Hospitals Post Their Prices Online But There's Multiple Caveats

Hospitals across the U.S. were required to post online their pricing for medical services on Jan. 1 under a new federal law. While publishing prices is an effort to increase transparency, the data may do little to affect consumers and their healthcare costs — the information isn’t easy to decipher and many other factors go into the bill patients eventually pay.

Centers for Medicare and Medicaid Services (CMS) announced the requirement in April 2018, which also included implementing electronic health records in order for patients to have better access to their medical records. The pricing transparency mandate is designed to give consumers easier access to health costs through the internet, but hospitals were already required to make the information public under the Affordable Care Act. They just didn’t have to publish it directly online.

While the list of prices for hospital services may increase transparency, as Market Watch pointed out, it’s not always so easy to find or decipher the pricing data. Hospital pricing information is likely listed under insurance and billing information on the hospital’s website, where the hospital’s chargemaster, its price list, can be viewed or downloaded.

But it’s unclear how useful the pricing information is to consumers. Los Angeles Community Hospital’s chargemaster lists pricing information by component with line items such as “cement mix” ($650), “6.5 MM” ($828) and “Selox JT 45” ($4,139). By breaking out prices by medical item as opposed to by procedure, the pricing isn’t consumer-friendly.

The transparency data also doesn’t usually reflect what a patient will be responsible for paying. Insurance companies typically negotiate prices, meaning the sticker price consumers see online won’t necessarily be the final price. Once a price is settled between the hospital and insurance company, deductibles, coinsurance and copays have to be taken into account.

Knowing costs can become muddled if a patient uses a not-for-profit hospital. These hospitals sometimes provide care at costs based on the patient’s household income, according to Modern Healthcare. A sticker price won’t mean much for these patients.

If hospitals don’t provide sufficient context to their pricing and why patient fees might be significantly lower than what’s listed, some people may not get care out of fear of the prices posted online.

“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,” Tom Nickels, executive vice president for government affairs and public policy at the American Hospital Association, told Modern Healthcare.

Los Angeles Community Hospital adds a disclaimer to its pricing page noting patients may pay lower prices than what’s listed for those who have insurance. It offers a phone number for the hospital’s financial counseling resources for help estimating out-of-pocket expenses.

Price lists may come in handy for patients if they end up in an out-of-network hospital, health economics researcher Benedic Ippolito told The Atlanta Journal-Constitution. It could be a step toward reducing or eliminating “surprise billing.”

When people use a hospital not covered under their insurance, the insurance company doesn’t typically cover as much of the cost as it would for an in-network hospital. When this happens, hospitals use balance billing.

Balance billing, or surprise billing, is when a provider (hospital) bills you for the difference between what your insurance company covered and the cost of the medical service or procedure. Surprise billing can also include separate charges for services from doctors who are out-of-network for a patient but work in an in-network hospital.

In its April 2018 statement, CMS said it was interested in stopping “surprise billing” and providing patients information up-front about out-of-pocket costs to increase price transparency. Pricing transparency may also benefit patients indirectly. CMS stated the regulation could foster competition between hospitals, which may drive prices as much as 40 percent lower.

Patients who are aware of costs up-front may be able to find another hospital or provider who is in-network or is less expensive before they’re given care. This, of course, only works if the patient is able to compare pricing and other cost coverage factors ahead of time when they’re not in need of emergency services.