Committee Correspondence

The House Committee on Energy and Commerce

Tauzin, Greenwood Want More Information on Hospital Billing

January 22, 2004

The Honorable Tommy G. Thompson
Secretary
U.S. Department of Health and Human Services
200 Independence Avenue, S.W.
Washington, DC 20201

Dear Secretary Thompson:

As you may know, the Committee on Energy and Commerce is conducting an investigation into the billing practices of certain medical providers for uninsured patients. Such individuals, we have learned, are often expected to pay substantially higher amounts for medical services than third-party health plans (such as medical insurers, health maintenance organizations and preferred provider organizations) or government health care programs. The uninsured appear caught in the middle of the sophisticated and complicated forces driving health care financing including managed care, government entitlements, rising costs and shrinking public funds. These practices raise significant public health and consumer protection issues.

Medical providers have pointed to certain federal regulations as principal impediments to addressing these problems. On December 16, 2003, the American Hospital Association sent you a letter asking for help with the "federal regulations that make it far too difficult and frustrating to give uninsured Americans and others of limited means the same reduced rates for hospital care that state and federal governments, health plans and private insurers ultimately pay." The AHA issued this letter in concert with a "white paper" outlining a number of specific regulations which they claim hamper their efforts to help uninsured patients in terms of charges and collections.

In this regard, pursuant to Rules X and XI of the U.S. House of Representatives, please provide the Committee with the following information and documents by February 6, 2004.

1. Do any federal regulations prohibit, complicate or otherwise impact a hospital's ability to offer discounted rates to uninsured patients?

2. Do any federal regulations make a "practical requirement that a hospital bill all patients according to the same schedule of charges, regardless of who provides their coverage," as the AHA claims?

   1. Do providers risk, in any way, reduction or suspension of payments under either the inpatient or outpatient prospective payment system of Medicare if they reduce, in any manner, their "schedule of charges" or "charge master" rates?

3. Do any federal regulations, including, but not limited to, those concerning Medicare bad debt, expect or encourage hospitals to be "aggressive in their collection efforts," as the AHA claims?

   1. Are such collection efforts required for all patients for whom adequate documentation is not available, or cannot be obtained, to demonstrate and establish proof of indigence?

   2. Do reasonable collection efforts under such federal regulations include:

      1. phone calls or letters threatening lawsuits or referral to a collection agent;

      2. use of debt collection agents;

      3. wage garnishment;

      4. contacting employers;

      5. property and/or home liens;

      6. lawsuits; or

      7. credit reporting?

   3. What program memoranda or other such guidance has HHS provided in this regard? Please provide copies of all such program memoranda or guidance.

4. Does HHS dispute any statements or claims made in the AHA's December 16, 2003 letter or related white paper and, if so, please explain all such disputes?

5. Is HHS conducting, or has it ever conducted, any studies, reports or investigations on these issues and, if so, please produce copies of all such studies, reports or investigations?

6. Is HHS considering providing, or has it ever provided, any statements or guidance on these issues to patients or any entity in the health care industry and, if so, please produce copies of all such statements or guidance?

7. Is HHS considering any rule changes relating to these issues and, if so, please provide the status of all such rule changes and please produce copies thereof?

8. Does HHS have any recommendations to Congress relating to these issues?

If you have any questions, please contact Mark Paoletta, Chief Counsel for Oversight and Investigations, at (202) 225-2927 or Anthony M. Cooke, Majority Counsel for Oversight and Investigations, at (202) 226-2424.

Sincerely,

W.J. "Billy" Tauzin, Chairman

James C. Greenwood
Chairman, Subcommittee on Oversight and Investigations

Cc:
John D. Dingell, Ranking Member
Peter Deutsch, Ranking Member, Subcommittee on Oversight and Investigations
Dennis G. Smith, Acting Administrator, Centers for Medicare and Medicaid Services
Dara Corrigan, Acting Principal Deputy Inspector General, U.S. Department of Health and Human Services

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