Reducing emergency medical bills: The ultimate health equity solution

You’ve no doubt seen many articles on BenefitsPRO and elsewhere about the crushing impact of medical debt. Some statistics:

• >33% of adults carry medical debt
• 18% of people have medical debt in collections, while…
• …137 million people report problems paying medical bills

Unfortunately, not too much can be done about past bills. But fear of future medical emergency billing is an equal concern, as half of all Americans don’t have enough savings to cover them.

Many of those employees likely work for your employer clients. Indeed, overcoming the threat and fear of medical bankruptcy due to emergencies could be the top health equity issue your clients face, and one of the top employee stressors, as well.

This stress is well-founded. The Emergency Medical Treatment and Active Labor Act of 1986 (EMTALA) forces hospitals to treat emergency visits, admissions and deliveries regardless of ability to pay.  The unintended consequence of EMTALA, as laid out here by Dr. Eric Bricker, is that, “Hospitals extract as much money as possible from employer-sponsored health plans to financially protect them from the risks of EMTALA.”

Consequently, even in-network ER bills typically reach four or sometimes five figures, while emergency hospital bills might possibly have a sixth.

A Solution to high emergency bills

Fortunately, there is a solution that dramatically reduces ER bills. And while I would like to take credit for it, the inspiration comes from the “Battlefield Consent” in The Price We Pay, by Marty Makary MD. Dr. Makary urges people not to sign the provider consent, for exactly the reasons laid out by Dr. Bricker. I simply applied reference-based pricing, as taught by uberbroker David Contorno, to Dr. Makary’s advice, to create a short “Prevent Consent” to use instead of signing the provider form consent:

“Superseding other consents, I consent to responsibility (including insurance) for up to 2x Medicare following receipt of an itemized bill for appropriate treatment coded at the correct Level.”

This wording has evolved over time. The original wording omitted the possibility that someone would sign both the provider consent and the Prevent Consent, for example. Hence the first three words, which are precautionary and proactive. But the legal impact of signing both consents is not yet known. Bills can’t conveniently be repriced to 2x Medicare if they aren’t itemized. Voluntary itemization by providers is apparently the exception, not the rule. And upcoding is on the rise. Hence the last five words.

The provider does not have to actually sign this Prevent Consent to be deemed to agree to it. Simply treating the patient without objection is acceptance of the Prevent Consent.

The provider can affirmatively object to the proposed financial arrangement, but must still treat the patient under EMTALA. That creates a “battlefield consent” situation, with the settlement to be hashed out later. Offering the Prevent Consent gives patients the edge in future negotiations, though, because of the eminently reasonable proposed payment of two times Medicare. We have learned that once Prevent Consent disputes reach the C-Suite, the provider backs off because a judicial finding in favor of the patient could undermine their entire pricing structure.

Rather than teach employees about the Prevent Consent at open enrollment, where no one will be paying attention, you can put this language right on your client’s insurance card, like my own card, featuring an earlier version of the language:

How much is saved?

As mentioned above, hospitals charge private payers a lot for emergencies. Conversely, Medicare ER reimbursement is so low that even 2x Medicare should almost always be in the three figure range in most states. Among other things, Medicare does not allow attending physicians to bill separately, and many of the line items that commercial plans are accustomed to reimbursing separately are not recognized as separate charges.

Here is a screenshot of an itemized in-network bill, repriced to 2x Medicare. Note how many line items are not reimbursed at all, and the $8,696 CT scan is reimbursed at $413.

Expect savings of 50% or more off your negotiated in-network rate, and obviously much more for out-of-network.

To return to the health equity theme above, a 3-figure bill requires only belt-tightening, whereas a 4-figure bill could easily create a financial hardship.

Won’t the No Surprises Act force employees into arbitration?

 The No Surprises Act (NSA) applies only to out-of-network disputes. Even then, in order to be forced into arbitration, you need to sign the provider consent, where the fine print waives your Constitutional right to a trial.

The NSA uses in-network fees as a benchmark, but as we’ve seen, those are vastly higher than 2x Medicare, for emergencies. That is why the NSA language prohibits patients from doing exactly what the Prevent Consent does, which is use Medicare as a benchmark.

Therefore, patients are much better off with the Prevent Consent for both in-network and out-of-network emergency care.

 What are the catches?

Six come to mind.

First, your client must be willing to convince employees to use it. For instance, they might cover the first $500. There is still plenty of savings left over. A complete list of ways to increase employee usage can be found here.

Second, a Prevent Consent doesn’t work on freestanding ERs if owned by non-hospital investors. (EMTALA only applies to entities with a hospital license.)

Third, it must be used correctly. That means not signing the form consent by mistake, a mistake which providers facilitate.

Fourth, triggering EMTALA requires at least a possible real emergency, not something like removing a splinter. (Removing a tick should be a different story, because the longer a tick stays in, the greater the likelihood of disease transmission, and because there are right and wrong ways to remove it.)

Fifth, employees must know their rights. For instance, they need not reveal their Social Security number. And they should have a backup number to call, where an expert is readily available. Quizzify’s Prevent Consent below is an example of teaching rights and offering telephone support.

Finally and most importantly, a provider may “forget” that an employee used this consent, and bill negotiated charges. You must be willing to send “reminders,” followed by increasingly threatening letters.

We know we will win, as eventually these threatening letters get to someone wise enough to back off, because losing in court jeopardizes their entire ER business model.

Likewise, your clients will win 100% of the time, creating probably the biggest-ever victory in their quest for health equity.

Al Lewis is CEO of Quizzify, the leading employee health literacy company. He is also author of two trade-bestselling books on wellness, Why Nobody Believes the Numbers and Cracking Health Costs.