We’ve all seen the headlines: “$10,322 Tab For A Sleep Apnea Study,” and “She Survived the Coronavirus. Then She Got a $400,000 Medical Bill.” There are countless stories of people getting healthcare and ending up with mind-boggling bills. And that’s created an environment in this country where people are scared of financial ruin because of healthcare costs.
Our healthcare system is complicated, especially how we pay for it. This complexity results in a very opaque view when people want to understand what they will pay for care. Price transparency mandates at the federal level are aiming to make it less so. But, what exactly are these mandates and what, exactly, do they mean for us regular people who don’t spend all day reading up on our healthcare coverage? I personally hope it means that there is an increased awareness among people with health insurance that we can see what care will cost us (and plan for it) and that everyone will have protection against surprise medical bills.
What’s going on?
There are a few major mandates being highlighted that promise to reduce healthcare costs and make healthcare easier for patients. They are long, complicated, and somewhat still in flux, but I’ll share the highlights of what to expect–and what people can even start looking for today–to feel more in control and confident about healthcare.
If you read nothing else in this post, this is the takeaway: The federal government is taking multiple avenues to help reduce healthcare costs by increasing transparency. They are working to get people access to information on the costs of care, both from hospitals (rack rates) and from health insurers (through benefits-specific cost estimates for specific services), as well as reducing the likelihood that people will get hit with surprise medical bills through consent requirements and legislative protections.
Now, if you want to dig deeper, here we go!
Hospital Price Transparency:
The mandate for hospitals went into effect on January 1, 2021, and is intended to help make it easier for consumers to shop and compare prices across hospitals by displaying estimates for 300 services. Unfortunately, the rule has been ignored by many hospitals, people remain largely unaware of the requirement, and the lack of standardization in data makes it difficult to actually compare prices across hospitals for services.
How it works:
- Hospital price transparency helps Americans know the cost of a hospital item or service before receiving it. Every hospital operating in the United States is required to provide clear, accessible pricing information online about 300 items and services they provide (70 of which are dictated by CMS, the other 230 are up to the hospital) in two ways:
- As a comprehensive machine-readable file with all items and services. This basically means that third-party apps and other vendors are able to pull in and aggregate pricing information across hospitals for patients to quickly and easily look up.
- In a display of shoppable services in a consumer-friendly format. This enables patients to search for costs for services at a given hospital directly from that hospital website.
What patients need to know: While this mandate sounds promising, hospital price transparency doesn’t actually help patients very much. In fact, it presents a major issue for many people: it does not reference what they will pay out of pocket given their insurance. Since most Americans have insurance, rack rate pricing is interesting, but it is not particularly relevant or actionable.
Health Plan Price Transparency
The mandates for health plans haven’t gone into effect just yet, and are still evolving. Because of that, there is a bit less information, but the rules are not without some controversy.
How it works:
There are two major mandates here, the Transparency in Coverage rule and the No Surprises Act Legislation and in-process rule making. Combined, they essentially mean:
- Most health insurance plans (group and individual) will be required to provide cost estimates (via tool, print, phone) for 500 items and services starting 1/1/23 and all items and services starting 1/1/24.
What patients need to know:
More specific information, that is just what I wanted when talking about hospital price transparency, right!? It is a lot closer, but still, there are issues. The information that consumers really need isn’t included in the self-service tool the mandate requires. This rule is still at the billing code level, requiring that people are able to search by billing code and description, which is not really how people experience healthcare. It isn’t inclusive of all that goes into an end-to-end episode of care (like a surgery–with evaluation costs and recovery costs) so a comprehensive picture is missing. People need guidance on care costs to help consumers make sense of all the data.
A CTA for members: Ask your health plan questions!
- Go to your health plan and see if they already have a cost estimator tool. Many do! Go to the website, call them, ask if they have pricing information and how to get to it. If they don’t, ask when they will? What will be included and how can you access it?
A CTA for Health Plans: Start now!
It’s critical to start now and take advantage of delayed enforcement deadlines to make an even better member experience that goes along with your price transparency work.
At the end of the day, price transparency creates a lot of hard work for the healthcare sector. But, it’s the hard things that are often worth doing. And, in this case, that couldn’t be more true. We can’t lose sight of who all this hard work is for: our parents, our kids, our friends. The work you are doing is hard, but is important.
