Calif AB 774 Saves Patient $$$

Most States have laws protecting residents from outrageous hospital billing practices.  In California, we have AB 774.  Never heard of it?  You’re not alone.  The hospitals act like they’ve never heard of it, either.  Your local District Attorney may not know what it is.   I have known about it, but never used it until I broke my little toe. 

A broken little toe.  Some docs just splint and tape this kind of injury, depending on just how bad the break is.  How bad could it be?  Try a 45 degree angle.  My orthopod, Birrell Smith, at Las Tablas Medical Center, in Templeton, California, recommended a pin to hold the bone in place. 

He told me his fee was $600, but I would have to speak to each professional separately - including the hospital to find out what their fees would be.  As a cash-paying patient, I was familiar with the routine and paid the anesthesiologist $400 before heading to the hospital. 

At Twin Cities Hospital in Templeton, California (a Tenet Hospital), I gave the administrative clerk the code Dr. Smith gave me for a “closed treatment of fracture, phalanx or phalanges, other than the great toe, with manipulation; each..”  I don’t recall what the exact numeric code was. 

The clerk said this would cost $2205.09.   I expressed curiosity over the fact that three years earlier, the same hospital had charged me $1300 for a more major surgery.  Her response was that the earlier surgery was not an emergency.  As I stopped myself from slipping off the chair with one hand, I used the other to pull out my cell phone and told her that I’d let her think about that while I called several other competitive hospitals in the area. 

Another clerk walked by and told her that since I was paying cash (AND I was the ONLY other patient in their out patient surgicenter), that I was eligible for their 40% discount.  Yippee!  So, I wrote the check and that was that.  NOT!

 A month later, I got a bill from the hospital with a “pre adjusted” total of $17,519.07.  The adjusted total was $3,931.74.  When I called the hospital to tell them they must have made a mistake, they said that the billing clerk had changed the code after she read the doctor’s notes. 

“Isn’t that a bit like practicing medicine without a license?”  I asked, “And by the way, I’m looking at the AMA website right now and the code the doctor used is for a higher reimbursement rate, so how is it that you can charge me more for a code that reimburses less?” 

The woman I was speaking to told me I was putting words in her mouth and she couldn’t discuss this with me anymore.  She hung up and I started looking more closely at the bill.

Here’s the breakdown:

  • Surgery                     $5,255 (facility fee?) 
  • Anesthesia                $2,306 (anesthesiologist – PAID) 
  • Lab                           $51 (I think they took blood) 
  • Diagnostic Imaging    $443 (X-Ray?  Fluoroscope?) 
  • Pharmacy                 $5,225 (it was a 20 minute procedure) 
  • Supplies                    $2,232 (gauze and bandages?) 
  • Respiratory Therapy  $306 (none used) 
  • Recovery                  $1,697 (two barf bags)


TOTAL                         $17,515.00

I felt this was just out right fraud.  The check I wrote for $1323.54 should have covered all of these costs under the heading of facility fee.  It was time to use California AB 774. 

I wrote a 30-day demand letter to the hospital.  Since they were going to use insurance billing codes, despite the fact that it was a cash transaction, I was going to use them right back at them.  According to the code, the procedure I had reimbursed at $200, so that meant I over paid them by $1123.54, and I wanted that money back. 

Simultaneously, I filled out the small claims paperwork and paid a little extra to have the Sheriff serve the hospital.  I wasn’t going to wait 30 days. 

According to AB774, if you are uninsured and your income is below 350% of the federal poverty level or you have health insurance but your medical costs are more than 10% of your family’s income in the last year, you could qualify for free or discounted care. 

California law requires every hospital to offer reduced rates to uninsured and underinsured patients that may have low or moderate income and to provide policies that clearly state the qualifications for free care and discounted payments. 

Twin Cities did not have any such policy clearly stated.  Anywhere.  In no other business would a retailer accept payment, only to turn around and say, “I just didn’t bill you enough, here’s another bill,” and think they could get away with it.

In my case, they chose to use insurance billing codes - known as CPT codes.  They cited the codes, so I cited them right back and reinforced my case with AB 774. 

They didn’t even show up in court.  I got a check about a month later.

More information how and why hospitals defraud patients and insurance companies here.

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