May 27, 2020 1:18 PM

$50K medical bill shows you don't always owe what you're charged

Posted May 27, 2020 1:18 PM
Alvin Letner was injured, drugged and confused when he signed papers assuming financial responsibility for what later turned out to be a nearly $50,000 medical bill. Celia Llopis-Jepsen / Kansas News Service
Alvin Letner was injured, drugged and confused when he signed papers assuming financial responsibility for what later turned out to be a nearly $50,000 medical bill. Celia Llopis-Jepsen / Kansas News Service

By CELIA LLOPIS-JEPSEN
Kansas News Service

PITTSBURG — Alvin Letner doesn’t remember signing the form where he promises to pay a medical bill of nearly $50,000 he hadn’t yet seen.

Much of that day in July 2019 is a blank for him. A dog ran onto the highway as he and other motorcyclists on a veterans fundraiser rode by. It knocked him off his antique BMW, breaking his neck, three ribs and an elbow.

The air ambulance charge came later by mail: $48,934.27 for the 20-minute, 30-mile flight that whisked the retired high school teacher from the accident scene in southeast Kansas to Freeman Hospital West in Joplin, Missouri.

Legal experts say patients often get sky-high bills for emergency health care, even though they are only obligated to pay market value. Moreover, they say, financial paperwork handed to patients for their signature while they’re traumatized, drugged or confused wouldn’t hold up in a court of law.

Yet, they concede, making a potentially financially devastating medical bill go away can be tricky, even if you suspect it’s excessive.

Letner and his wife, Diane, have health insurance, but the air ambulance company and insurer disagreed dramatically on the flight’s value. Current federal law lets the out-of-network biller pursue the Letners directly to make up the difference: in this case, more than $40,000.

“When I came home from the hospital, I was instantly old,” said Letner, whose recovery has been slow. “I don’t want the instant debt.”

This story is part of the Kansas News Service series, Bills of Health. Do you have a medical bill from Kansas that you want to share with a reporter? Email [email protected]

After much worrying, the Letners appear to be in the clear. In an interview with the Kansas News Service, an executive at the national, private-equity owned air ambulance firm said his company never planned to collect so much from the Letners.

“The idea of trying to collect tens of thousands of dollars from individuals is really stupid,” said Chris Myers, vice president of reimbursement for Air Methods. “Because they don’t have the money to pay it.”

However, the company gave the Letners paperwork at least twice indicating patients are on the hook for what their insurance won’t pay.

“At no time,” Diane Letner said, “did they ever indicate that we would not be liable for the remaining bills.”

'No overarching authority'

In February, seven months after the accident, Alvin Letner could finally lift enough weight to return to his love of pottery making — an outlet that helps clear his mind.

“You wake up in the middle of the night thinking about this,” he said recently, sitting in the house he built mostly himself over the decades he’s lived there. “We’ve been paying all this insurance money all these years. We trust in the system.”

Air ambulance companies face growing scrutiny and political pressure over their prices, which have risen sharply in recent years.

The average charge for an Air Methods ride, for example, jumped from $13,000 to $49,800 within a decade, federal auditors wrote in a 2017 report. That’s 283%.

Congress has created a panel to find solutions. States sick of waiting have passed their own measures, only to be rebuffed by courts that conclude federal law blocks states from regulating the rates that aircraft charge.

“We have literally tried everything,” said Jon Godfread, insurance commissioner for North Dakota and a member of the new panel. His state lost in court over its law to steer business toward air ambulances that contract with more insurers to keep prices down. “There is no overarching authority (to) prevent these kinds of egregious bills.”

Air Methods, which also has a seat on the panel, says it bills privately insured patients more to make up for Medicare, Medicaid and uninsured patients. It says those three groups comprise most of its business, and that it loses money on them.

Still, experts in health law say the principles of contract law obligate patients like Letner only to pay the market value of health care. That’s because they haven’t signed a contract to buy a specific treatment or procedure for a specific price.

Letner broke his neck when he flew off his bike at highway speed, but protective gear like this helmet helped him survive. Celia Llopis-Jepsen
Letner broke his neck when he flew off his bike at highway speed, but protective gear like this helmet helped him survive. Celia Llopis-Jepsen

Bills that exceed market value for a medical service are common, experts say. Patients who receive them land in a legal maze without a guaranteed exit, or any paperwork making clear what amount they really need to pay.

Patients owe something for the care they received, Lehigh University law and business professor George Nation says. But that “something” is what buyers and sellers willingly agree upon in informed situations.

“Look at what they get paid for (care, not what they charge for it,” Nation said. “That’s the big game that hospitals and doctors like to play with the word ‘charges.’ They’re just numbers. … No insurance company pays those.”

What matters is what health care providers accept from insurers, he says. In-network prices represent deals negotiated by two willing parties. A unilateral, non-contracted bill for nearly $50,000 mailed to the victim of a traffic accident does not.

The difficulty, though, is getting billers to stop pressing patients for more. Health care providers and collections agencies, armed with those forms from patients promising to pay all charges, can sue. They can hurt patients’ credit scores, put liens on their homes and garnish their wages.

Read a list of expert tips here for dealing with medical bills that seem too high.

Patients routinely don’t know their rights, or have an attorney. And if a bill goes to court instead of collections, judges may not have the price information they need to spot price-gouging.

“So what’s been happening is that (health care providers) have been suing individuals who are poorly represented, maybe not represented at all,” Duke University professor of law and business administration Barak Richman said. “They’ve been getting default judgments.”

Richman argues state attorneys general have the authority to go after companies for charging excessive prices, and to help patients recoup excessive payments. State courts, meanwhile, could train their judges to figure out appropriate health prices using publicly available databases and other sources.

“When hospitals or providers or air ambulances go after patients and claim to be owed chargemaster prices — these extraordinary prices that nobody would ever agree to — it really is akin to theft,” he said. “They are not entitled to that.”

Others want Congress to rein in medical bills with legislation to curb a practice called “surprise billing,” or to let states regulate air ambulance prices so state efforts no longer get blocked in court.

Letner, an artist and sculptor, flips through a journal with photos of his now-destroyed motorbike. He has chronicled his daily thoughts and experiences since the accident.
Letner, an artist and sculptor, flips through a journal with photos of his now-destroyed motorbike. He has chronicled his daily thoughts and experiences since the accident.

Market value for that trip to Joplin

So what about the $48,934.27 bill Letner received for the helicopter ride that got him to Joplin an estimated half an hour faster than a ground ambulance would have?

Does it exceed market value?

No patient advocacy groups, health care price experts or law professors we spoke to put a definitive price on it. The question might only be settled if it went to court.

Air Methods says its average flight cost is $12,000, but that it bills more to privately insured people like Letner to make up for money lost on other patients.

The privately held company won’t disclose its profit margins.

The Letners have Blue Cross Blue Shield of Kansas state employee health insurance through Diane’s job at Pittsburg State University. That paid about $7,000 for the 30-mile ride.

Blue Cross said it pays for out-of-network emergency flights at the same rates that it has negotiated for in-network, contracted air ambulances.

Sentinel Air Medical Alliance — a Wyoming-based consulting firm that reviews air ambulance bills — estimated operating costs (sans profit) for a roughly 30-mile transport would fall between $7,000 and $8,000 if the chopper makes 30 flights a month.

That’s similar to the average costs per ride disclosed publicly by a Kansas air ambulance company in 2015.

And in Texas, an administrative judge concluded a price of about 1.5 times Medicare rates was enough to allow an air ambulance operator locked in a price dispute there to earn a profit. (That case is now pending before the Texas Supreme Court.)

By contrast, Air Methods sent Letner a bill for seven times what a Medicare spokesperson said the government program would pay (less than $6,500) for a 30-mile air ambulance ride in Kansas.

Uncertain what to do, the Letners recently undertook a month-long hunt for a lawyer with expertise in situations like theirs. He advised them to refer Air Methods to him, and reassured them they were in a good position to fend off any efforts by the company to collect its full bill.

“I wanted this off my plate,” Letner said, “and not to have to worry about bankruptcy.”

Air Methods has since told the Kansas News Service that it sends unpaid bills to collection agencies only in two scenarios: If people get their health insurance check and refuse to give it to Air Methods, or if they ignore for half a year the company’s questions about who their insurer is.

Asked whether the company sues patients, garnishes their wages or puts liens on their homes, vice president Myers said: “Historically, Air Methods may have done that … We certainly do not do it today.”

The company said it collects little from privately insured patients directly — on average about $130 last year per patient — when billing out-of-network. This, despite the congressional audit showing Air Methods’ average charge at about $50,000 in 2017.

Sign the dotted line

Letner signed a contract agreeing to pay his Air Methods bill while drugged and confused. Legal experts say it wouldn’t hold up in a court of law for that and other reasons.

“Clearly, Mr. Letner had no capacity to contract for anything,” said Nation, at Lehigh University.

The form doesn’t say what Air Methods planned to charge Letner, but it says the company can get his credit report to help collect money from him if he doesn’t pay. It also says Letner promises to foot the full bill if his insurance won’t.

Letner only found out in February that he signed the document on the day of his accident last July. He thought his lack of memories from that day meant he’d been unconscious.

Notes taken at the time by the air ambulance crew describe him as awake after the accident, but “mildly confused.” He didn’t know what had happened to him, and was “repeatedly asking questions despite receiving answers.”

They gave him fentanyl to dull the pain. And paperwork to sign.

Injured, confused and presented with paperwork

  1. 4:55 p.m. July 13, 2019: Air ambulance crew at the scene of Letner’s accident notes that he can’t recall what happened and is “repeatedly asking questions.”
  2. 5:02 p.m. Air ambulance takes off to transport him to Joplin. Crew gives him fentanyl for his pain.
  3. 5:17 p.m. Crew gives him another dose of fentanyl for pain.
  4. 5:21 p.m. Helicopter lands at the hospital.
  5. 5:25 p.m. “All appropriate paperwork signed.”

Experts say health care providers often ask patients to sign such paperwork while panicked or confused from an injury.

The forms grant permission for medical care, but patients may not notice sentences often toward the bottom agreeing to financial responsibility for a bill they haven’t seen.

Marty Makary, a professor and surgeon at Johns Hopkins School of Medicine, calls that one of many practices eroding public trust in the medical system.

“People come to us at a hospital at a time when they’re vulnerable and they’re scared,” he said. They “have every thought and emotion going through their brain, and it is traumatic.”

Makary takes up the topic in his book, The Price We Pay: What Broke American Health Care — and How to Fix It. He considers financial promises made under such circumstances invalid, and legal experts agree.

Ann Marie Marciarille, a law professor with a specialty in health care at the University of Missouri-Kansas City, says courts are generally skeptical of contracts signed in emergency medical situations.

“Nobody assumes that in the emergency room you have the option of slowing down and reading things,” she said. Moreover, even if patients read the paperwork and don’t agree, they’re in no position to take their business elsewhere. “There’s no real freedom of contract.”

The Letners weren't sure what to do when they got a bill for nearly $50,000 from Air Methods.
The Letners weren't sure what to do when they got a bill for nearly $50,000 from Air Methods.

Some legal experts also recommend taking a pen and striking out or amending financial provisions folded into “consent to treatment” paperwork before signing it. But Air Methods states on its consent form that any such changes will be deemed “invalid.”

Nine days after Letner’s accident, Air Methods sent him similar paperwork — seeking his signature on a promise to pay whatever his insurance won’t cover, without showing him the bill.

Myers, at Air Methods, said the company doesn’t want to stress patients with that detail.

“We don’t want patients to be alarmed about the total amount,” he said, “until we have been able to work with their insurance company and understand what may be left for us to have to work on.”

Myers said Air Methods tries hard to get patients on the phone — it reached out to Letner repeatedly — to explain verbally that patients actually won’t have to pay what their insurance doesn’t cover if they cooperate with Air Methods through the process of billing the insurer.

“We don’t put that in writing,” Myers said, “because if we did that, then no out-of-network (insurer) would ever pay us anything. They would just pay us zero.”

That’s no comfort to the Letners. For them, what matters is what the company puts down in ink.

Regardless, law professors argue forms like this one mailed to Letner are problematic because patients can’t give informed consent for financial responsibility without bill details. Experts also suggest skepticism about Air Methods describing itself in writing as “patient advocates.”

“It is common practice for insurers to underpay,” the letter warns. “We are here to help you in the claims adjudication process, which we know can be confusing.”

Richman, at Duke, considers the letter misleading.

“The notion of a ‘patient advocate’ — we have a very specific understanding of what that means,” he said. And it’s “not somebody who might be a potential creditor.”

Letner, out of the hospital by then and recovering at home, didn’t sign that second form.

That was smart, Richman said. But in his legal analysis, if Air Methods is charging more than market value for helicopter service, the document wouldn’t entitle it to collect its price even with Letner’s signature.

Celia Llopis-Jepsen reports on consumer health and education for the Kansas News Service. You can follow her on Twitter @celia_LJ or email her at [email protected] The Kansas News Service is a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio focused on health, the social determinants of health and their connection to public policy.