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Much along the lines of Can a doctor make you pay for something you didn't explicitly agree to pay for?

Imagine Bob is struck unconscious by a hit & run, then transported by ambulance to the Emergency Room.

Bob wakes up two weeks later and checks out ASAP and does NOT sign any consent or other forms.

Bob receives a bill for $200K.

  • What enforceable obligation does Bob have to pay said bill?

  • Does the hospital have the right to put the $200K in collections if Bob does not pay?

  • Does the hospital have the right to Bob's insurance?

  • Is there any implicit contract? or is ER a charitable service?

Not that it matters: I feel that we should support ERs as they provide a critical service and everyone should have ER insurance.

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    I don't know nearly enough about this to make it into an answer, but: My impression is that the economic and legal realities of medical payment bear almost no relation to any common-law or statutory rules which would apply outside medicine. Instead, things are mostly handled by a combination of private contracts, field-specific state laws and regulations, and private negotations. It almost never happens that the legal merit of a specific bill/charge is challenged in a lawsuit which actually goes to trial. Oct 21, 2023 at 20:59
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    Are you a vehicle owner and as a consequence do you happen to have Uninsured/Underinsured coverage? In almost all states, hit and run falls into "Uninsured", and in Florida and NY, they protect you as a pedestrian; you don't need to be in your vehicle.
    – user662852
    Oct 22, 2023 at 2:20
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    In my emergency first aid training an unconscious patient is considered to implicitly grant permission to treat their injuries.
    – Jon Custer
    Oct 23, 2023 at 15:09
  • @user662852 Said example is hypothetical. However, that is really nice to know!
    – gatorback
    Oct 23, 2023 at 15:36
  • Isn't all that matters, whether there's any contract? How could there be, since Bob was unconscious? How could a choice between contractual liability and ER being a charitable service be valid? Both, either or neither might be true but how could anyone tell which, from the given exposition? Oct 23, 2023 at 20:47

1 Answer 1

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What enforceable obligation does Bob have to pay said bill?

At a minimum, the hospital has an unjust enrichment claim against Bob for the fair market value of its services to him, which are often presumed to be its "posted" official rates for those services.

Does the hospital have the right to put the $200K in collections if Bob does not pay?

Yes. But the obligation can't be legally enforced with involuntary collection of Bob's assets without suing him and winning. Often, bringing this lawsuit would be a task delegated to a collections agency retained by the hospital. It is also common for hospitals to have "in house" collections departments and to hire outside lawyers to bring lawsuits to collect these debts if they aren't paid voluntarily. Courts tend to give hospitals the benefit of the doubt in these cases.

Does the hospital have the right to Bob's insurance?

Basically yes. The hospital would win a judgment against Bob and then bring a writ of garnishment against the insurance company to force it to pay the money that it owes Bob to cover him for those charges.

Is there any implicit contract? or is ER a charitable service?

Sometimes the relationship is characterized as an implied in law contract under the legal theory of quantum meruit, which is a subtype of unjust enrichment claim.

Many ERs are owned by non-profits that have some obligation to be charitable in appropriate cases determined in its own discretion, but an ER is not, in general, a charitable service.

Further analysis

I feel that we should support ERs as they provide a critical service and everyone should have ER insurance.

U.S. federal law does require every ER to diagnose and treat everyone who comes to its doors, whether or not that person has health insurance or a practical ability to pay its fees, until that person's health condition is stabilized and that person no longer needs emergency care.

This obligation does not apply to other health care providers in the U.S.

So, indigent people who are uninsured in the U.S. tend to use ERs for health care needs that other people would not, knowing that they will leave the ER with an uncollectible debt but will get the health care that they most urgently need (not a good long term plan for the indigent person as lots of important health care is not an emergency that the ER has to treat once it determines that it is not an emergency).

But ERs are the most expensive form of health care for comparable services, because ERs must have basically every possible medical specialist whose services might be needed in some foreseeable emergency on call at all times, and most be geared up to handle non-routine, unscheduled cases of potentially extremely serious health conditions, possibly with surges of large number of patients from a pandemic or mass casualty event. And, the ER needs to be ready to treat these patients 24/7 so it has overhead that is incurred at high dollar amounts per hour even during times when the average number of patients doesn't economically justify the expense of keeping the facility open then on the basis of average profitability during those hours. So, the cost of keeping the ER open during slow and down times has to be shifted to ER patients during higher volume times as well.

The high cost of ER care, in a vicious circle, causes non-indigent patients and the amount of insurance company co-pays and deductibles to avoid ERs unless absolutely necessary, depriving ERs of bread and butter low severity cases of people who can afford to pay to mitigate the dead weight loss of paying people to keep the ER open when they aren't very busy. In contrast, many countries have ERs that are less economically stressed because they also provide what the U.S. health care system calls "urgent care" that fills in some of the downtime revenue gaps of U.S. ER facilities.

So, the U.S. provides a big share of its indigent care at the highest possible prices in an extremely high cost setting that isn't necessary to provide that vast majority of that indigent care, while still denying uninsured people who can't afford to pay the market price for health care services without lots of important non-emergency health care.

In part, because of the high volume of very high cost indigent care that U.S. ERs are forced to provide, U.S. ERs (and U.S. hospitals more generally) routinely have very large amounts of bad debt that they write off each year as a result.

Acknowledging this inevitable outcome and classifying it as charity care at the outset to avoid the futile paperwork of trying to collect payment from uninsured and indigent people is common at ERs that are non-profits and is taken as a charitable deduction by ERs that are for profit entities when possible.

In contrast to the U.S. system, the vast majority of countries on Earth (and not just developed rich countries either) have either universal healthcare provided at government expense, or universal public or private health insurance coverage for everyone that covers ER treatment (financed in a variety of ways) for its insureds and that health care providers can collect from directly.

The U.S. system is an extreme outlier in this regard, and no country in the world charges more for comparable health care services than the U.S. does.

There are many reasons that health care services in the U.S. are more expensive than anywhere else in the world. Some of these are not directly related to how people in the U.S. pay for health care. But there are some cost drivers in the U.S. that are absent in most other countries that are directly related to this method of financing health care services. These include:

  1. the fact that health care professionals have to pay for their educations at their own expense, often with student loans, rather than receiving free government tuition,

  2. the large amount of bad debt incurred by health care providers which must be subsidized by patients who can afford to pay personally or with their insurance company's or government benefits help,

  3. the cost of marketing health care services and health insurance,

  4. the lack of negotiating power between many health insurers (and government health care payors) and health care providers especially in ER contexts which health insurers (and government health care payors) are required to cover charges from non-network ER providers,

  5. the fact that government Medicaid payments for low income patients are so much lower than government Medicare payments for elderly patients and than private insurance company payments that non-Medicaid patients have to subsidize Medicaid patients that providers are sometimes required to take, and

  6. the high cost of processing insurance claims for a huge variety of insurance companies and government payors, each with their own forms and payment system.

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    "At a minimum, the hospital has an unjust enrichment claim against Bob for the fair market value of its services to him, which are often presumed to be its "posted" official rates for those services." I'm quite curious whether this has ever been tested in court -- as I understand it, the laughable (lack of) relationship between posted and market rates is one of the most well-known things in the economics of medicine. Oct 21, 2023 at 20:54
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    @GlennWillen "I'm quite curious whether this has ever been tested in court" Yes, it has been tested in court. Indeed, I am aware of two fairly recent Colorado Supreme Court case holding that the posted rates are appropriate to bill in the face of the context of the amount payable for medical care at hospitals including an unplanned ER emergency visit (one in a collection case by a hospital, another in determining which price should be used for awarding medical expense damages in personal injury cases). I don't have the citations right at hand.
    – ohwilleke
    Oct 22, 2023 at 1:48
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    I guess a lot hangs on the meaning of the word "posted", since hospitals never in fact post their rates. But the Colorado Supreme Court case I managed find in a quick search went against the hospital: revcycleintelligence.com/news/… , coloradosun.com/2022/05/21/… Oct 22, 2023 at 3:31
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    – feetwet
    Oct 24, 2023 at 16:30
  • "claim against Bob for the fair market value of its services to him, which are often presumed to be its "posted" official rates for those services." The significant change in 2022 is the No Surprises Act, which roughly, for covered emergency services, limits billing to what you would have paid for in-network care.
    – user71659
    Nov 7, 2023 at 23:06

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