A Valdosta-based company told state lawmakers Monday that hospitals are unjustifiably harassing its employees over medical bills.
The problem involves balance billing, a practice whereby a medical provider sends a patient a bill for charges beyond what is paid by a health plan.
The Langdale Company, which makes wood and forest products, says some of its workers are receiving collection notices and having their credit affected, even though the hospitals involved have already been paid what the company considers reasonable compensation.
These hospital bills may contain charges such as an $18 gauze pad, a $40 pregnancy test and a $7 Benadryl tablet, said Woody Waters of ELAP Services, a firm that audits hospital bills for Langdale and other employers that insure their own benefits plans.
Waters told the House Health and Human Services Committee that Langdale pays hospitals at least 20 percent above what the government Medicare program pays for services. But hospitals often end up pursuing patients for other amounts instead of making an appeal to ELAP about the original payment, he said.
The Georgia Hospital Association, though, told the panel that with the huge amount of free care given by hospitals, they must shift those costs onto insured people.
The House health hearing, packed with industry officials, also featured testimony about the high cost of certain ”specialty” drugs for cancer and other diseases.
Langdale and many large companies that insure their own health plans are exempt from state insurance regulations through a federal law known as ERISA. Langdale also does not use an insurer to administer its health plan, and pays its own health claims.
The company has gained prominence for keeping its health costs low through various initiatives, including wellness and disease management. (Here’s a recent article on the company by Georgia Health News.)
Neither Waters nor Barbara Barrett, the head of Langdale’s benefits plans, mentioned any hospitals by name in their testimony. “With some hospitals, there’s not an issue with balance billing,’’ Barrett said. “With others, there is.’’
“Our employees are harassed and balance-billed,’’ she said. “Their credit is affected. They receive phone calls at work.”
Barrett said Langdale started using ELAP “because we couldn’t absorb any more costs or pass along any more costs to employees.’’
Waters said that if Langdale or another company overpays a hospital by $100,000, that may mean three people don’t get hired, or three people are laid off.
Only when an attorney gets involved does the hospital back off from bothering the consumer, Waters said.
It’s not just a problem of one hospital or geographic area, Waters said. “It’s a systemic problem.’’
Rep. Rusty Kidd, an independent from Milledgeville, said he also experienced balance billing as a patient. For patients, he said, “it gets harder and harder to make ends meet.’’
But Rep. Buddy Harden (R-Cordele) said he doesn’t know what the Legislature can do about the problem, because the ERISA exemption precludes state regulation of self-insured employer plans.
Earl Rogers, a Georgia Hospital Association vice president, told lawmakers that with 1.9 million uninsured Georgians, “a lot of [hospital] bills do not get paid.’’
Hospitals have to treat all patients coming to their doors, regardless of ability to pay, he said.
Georgia hospitals gave $1.5 billion in free care this past year, Rogers said. “You have to find somewhere to shift those costs.’’
He said hospitals often believe they have a better chance of getting paid by sending bills to patients, then having them urge their employer to negotiate with the hospital.
But committee Chairman Sharon Cooper (R-Marietta) urged hospitals to use the appeals process before targeting patients.
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