by: Tom Koziol
I am an open heart surgery survivor. That by itself makes me a lucky man. However couple that with the fact the entire procedure from beginning to hospital discharge cost me only $ 125.00 and you can reasonably call me lucky again.
You see, I have a great insurance program. But, what I have doesn’t make any difference to millions of Americans who either don’t have insurance or are underinsured. These are the people who receive those huge medical bills that make headline news at least once a quarter.
It is common knowledge hospitals are extremely aggressive in attempting to collect what they say they are owed. It is also common knowledge hospitals charge the un/under insured full price for every procedure, medication and service.
Should anyone care to read hospitals saying what you just read, I reference the document titled, HHS Guidance on Hospital Discounting for Uninsured Patients. Simply google the title and you’ll be taken to its page.
This article will present a theory based on research and a common sense reading of applicable federal statute. I will use me as the example because I saved every piece of paper I signed/was given during my stint into the medical world.
As you may imagine, I had doctor visits, a hospital stay and follow up visits and treatment. All documented on paper and by my co-pay checks. What I found interesting in this whole trek was the total lack of information I was given about costs.
The medical information detailing the procedure, the medications, the rehabilitation efforts, etc. was outstanding. I knew from the outset it wasn’t going to be a picnic or a walk in the park.
What I didn’t know was the cost. I will readily admit up front I didn’t care about the cost because I knew by discount agreement – the term the hospital and doctors use to get paid by both me and the insurance company – my cost was to be only a small co-pay.
If you reread my co-pay total, small could be called an exaggeration for a six day stay in the hospital that included open heart surgery. But, again, I knew what my discount agreement allowed and liked the number so I didn’t bother to quibble or argue.
Anyone not this lucky should not only quibble and argue but demand better pricing. I think I know the federal law that gives you the right to step over quibbling and arguing and proceed directly to demanding.
The title of the Act is the Consumer Credit Protection Act but is better known as the Truth in Lending Act. Most people believe it applies only to credit cards and real estate. Not true.
The next two paragraphs are redacted sections 103 and 104 copied directly from the statute. If you want to read the statute in its entirety, google Truth in Lending Act.
§ 103. Definitions and rules of construction
(c) The term “organization” means a corporation, government or governmental subdivision or agency, trust, estate, partnership, cooperative, or association.
(d) The term “person” means a natural person or an organization.
(e) The term “credit” means the right granted by a creditor to a debtor to defer payment of debt or to incur debt and defer its payment.
(f) The term “creditor” refers only to a person who both (1) regularly extends, whether in connection with loans, sales of property or services, or otherwise, consumer credit which is payable by agreement in more than four installments or for which the payment of a finance charge is or may be required, and (2) is the person to whom the debt arising from the consumer credit transaction is initially payable on the face of the evidence of indebtedness or, if there is no such evidence of indebtedness, by agreement.
(h) The adjective “consumer”, used with reference to a credit transaction, characterizes the transaction as one in which the party to whom credit is offered or extended is a natural person, and the money, property, or services which are the subject of the transaction are primarily for personal, family, or household purposes.
(i) The term “open end credit plan” means a plan under which the creditor reasonably contemplates repeated transactions, which prescribes the terms of such transactions, and which provides for a finance charge which may be computed from time to time on the outstanding unpaid balance. A credit plan which is an open end credit plan within the meaning of the preceding sentence is an open end credit plan even if credit information is verified from time to time.
(j) The term “adequate notice”, as used in section 133, means a printed notice to a cardholder which sets forth the pertinent facts clearly and conspicuously so that a person against whom it is to operate could reasonably be expected to have noticed it and understood its meaning. Such notice may be given to a cardholder by printing the notice on any credit card, or on each periodic statement of account, issued to the cardholder, or by any other means reasonably assuring the receipt thereof by the cardholder.
(p) The term “discount” as used in section 167 means a reduction made from the regular price. The term “discount’ as used in section 167 shall not mean a surcharge.
(q) The term “surcharge” as used in section 103 and section 167 means any means of increasing the regular price to a cardholder which is not imposed upon customers paying by cash, check, or similar means.
(u) The term “material disclosures” means the disclosure, as required by this title, of the annual percentage rate, the method of determining the finance charge and the balance upon which a finance charge will be imposed, the amount of the finance charge, the amount to be financed, the total of payments, the number and amount of payments, the due dates or periods of payments scheduled to repay the indebtedness, and the disclosures required by section 129(a).
(x) As used in this section and section 167, the term “regular price” means the tag or posted price charged for the property or service if a single price is tagged or posted, or the price charged for the property or service when payment is made by use of an open-end credit plan or a credit card if either (1) no price is tagged or posted, or (2) two prices are tagged or posted, one of which is charged when payment is made by use of an open-end credit plan or a credit card and the other when payment is made by use of cash, check, or similar means. For purposes of this definition, payment by check, draft, or other negotiable instrument which may result in the debiting of an open-end credit plan or a credit cardholder’s open-end account shall not be considered payment made by use of the plan or the account.
§ 104. Exempted transactions
This title does not apply to the following:
(1) Credit transactions involving extensions of credit primarily for business, commercial, or agricultural purposes, or to government or governmental agencies or instrumentalities, or to organizations.
(2) Transactions in securities or commodities accounts by a broker-dealer registered with the Securities and Exchange Commission.
(3) Credit transactions, other than those in which a security interest is or will be acquired in real property, or in personal property used or expected to be used as the principal dwelling of the consumer, in which the total amount financed exceeds $ 25,000.
(4) Transactions under public utility tariffs, if the Board determines that a State regulatory body regulates the charges for the public utility services involved, the charges for delayed payment, and any discount allowed for early payment.
(5) Transactions for which the Board, by rule, determines that coverage under this title is not necessary to carry out the purposes of this title.
(6) [Repealed]
(7) Loans made, insured, or guaranteed pursuant to a program authorized by title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.).
Let me call your attention to section 104. I believe 104 is very specific as those who write our laws are very careful when they say to whom a law applies and to whom a law does not apply. Hospitals and medical personnel are NOT exempt from TILA coverage or they would be listed in the above exemptions (also see below).
Yes, it is that simple or we would have laws that don’t mean what they say. Hence, no real law at all.
Now go to section 103 and read ALL the definitions. The definition of credit is: “The term “credit” means the right granted by a creditor to a debtor to defer payment of debt or to incur debt and defer its payment.â€
Using the paperwork given to me to prove I was granted credit, I look at a document titled: Federal Truth In Lending Initial Disclosures. The hospital admits they are lawfully bound by TILA. Therefore, I was granted credit and/or an open end credit plan (§ 103(i) above). At the same time, they know/admit they are bound by this law by giving me this document.
If this is true, they violated § 103 (u) and (x). No where on any of the documents does it state the amount to be financed. There are only references about the amount to be financed and/or outstanding balance owed. Look at your documents. Do you see any amounts listed? (I assume you have hospital/doctor documents.)
In a second document in my package of documents is one titled Conditions of Testing/Treatment/Admission, paragraph 7A states, “I promise to pay the hospital for all goods and services furnished by or through the hospital and only AFTER DISCHARGE (my emphasis) will a bill be prepared and mailed to me showing charges due and payable at time of service. “ (As a side note, I put the word “valid†between the words “all†and “goods†just in case I actually had to dispute some of the charges. The hospital didn’t blink an eye and accepted the addition.)
Notice any discrepancy between this wording and the wording in § 103(u)? It is only after the surgery that they tell me how much I owe. I’ve been told by legal eagles this admittance paperwork is the first part in a two part legal process. This part is called the offer.
In other words, the hospital is only offering their services under those stated conditions.
Mind you, they haven’t performed a single act, yet. Now, when I sign the documents, I’ve committed a legal act called acceptance. This 2 part process is called offer and acceptance.
By the way, you don’t have to accept them as they appear on the offer. You can make changes like I did on the offer form showing the conditions you will accept. If you sign it and they take it back and don’t change the changes, these become the new conditions of the contract. (Note: I also struck out an entire paragraph and the clerk only shrugged her shoulders. So, it can be done without consequence to you.)
It appears to me only one party, the hospital, in this process has complete and full knowledge of the cost of the procedure but makes only a partial disclosure to me the debtor. So, if I want their service(s), I am forced to accept partial disclosure even if I made changes.
I say partial because the document does not contain any pricing. Hence, according to the law, it is only partial in nature.
Look at § 103 (j). It seems to say I must be given full disclosure in order to make an informed decision. How do you read it?
Full disclosure and notice have been part of American law since the inception of the republic. In fact, tomes exist in the law library on just this one arena. The volumes of material are a sure cure for insomnia or so I’m told.
By the way, nothing in this article is meant to replace competent and professional legal advice. Should you be one of those people being hounded by medical bill collectors or hospitals, it is a great idea to consult with an attorney specializing in this field.
I present the above information for your thought and consideration. It seems to me the hospitals and medical professionals know they are bound by the law yet openly flaunt it. Therefore, in my opinion, it seems writing them a letter and asking for all the information TILA says you should have received will help you resolve those bills sooner. Or, in the alternative, become a basis for your own legal action.
I also fully realize there must be an oversight organization or agency and it must have the teeth to enforce penalties against those engaging in law breaking. To me, the State Attorney General is the main oversight agency. It may be different in your jurisdiction so please do your own research.
I could go on for twenty five more pages but I think you get the gist of my presentation. A law does exist to protect un/under insured people but it isn’t being used for that purpose.
Maybe it is time TILA is brought to center stage and exposed to the sun. Who knows, this exposure may just cure some of the ills (pun intended) inherent in medical billing and collections and save some people’s homes, assets and bank accounts.
About The Author
Tom Koziol is the Executive Director of a non-profit devoted to making life easier for senior citizens, senior caregivers and baby boomers. Free and low cost resources are available at: http://www.senior2senior.org.
The Medical Center of Central Georgia, JOINT CARE, Macon GA.      