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New Push for Transparent Online Hospital Pricing

August 16, 2018

The Trump administration came out with a new rule that requires hospitals to post online the prices they charge for surgeries and other medical procedures. The hope is that this price transparency will allow patients to shop around for medical needs in a push for “value-based care.”

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Starting January 1, 2019, hospitals will have to post information about prices online. While these prices are currently available to those who ask for them, the new rule will make it a public requirement.

The Washington Examiner reports:

“Previously, hospitals were only required to make the information about prices available to those who asked for it. Even with this requirement, some insurers had agreements that prevented their charges from being shared with patients sometimes resulting in higher co-pays for treatment ‘covered’ by insurance than patients would have paid out of pocket if they had had no insurance.

With the new rule, information about prices must be available online and must be updated every year. The charges posted on the Internet will reflect the “charge master” price or the charge at that hospital.”

The Centers for Medicare and Medicaid Services released a statement noting:

"The agency is considering future actions based on the public feedback it received on ways hospitals can display price information that would be most useful to stakeholders and how to create patient-friendly interfaces that allow consumers to more easily access relevant healthcare data and compare providers.”

The downside to this is that the posted prices will actually be different than what most patients and health insurance companies will pay. Insurers and the government-backed payers (like Medicare) negotiate payments.

The Washington Examiner makes it clear that the bills will be different than the online price listings. The difference between costs and charges will be the reason bills won’t always match.

“Cost is the elusive number of how much things actually cost — the equipment, keeping the lights on, paying doctors and nurses and administrators. Charges, on the other hand, are how much patients are charged for their healthcare costs. The charge is what shows up on bills although it may vary based on insurance providers, Medicare or Medicaid coverage, and a hospital’s negotiated rate.”

While this can be confusing when it comes to actually paying a healthcare bill, it will help patients to know how much the costs are for future medical procedures and long-term healthcare planning.

“Although it won’t reflect what patients see on their bills because of private agreements between insurance companies and hospitals, and it won’t solve the issue of prices varying wildly within cities and within a single hospital, the new rule is a step in the right direction of improving healthcare transparency. It will give both providers and patients a better idea of the charges for medical procedures.”

For more on this story, visit the Washington Examiner.


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