Fighting a medical bill - argue the lowest price on any hospital's pricing sheet is the "reasonable value." 

Posted by Walter KeaneOct 05, 20210 Comments

An affordable way to fight your medical bill: show me the pricing sheets, charge me the lowest.

This blog is for anyone with insurance or without insurance who received any shocking medical bill for a planned or unplanned medical event.  Maybe you're the executor or administrator of a loved one's estate, and the hospital sent some crazy statement.  If you're with the HR department and one of your employees received a surprise medical bill, balance bill, out-of-network bill, read on. If you agreed to a price for medical care in advance, this article probably wouldn't be helpful.  

My passion for this subject comes from a $5,000 balance bill from Lone Peak Hospital in 2020; these are some of the concepts I used to get my account zeroed out.

Here's what we'll discuss:

First, a 2015 Utah Appellate Court case that lays out the legal framework of a medical bill dispute.  The critical point is that only the "reasonable value" of the treatment or services must be paid. It doesn't matter what it says on the bill; it doesn't matter if you were out-of-network.  Whether you have insurance or not, it will not impact the value of medical care in the court's eyes.

Next, we'll go over the 2021 Healthcare Price-Transparency Regulations that became effective January 2021. A New York Times article discussed this regulation and cited the incredible price range for the same procedure at the same hospital. You might have been charged a much higher price for the same service at the same hospital than others are paying. The federal law should allow you to check prices throughout the US.

Finally, we'll argue the new federal price transparency requirement, together with the established case law should empower folks facing a medical bill. Your hospital and all of the hospitals in the area might be required by federal law to give you the pricing sheets. I would argue "reasonable value" is the lowest price on the hospital's pricing sheet or any pricing sheet for hospitals you can find. 

Only "reasonable value" must be paid and not the "price" noted on the medical bill.

The Utah Appellate Court laid out the framework for a medical bill case.  That case concerned a collection agency suing an uninsured person, but the "reasonable value" approach is as practical for the insured as it is for the uninsured.  This approach works:

  • you gave informed consent for the medical procedure;
  • it was a planned or unplanned procedure or treatment;
  • an out-of-network facility or provider was involved; or,
  • prior authorization was required for the treatment or operation.  

In Express Recovery Services Inc., v, Reuling, 2015 UT App 299, the Utah Appellate Court laid out the roadmap to dispute a medical bill.  Reuling was admitted into the hospital after a car accident. After trying to collect from Reuling, the hospital assigned the account to a collection agency that sued. 

Reuling and the hospital didn't have a contract.  How could they?  Reuling had arrived by ambulance.  However, the parties agreed that an "implied contract" existed, and the law required Reuling to pay the "reasonable value" of the medical services.

In determining the reasonable value, the trial court considered the testimony of the supervisor hospital's collections office regarding the value of the services; Rueling got a charge eliminated, but he essentially lost.  The hospital prevailed because the court relied on the collection staff's opinion of value. 

Rueling would have benefited from other evidence of value.  Maybe an internal hospital pricing sheet listing an insanely wide range of "prices" for the same procedure or treatment in the same hospital?

Hospitals are now required to post all the "prices" for the same medical treatment or procedure!  That means you should be able to review the pricing sheet, pick the lowest price, and argue that it is the "reasonable value." You could also search the entire US for the lowest price possible.  

The 2021 CMS Healthcare Price-Transparency Regulations requires disclosure of the lowest price for medical procedures.

Starting January 2021, hospitals were required to publish the prices for medical services. The wide variety of fees charged for the same medical procedure or service can be shocking. Sara Kliff and Josh Katz explained in "Hospitals and Insurers Didn't Want You to See These Prices. Here's Why," New York Times, 22 Aug. 2021, the cost range for an MRI was $262 to $2,455 at a Florida hospital. This means it might be possible to reduce a medical bill by roughly 90%.  A Milwaukee hospital charges a range of $1,093 to $4,029 for an MRI.

Rueling was charged for "[MRI] imagining." If the hospital disclosed that some people pay $2,455 while others pay $262, Rueling would argue the reasonable cost was the lowest figure.  He could do this for every procedure or treatment he received.  But it doesn't stop there.  Rueling could get the price lists from other hospitals from anywhere in the US.  Let the hospital explain why they need to charge more than the absolute lowest cost nationally.

One of the most expensive aspects of litigation is the discovery process.  "Discovery" occurs where the parties serve written questions on each other, have depositions, review documents, seek documents from third parties, etc. If a hospital is already required to produce this information by federal law, discovery got a lot cheaper.

Call the hospital and demand the pricing sheet for the procedures and treatment you received.  Then get in touch with other hospitals for their pricing sheets. 

Remember, if you have insurance, your insurance may have paid something.  Calculate the entire medical bill using the lowest prices charged for the procedure or treatment.  Compare that amount to what the insurance already paid. You might be able to argue the hospital owes you money.

Conclusion: A new approach to fighting medical bills

The "new approach" is reviewing the hospital's pricing sheet (and any other hospitals' pricing sheets you can get your hands on), picking the lowest price, and arguing it represents "reasonable value."  

In my case, Lone Peak Hospital probably zeroed to my bill because they realized that when all of the lowest prices were applied to all the medical services, my insurance had paid them more than enough.