Limiting Overall Hospital Costs by Capping Out-of-Network Rates

18 Pages Posted: 10 Jul 2023

See all articles by David Orentlicher

David Orentlicher

University of Nevada, Las Vegas, William S. Boyd School of Law

Kyra Morgan

Nevada Department of Health and Human Services

Barak D. Richman

Duke University School of Law; CERC, Stanford Univ. School of Medicine; George Washington University - Law School

Date Written: Summer 2023

Abstract

Contract theory offers a simple and wildly effective solution to surprise bills: Hospital admissions contracts are contracts with open price terms, which contract law imputes with market rates. This solution not only obviated the costly, time-consuming, and complicated (and still unimplemented) legislative fix in the No Surprises Act, but it also is a superior solution since it introduces superior incentives to disclose, compete, and economize.

Using data from the Nevada Department of Health and Turquoise Health, this paper explores the theory and empirics of employing contract law's solution to hospital surprise bills and its superiority over other legislative interventions.

Suggested Citation

Orentlicher, David and Morgan, Kyra and Richman, Barak D., Limiting Overall Hospital Costs by Capping Out-of-Network Rates (Summer 2023). Annals of Health Law, Vol. 32, No. 2, 2023, Duke Law School Public Law & Legal Theory Series No. 2023-37, Available at SSRN: https://ssrn.com/abstract=4488575

David Orentlicher

University of Nevada, Las Vegas, William S. Boyd School of Law ( email )

4505 South Maryland Parkway
Box 451003
Las Vegas, NV 89154
United States

Kyra Morgan

Nevada Department of Health and Human Services

Barak D. Richman (Contact Author)

Duke University School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States
919-613-7244 (Phone)
919-613-7231 (Fax)

CERC, Stanford Univ. School of Medicine ( email )

United States

George Washington University - Law School ( email )

2000 H Street, N.W.
Washington, DC 20052
United States

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