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Learning from the Legal History of Billing for Medical Fees

  • Mark A. HallEmail author
  • Carl E. Schneider
Health Policy

Abstract

INTRODUCTION

When patients pay for care out-of-pocket, physicians must balance their professional obligations to serve with the commercial demands of medical practice. Consumer-directed health care makes this problem newly pressing, but law and ethics have thought for millennia about how doctors should bill patients.

Historical Background

At various points in European history, the law restricted doctors’ ability to bill for their services, but this legal aversion to commercializing medicine did not take root in the American colonies. Rather, US law has always treated selling medical services the way it treats other sales. Yet doctors acted differently in a crucial way. Driven by the economics of medical practice before the spread of health insurance, doctors charged patients according to what they thought each patient could afford. The use of sliding fee scales persisted until widespread health insurance drove a standardization of fees.

Current Practice

Today, encouraged by Medicare rules and managed care discounts, providers use a perverse form of a sliding scale that charges the most to patients who can afford the least. Primary care physicians typically charge uninsured patients one third to one half more than they receive from insurers for basic office or hospital visits, and markups are substantially higher (2 to 2.5 times) for high-tech tests and specialists’ invasive procedures.

CONCLUSION

Ethical and professional principles might require providers to return to discounting fees for patients in straitened circumstances, but imposing such a duty formally (by law or by ethical code) on doctors would be harder both in principle and in practice than to impose such a duty on hospitals. Still, professional ethics should encourage physicians to give patients in economic trouble at least the benefit of the lowest rate they accept from an established payer.

KEY WORDS

medical fees billing law ethics 

Notes

ACKNOWLEDGMENT

This work was supported by a Robert Wood Johnson Foundation Investigator Award in Health Policy Research, but the views we express are our own. Nancy Tomes, Timothy Jost, and 2 anonymous reviewers provided valuable advice on historical materials.

Conflicts of Interest

None disclosed.

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Copyright information

© Society of General Internal Medicine 2008

Authors and Affiliations

  1. 1.Division of Public Health SciencesWake Forest UniversityWinston-SalemUSA
  2. 2.University of MichiganAnn ArborUSA

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