 lawsuits to collect on bills, the newspapers found. Most of those suits were filed by just two entities: Charlotte-based Carolinas HealthCare System, and Wilkes Regional Medical Center in North Wilkesboro. Interviews suggested that most of those sued lacked insurance, and that many of them were among the working poor.

Hugh Tilson, a lobbyist for the N.C. Hospital Association, told the committee that North Carolina’s hospitals support the goal of transparency. He expressed concerns about depriving the hospitals of tools such as liens or wage garnishment that allow them to collect from patients who have the means to pay but choose not to.

Sen. Fletcher Hartsell tried to preserve the ability of UNC Health Care to collect unpaid bills by seizing money from state tax refunds and lottery earnings, but his amendment was shot down by a fellow Republican.

“Every hospital should be treated the same,” Rucho said. “They shouldn’t be able to use the power of the Department of Revenue, the ultimate collector, to use as a hammer against the patient.”

The bill moves to the Senate Finance Committee and is expected to be voted on by the full Senate late next week.

Neff: 919-829-4516
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