New Legislation Aims To Reform Hospital Billing Practices

LOS ANGELES (CBS) — Many Angelenos find themselves facing unexpectedly hefty hospital bills after going in for a test or procedure. One senator hopes his new legislation will help curb the sticker shock.

Russell, who asked that only his first name be used, recently required a two night stay in a local hospital to be treated for an infection. He was shocked by the $9,500 bill submitted to Medicare.

"It's devastating," says Russell. "It's incomprehensible."

KNX 1070's Charles Feldman reports Russell received a secondary statement letting him know that had he not used Medicare, the stay would have cost him $42,000.

Russell did not have a surgery or require any specialized care.

The law requires hospitals to give an estimate of their charges when asked. But those estimates do not include the cost of doctors or other experts who contract with the hospitals.

Jesse Daltos is a Hollywood stuntman who recently suffered burns to his hands which required a relatively brief visit to a local hospital.

Daltos, 36, said he was given gauze and an antibiotic ointment — along with a bill for $1,600.

"It was absurd," said Daltos, who does not have health insurance. "I've never spent that much money on gauze, I could've had gauze for years."

Democratic State Senator Ted Lieu says he plans to introduce a bill this month that places the burden on hospitals to disclose all potential charges associated with a procedure or stay.

Lieu says the issue was brought to his attention by KNX 1070 NEWSRADIO.

"After I listened to it, we did some research up here in Sacramento," says Lieu. "It turns out that number one, it is a problem. And number two, people are getting hit with hugely, grossly phenomenal medical bills for which they have no control over the cost."

Jan Emerson-Shea of the California Hospital Association, a lobbying group, said California is one of only five states where most hospitals cannot hire their own doctors, contributing to billing confusion.

"Most patients have the belief that physicians are employees of the hospital," says Emerson-Shea. "And so the cost estimates that the hospital can provide include those of all the various physicians who may treat them, and that is not accurate."

Lieu's legislation is likely to fight an uphill battle from state hospitals.