California Medical Billing Advocates Inc

While Obamacare had led to historic gains in insurance coverage, it is estimated that 56 million Americans are uninsured or underinsured in 2018. 41% of underinsured adults reported deferring medical care due to cost, while 47% had difficulty paying their medical bills and debt.[1]
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These figures are highly troubling in the context of the average American family's financial profile. According to the Federal Reserve, 40% of adults would not be able to pay for a $400 unexpected expense at all, and 60% would not be able to pay without borrowing or selling assets.[2] In 2017, "over one-fifth of adults had major, unexpected medical bills to pay, with a median expense of $1200. Among those with medical expenses, 37% have unpaid debt from those bills... Over one-quarter of adults went without some form of medical care due to an inability to pay".[3]
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Think about what these numbers mean. 40% of ADULTS would not be able to pay for a $400 unexpected expense. 20% of ADULTS each year had received an unexpected medical bill with a median expense of $1200. That implies that 8% of US adults in any given year would receive an unexpected medical bill and would not be able to pay for it!!!
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Unpaid medical bills will eventually be sold to a collection agency, at which point they become medical debt and impact credit scores. Once on the credit report, medical debt can remain for up to 7 years. A low credit score affects multiple aspects of a person's private and public life, including many that don't involve borrowing. Many rental leases and job applications require credit checks. Insurance companies often include credit scores in determining premium prices. The patient will be subject to debt collection and possibly abusive practices.
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Due to the dysfunctional U.S. healthcare payment system, the dollar amount of the medical bill sent to the patient is often grossly inflated, and has little correlation with how much the provider expects to receive as fair payment for that service.
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WE BELIEVE MANY SURPRISE MEDICAL BILLS ARE EXCESSIVE AND UNJUST. The damage to the consumer has already begun by the time that medical bills are reported to collection agencies as medical debt. Therefore, we try to negotiate a lower reasonable bill before they become medical debt.

The organization will start with three major services in negotiating medical bills: 1). Negotiating charity care or discounted rates in medical service for uninsured / underinsured patients; 2). Assisting patients with balance billing by out-of-network providers; 3). Identifying errors in medical billing due to the complex nature of the US healthcare reimbursement system. We will seek to create systems and procedures to assist at these intervention points on the patient's behalf. Longer term, we plan to provide financial education to enable people to rebuild their financial profile after addressing the surprise medical bill, and possibly acquire medical debt with the intent of forgiving them.

Program 1: Negotiating Billed Charges to More Reasonable Rates

Reimbursement for U.S. healthcare services is based on a patchwork of contracts between payors and providers. Providers start with a list price of charges for services, commonly known as chargemaster. Payors negotiate discounts from the chargemaster price through in network contracts. The chargemaster is often vastly inflated and is commonly used as a tactic by providers to apply negotiation leverage against payors, since payors and patients risk incurring inflated charges by being out of network. CALMBA will try to negotiate these inflated bills to more reasonable rates based on usual and customary charges (UCC), average contracted rates (ACR), and Medicare / Medicaid reimbursement rates.

Program 2: Negotiating Balance Bills

Most balance bills occur when patients receive care from facilities-based physicians who are out-of-network, where the patient has little to no choice in verifying network status nor the alternative in choosing an in-network provider. Balance bills are an artifact of the dysfunctional reimbursement dynamic between insurance companies and facilities-based specialties, but patients end up being the unfortunate casualty by receiving these surprise bills. To make matters worse, health plans have little incentive to assist patients in balance billing matters, since most of the time these are out-of-network providers where no contract exists. As a result, patients are often left on their own to address these surprise bills. CALMBA will deploy financial, legal, and medical tactics to assist patients in negotiating balance bills.

Program 3: Billing Errors

Given the complexity in translating healthcare interactions into a system of codes and bills, there are numerous chances for billing errors to occur during the process. This does not necessarily imply ill will by the participants, as it is normal for errors to occur within complex interactions. However, most of the time the patients do not know how to identify and correct these errors. CALMBA will try to identify and eliminate billing errors on the patient’s behalf, by recruiting medical coders / billers to review medical bills, and outsource complex cases as needed to experts.

Surprise and excessive medical bill is a deeply complex structural issue within the U.S. healthcare reimbursement system that intersects multiple disciplines in finance, law, and medicine. Our board of advisors consists of an ex-healthcare finance executive with 20 years of experience, a professor from UCSF medical school, and a professor from UC Hastings law school. Our officers consists of finance executives who had experience in building successful companies from scratch and carrying out their vision. Together, we hope to combine our deep individual expertise in finance / law / medicine, and execute on a vision in creating a nonprofit infrastructure that negotiates surprise and excessive medical bills on behalf of patients.

The origin of CALMBA came from Gary’s personal experience with balance billing in 2016. As a highly experienced healthcare finance executive, he successfully fought the bill by examining the benefit design and the circumstances in which he was billed. However, he felt that the situation was deeply unjust, as the average American stood little chance in navigating such a complex system. In 2019, Gary decided to execute on his vision to launch CALMBA, with support from faculty and resources at UCSF and UC Hastings.

Medical bill negotiation strategies: We continue to work with financial, legal, and medical professionals to refine our negotiation strategies to improve our chance of success.

Corporate: We have developed a scalable infrastructure primarily using in-kind donations from Google, Microsoft, and salesforce.com. The organization is built to scale up with contractors / employees / volunteers as donation and budget allows more resources for medical bills negotiation.

Media: We are reaching out to local patient advocacy groups, as well as national media to get our message out. According to data from the federal reserve, 8% of adults in the U.S. are expected to receive a surprise medical bill in any given year. The challenge is to get the word out to patients who need help.

Fund Raising: We plan to generate quantifiable results, and then reach out to large donors and grant making organizations.