North Carolina Supreme Court Weighs ‘Reasonableness’ of Hospital Bills

By | February 15, 2012

North Carolina’s Supreme Court heard attorneys argue Monday whether consumers should be able to take hospitals to court to justify bills that seem excessive.

The high court took up the case of Robert Talford, 68, of Charlotte, who represented himself in saying his hospital should have to prove why it’s reasonable to charge him up to 24 times more than a local pharmacy for medications.

He was taken to Carolinas Medical Center in Charlotte in 2007 after experiencing heart problems, but objected to a $14,419 bill after his three-day stay in addition to the $5,556 charged for his hospital room.

The state’s Court of Appeals ruled last year that the hospital bill submitted into evidence by the Charlotte-Mecklenburg Hospital Authority doesn’t itemize the charges, and the only evidence that the costs were reasonable come from hospital employees. So a trial should weigh whether the hospital’s price was right.

“I don’t see anything wrong with paying a fair and reasonable cost because I’m standing here,” Talford told the court’s seven judges. “How long would it take them to prove to me and to you that their cost was reasonable? … They are telling you that `we charge $5,000 for a bed in a hospital and we don’t have to tell you what the charges consist of.’ ”

Talford said he was overcharged at the hospital for drugs including diltiazem, which is used to treat high blood pressure and control chest pain, He said the hospital charged 24 times more for the medication than what a local pharmacy would charge.

The North Carolina Hospital Association and big hospital groups based in Durham, Asheville, Greensboro, Winston-Salem and Raleigh want the Supreme Court to rule against Talford and make it easy for them to collect overdue bills through court without a trial.

A consumer advocacy attorney said the courts should be a neutral third party open to deciding what’s reasonable.

“If a patient has any sort of evidence that a bill or a charge, whether it be for a hospital or for anything else, they should be allowed their day in court,” said Stephanie Ceccato, who directs the consumer protection program at Legal Services of Southern Piedmont in Charlotte “I would think that hospitals should be subject to challenge of reasonableness of their charges.”

A judge can’t be expected to decide the reasonable price for a hospital to charge for rubber gloves or medications, said Jim Fuller, a former Court of Appeals judge representing the Charlotte medical center.

If the Supreme Court forces hospitals to go to court to justify their bills, the additional cost of collecting overdue bills would add to the already high cost of medical care, Fuller said.

“If every single contested hearing becomes not an hour or two but days, there will be a significant impact on the court system, as well as on doctors and hospitals,” Fuller said.

The fact that medications delivered at a hospital are pricy is no secret and no surprise, since charges must cover the overhead costs for nurses, doctors, equipment, meals, and constant cleaning, Fuller said. But it’s also true that a plate of chicken piccata might be $20 at a Davidson restaurant he frequents, and Fuller said he’s willing to pay though the cost of the ingredients may be ten times less because of the value of the eatery’s atmosphere, Fuller said.

For hospitals, “every item has a cost increase that covers that tremendous overhead,” Fuller said. “This is a case about the necessarily high cost of the best medical care in the world.”

The justices focused their questioning on Fuller’s argument, asking whether hospitals ever compete on price, how a patient can contest a hospital bill, and whether a patient is informed what is covered by the higher cost of a pill the hospital hands them.

Hospital prices are overseen by federal regulators, who allow the charges as standard, Fuller said. But Justice Patricia Timmons-Goodson asked if having a standard price for services and consumables, like pills, makes that price reasonable, Justice Patricia Timmons-Goodson asked.

“I could argue that standard is a synonym for reasonable,” Fuller said.