By JC Reindl
Detroit Free Press
WWR Article Summary (tl;dr) As JC Reindl reports, “The new mandate marks an effort by the Centers for Medicare & Medicaid Services to improve price transparency in health care.”
Detroit Free Press
Hospitals across the country rang in the New Year with a federal mandate to reveal their once-secret master price lists, although it’s unclear whether the new requirement will assist many patients or contain ever-rising health care costs.
Starting Jan. 1, hospitals must publish online the starting price tags for every service or procedure. These detailed lists, known as chargemasters, include thousands of entries.
The 2010 Affordable Care Act required hospitals to make these lists available to the public, but until this week, hospitals were not required to publish them.
The new mandate marks an effort by the Centers for Medicare & Medicaid Services to improve price transparency in health care.
However, health care experts stress that consumers, even those with high-deductible plans or even no insurance, should not consider these lists to be realistic price guides.
That is because the prices are typically starting points for payment negotiations between hospitals and insurance companies and have little connection to what most patients actually pay.
The only time that most consumers glimpse chargemaster prices is on hospital bills as amounts they might have owed before insurance negotiated down the price.
“It’s not a particularly useful datapoint,” said Marianne Udow-Phillips, executive director of the Center for Health and Research Transformation in Ann Arbor, Mich. “I don’t expect it to have a significant impact, and I don’t expect it to be a driver of lowering health care costs.”
For patients with commercial health plans such as Blue Cross Blue Shield, the price of services and procedures is determined by private negotiations between their insurance company and the hospital.
So these patients should check with their insurance company for actual pricing information, including whatever deductibles they must pay before insurance fully kicks in.
“If a patient goes online and sees a (chargemaster) price that they can’t afford, I’m concerned that some consumers might forego needed care, especially if that price is the total cost of service and not what the consumer is expected to pay based on what their insurance plan covers or not,” said Mark Fendrick, a University of Michigan professor.
Some uninsured patients may indeed be directly billed at chargemaster prices. But hospitals typically give discounts when requested, experts said.
“The chargemaster itself is essentially the sticker price that nobody pays,” said Jim Lee, vice president of data policy and analytics with the Michigan Health & Hospital Association, an industry group. “It is the starting point or floor for pricing.”