My 3/13/2021 post gave you information about the Hospital Price Transparency Rule that went into effect 1/1/2021. Just like the name sounds, the law requires hospitals to publish prices they’ve negotiated with insurance companies.
Now that the pricing information has been in the public sphere for a while, it’s time to see what it tells consumers. Spoiler Alert: It’s not good.
Legal Maneuvers to Block Transparency
Hospital and insurance trade associations tried to block their prices from being released. That was our first clue they had something to hide. Of course, that’s not what they said. Insurance companies said the information was essentially a trade secret. Revealing costs would negatively impact negotiations with providers. Here is the association’s 56-page letter to the Secretaries of Labor, Treasury, and Health and Human Services (HHS) making their case.
The hospital associations used a different tactic. They sued the Secretary of HHS.
It was all for naught, as both efforts failed.
What We’ve Learned about Pricing
Many hospitals are not complying with the rule. A July report issued by Patient Rights Advocate.Org found “…widespread failure of hospitals to report prices from all payers and plans…”
The Centers for Medicare and Medicaid Services (CMS) began sending warning letters in May to non-compliant hospitals. Ultimately the hospitals could be penalized up to $300/day.
Other hospitals have made the information so hard to find or complicated to navigate, it’s essentially useless. However, two reporters at the New York Times analyzed available data from various hospitals across the country. They discovered that some hospitals charge insured patients up to two times more than uninsured patients. Participants in PPO plans can be charged two and one-half times more than the same insurer’s HMO plan is charged.
These Costs Affect Everyone
You may think that since you have a good insurance plan or likely won’t be hospitalized, these prices don’t affect you. But they do.
Many plans have high deductibles and co-insurance amounts. The bigger the bill, the more likely you’ll have to pay most or all of your deductible. And remember, the insurance company won’t pay anything towards the bill until you’ve paid your entire deductible.
Your other additional cost is a higher co-insurance payment. Your co-insurance is a percentage of the allowable charges. Therefore, the higher the charges, the bigger your cost.
Your insurance premiums are affected by the cost of bills your insurance company pays, even if you aren’t hospitalized. In other words, when insurers pay high-dollar claims, they pass along their costs to you in the form of higher premiums.
What You Should Do
Finding a hospital’s information and understanding it can be challenging. Here are some tips to help you:
- Know your insurer’s name and plan type; such as, HMO or PPO
- Costs are typically listed by procedure code, known as a CPT code; ask your provider what CPT code(s) she plans to use and have them handy when you start this search
- Find your hospital’s information by Googling the hospital’s name and “negotiated price list” or a similar phrase
Find additional details about the process and sample screen shots in this article from The Upshot.
If the hospital has not posted their information, you can email a question or file a complaint with CMS. Also, find additional things you can do to estimate hospital costs in my previous post on the Hospital Pricing Transparency Rule.
Understanding the possible cost of your upcoming hospitalization remains far less than transparent. It will take time and energy to get an estimate of your costs. But if you have the time, anything you can do to prevent a surprise bill will be worth it.