HOSPITAL PRICES Go PUBLIC In 2019, And They’re NOT HAPPY ABOUT IT
Hospitals across the country have geared up to publish online price lists for all the medical services they provide, as a federal law takes effect on January 1.
The new law, which was announced in April, should also make it easier for patients to get access to their medical records, according to officials.
Currently, under the Affordable Care Act, hospitals must release public price lists, but from the start of 2019 they will be required to post these prices online in a format that can be downloaded to computers. These prices must be updated every year.
The changes also apply to rehabilitation facilities, psychiatric hospitals and critical access hospitals, the Centers for Medicare and Medicaid Services stated.
The health care industry nationally has a reputation for having little price transparency, which can make it difficult for consumers to price compare. But the hospital’s master list prices, sometimes called a chargemaster, is also not a complete look, consumer advocates say.
That’s because the final bill a patient receives is almost never the same as the sticker price for the services they received. Insurance companies negotiate discounts on the sticker prices. Co-pays, co-insurance, deductibles also add other layers of complexity that bring discounts or increased costs before a final charge is determined.
“The list prices are so high that the vast majority of hospitals don’t even try to collect list prices from uninsured patients,” said Benedic Ippolito, with the American Enterprise Institute, who has researched hospital list prices.
The federal rule is being brought out as a measure to improve competition and help educate consumers.
Seema Verma, the CMS administrator, said when the new requirement was confirmed: “We are just beginning on price transparency.
“We know that hospitals have this information and we’re asking them to post what they have online.”
But real transparency comes when consumers can easily see what they will pay to a provider based on their insurance benefits, said Thomas Campanella, Baldwin Wallace University health care MBA program director. He said some insurance companies are providing that information through price comparison tools.
“I almost see it being more of a political ‘look at what we did,’” Campanella said of the requirement to post list prices.
Kettering Health Network, which has eight hospitals in the Dayton, Ohio area, said the chargemaster will be posted on its patient pricing webpage after Jan. 1. Premier Health, which has three hospitals in the same region, said the information will be on its hospitals’ websites by Jan. 1. and consumers will find the list of charges where they currently find other pricing, insurance and billing information.
List prices can show what is at stake when hospitals and insurance companies are out of network, or do not have contract agreements between them.
A benefit of having health insurance is that the insurance companies negotiate with hospitals on a discount from what is listed on the chargemaster. If a hospital is “in network” it means the insurer and hospital have an agreement on discounted rates and the insurance company typically covers a higher portion of those prices.
If a patient goes to a medical provider that is out-of-network, they could be billed the difference between what the chargemaster lists as the price and what their insurance writes a check for. The practice is called balance billing or sometimes called “surprise billing.”
“Where list prices matter more nowadays is in the case of “surprise bills” or balance bills,” Ippolito said.
Ippolito said some people will argue that hospitals actually use list prices and the threat of balance billing as a way to get insurers to negotiate with them or otherwise face irate policyholders stuck with high bills.
“The idea is that you maintain a very high list price and you tell and insurer ‘Either you put me in your network or when one of your poor patients shows up in my hospital, I’m going to have no choice but to balance bill them for this huge amount and then you’re going to have to figure it out,” he said.
But there’s some concern that the price lists could cause confusion, according to health care business news website Modern Healthcare. The prices on a hospital’s website may not match those paid by their insurance provider, or Medicare. The website also highlighted that some not-for-profit hospitals calculate their rates according to a patient’s income.
Jeffrey Bromme, chief legal officer at the nonprofit healthcare company Adventist Health System, which has facilities in the South and Midwest, told Modern Healthcare: “A hospital’s charges are not as relevant to a patient because the patient’s bill may be significantly discounted or the services are provided at no charge under the hospital’s charity policy.”
Tom Nickels, executive vice president for government affairs and public policy at the American Hospital Association, told Modern Healthcare: “We do not want patients to forgo needed care, especially if the quoted price is for the total cost of the service and not what the patient will be expected to pay out-of-pocket.”
CMS countered that its guidelines didn’t prevent hospitals from providing this information to patients and the public, Modern Healthcare reported.
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