Business Law
Business Law News 2015, Issue 2
Content
- Bln Editorial Board: Message from the Issue Editor
- Business Law News Editoral Team
- Executive Committee: Message from the Chair
- Executive Committee of the Business Law Section 2014-2015
- Health Law Basics for Business Lawyers
- Navigating Due Diligence in Health Care Transactions: Sensitive Information and Pitfalls
- Standing Committee Officers of the Business Law Section 2014-2015
- Table of Contents
- The Abyss of Managed Care and its 40-Year Impact on Payer/Provider Relations
- The Decay of California's Prohibition of the Corporate Practice of Medicine
- Using Statistics to Determine Whether Causation is Adequately Proven in Medical Malpractice Actions Involving Multiple Events Preceding the Injury
- What is the Meaning of Meaningful Use? How to Decode the Opportunities and Risks in Health Information Technology
- In the Absence of Agreement: California Courts Define Pricing for Non-contracted Medical Services
In the Absence of Agreement: California Courts Define Pricing for Non-contracted Medical Services
David D. Johnson1
David D. Johnson is a health law attorney in the San Francisco office of Crowell & Moring, LLP. He focuses on health care litigation and regulatory counseling. Mr. Johnson graduated from the University of Texas at Austin School of Law. Prior to law school, he worked as a C.P.A.
Americans are accustomed to dealing based on the principles of contract, in which the buyer and the seller agree in advance on the price that will be paid for goods and services. Not so for medical services.
In many cases, there is no meeting of the minds on the extent or price of medical services before they are performed. Many providers, such as physicians and pharmacies, do not publish price lists. Since 2003, California has required most hospitals to publish their price lists, called "chargemasters,"2but hospital chargemasters can contain 15,000-20,000 prices for different services and describe services using technical terms beyond the ken of the average consumer.3 Since the early 1980s, a vast gap has emerged between the list prices and actual prices paid for hospital services. A 2006 study found that the gap between charges and actual payments was 255% and growing rapidly.4 A 2013 study similarly found that hospitals on average billed Medicare 377% of what they were actually reimbursed.5