Surprise Medical Bills: How to Protect Patients and Make Care More Affordable
We note at the outset that surprise bills are not a problem in other markets. When you take your car to a body shop after an accident, the mechanic who paints your door panel doesn’t send you an inflated, separate bill from the body shop—and then balance bill you when your insurance refuses to pay it in full. That isn’t because we have an elaborate system of arbitration for car door repairs. Nor is it because the government provides rate-setting for auto repairs, with different levels of payment for door panels than bumpers, and higher rates for fixing more expensive cars and trucks. Instead, there are no surprise bills from body shops because the market demands all-in pricing. Body shops respond by bundling all the necessary services into a single, all-in price and then billing for everything themselves. Why can body shops do what hospitals can’t? In this Article, we argue that policymakers can use contract-forcing regulation to make hospitals behave more like body shops—and prevent the majority of surprise bills.
Part I provides background on surprise medical bills, including anecdotal com-plaints and empirical evidence regarding their prevalence. Part II highlights the failure of PPACA to effectively address the problem and describes the efforts states have made—and pending efforts at the federal level—to fix the problem, along with the associated trade-offs. Part III outlines an innovative strategy for (mostly) fixing the problem of surprise medical bills and considers the implications of this sorry episode for the future of health law and policy.