Ethan Rhodes
Hospitals have long operated in a system where commercial insurers and the government are the primary payers of medical services. This has resulted in a lack of transparency around pricing, with hospitals often not disclosing prices upfront for medical procedures. However, patients have a right to know the cost of treatment before receiving it, and hospitals are now facing increasing pressure to provide price transparency. The Hospital Price Transparency Rule requires hospitals to disclose standard charge information on their websites, but hospitals can avoid this by using cost estimator tools that only provide estimates. Patients can file complaints against hospitals that do not properly post their prices, and there is ongoing work to improve price transparency in the healthcare industry.
| Characteristics | Values |
|---|---|
| Hospitals tell prices upfront | No, but hospitals are required to disclose standard charge information for all items and services on their website. |
| Action if hospital does not disclose price | Patients can submit a complaint to the Department of Health and Human Services (HHS) or CMS. |
| Reasons for not disclosing prices upfront | Hospitals have argued that charge data is meaningless as they do not reflect the discounted rates medical centers negotiate with private insurers. The complexity of the US medical system and the involvement of insurance companies also make it difficult to provide upfront pricing. |
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What You'll Learn
Hospitals must list prices on their websites
Patients should be aware of their right to know the price of hospital treatments and demand that information. As patients, control over health and wellness, both physically and financially, should be in their hands. Hospitals already have the data digitally and can quickly post their prices for all to see. However, hospitals can avoid consumer-friendly requirements by implementing a "cost estimator" tool that only gives an estimate and not a real price. This makes it difficult for patients to shop based on price and quality.
The Hospital Price Transparency Rule requires hospitals to disclose all standard charge information for all hospital items and services on their websites. This consists of two price lists of consumer-friendly displays of common shoppable services that are easily accessible and in a comprehensive machine-readable format. The first list is meant for data analysts to track pricing over time, for employers to choose the best plan, and for tech innovators to create tools to help. The second requirement is a list of the hospital's 300 shoppable services with the five standard charges to allow consumers to shop based on price and quality.
While hospitals are posting procedure costs online, consumers say price tags can still be hard to find. For instance, at an Atlanta hospital, patients have to scroll to the bottom of the homepage to find a "Price Transparency" tab, which houses the hospital's cost-estimator tool. However, patients are required to put in insurance information to access the tool, and patients without insurance cannot access pricing information. In another instance, on a New Mexico hospital's website, the information was difficult to find, as it was located at the bottom of the page under an "About your insurance" tab.
If a hospital does not properly post their prices, patients can submit a complaint to the Department of Health and Human Services (HHS) or CMS. They should also call the hospital, inquire about the price, and inform them that they will be reporting them for non-compliance. Enforcement actions are exceedingly rare, and CMS's website lists monetary penalties against only 27 hospitals in the four years since the requirements began.
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Patients can demand upfront pricing
Patients can also compare prices with other hospitals in their area based on their budget. If a hospital has not posted its pricing information online, patients can submit a complaint to CMS or the Department of Health and Human Services (HHS). Patients should also call the hospital, inquire about the price, and inform them that they will be reporting them for non-compliance.
The Hospital Price Transparency Rule requires hospitals to disclose all standard charge information for all hospital items and services on their websites. This consists of two price lists of consumer-friendly displays of common shoppable services that are easily accessible and in a comprehensive machine-readable format. Hospitals can avoid this requirement by implementing a "cost estimator" tool which only gives an estimate and not the real price.
Seeing prices upfront gives patients the power to shop, choose the best care at the right price, and not be surprised by unexpected bills. Patients can also negotiate with hospitals and use lower-priced options as leverage.
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Hospitals can face penalties for non-compliance
Patients have the right to know the prices of hospital services and demand that information. The Hospital Price Transparency Rule requires hospitals to disclose on their website and make public all standard charge information for all hospital items and services. This consists of two price lists: hospital standard charges for all items and services, and a list of 300 shoppable services with five standard charges to allow consumers to shop based on price and quality.
However, hospitals can avoid this requirement by implementing a "cost estimator" tool that only gives an estimate rather than the actual price. If a hospital does not properly post its prices, patients can submit a complaint to the Department of Health and Human Services (HHS) or CMS. CMS audits hospitals and investigates complaints, and hospitals may face civil monetary penalties for non-compliance. These penalties have increased over time to encourage compliance. For instance, non-compliance penalties increased from $109,500 per year in 2021 to a mean of $510,976 per year in 2022. In 2022, the Centers for Medicare & Medicaid Services (CMS) increased financial penalties for non-compliance from $300 per day per hospital in 2021 to a range of $300 to $5,500 per day in 2022.
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Patients can compare prices and negotiate
Patients can take several steps to compare prices and negotiate medical bills. Firstly, it is important to start the process early, as it is much more challenging to negotiate payment terms when the due date is close. Patients can request an itemized bill from their healthcare provider, which provides a detailed description of the services received, including medical billing codes. This makes it easier to identify any errors or inflated charges, which are common in medical billing.
Patients can also compare prices between hospitals in their area and negotiate based on their budget. They can use online tools, such as cost estimators, to estimate the cost of a medical procedure and identify hospitals with more affordable options. Additionally, patients can negotiate directly with the hospital billing department, even without insurance. By using well-researched numbers and knowing the prices that insurance companies would typically negotiate, patients can request that the hospital honours a discounted rate. Many hospitals may agree to lower costs if patients agree to pay the discounted amount immediately.
Furthermore, patients can negotiate their bills before receiving treatment for planned procedures or scheduled medical services. They can obtain an estimated cost from their medical provider and present this to their insurance company to determine their out-of-pocket expenses. With this information, patients can then discuss payment options with the hospital's billing office. Patients should also be aware of their rights to price transparency. Hospitals are required to disclose their standard charge information for all items and services on their websites, allowing patients to access this data and make informed decisions.
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Billing errors and overcharging are common
In the US, federal laws mandate that all medical providers transparently publish their fees, allowing consumers to check the reasonableness of charges compared to other local hospital systems. This is further enforced by the Hospital Price Transparency Rule, which requires hospitals to disclose all standard charge information for items and services on their websites. This includes a list of 300 shoppable services with five standard charges to allow consumers to shop based on price and quality.
Despite this, billing errors and overcharging are common. A 2016 report by Becker's Hospital Review found that 80% of American medical bills contained errors, which can result in overcharging by hundreds or thousands of dollars. Surprise hospital bills and bogus charges are also more common than one might think. For example, a patient was charged $55 for saline spray that his wife never received, and his son was billed nearly $3,500 for one night in the NICU and an additional $2,226 for another night in a regular room. Another patient was charged $7,000 for a delivery room, over $4,000 for a doctor who wasn't even present at the birth, and $25 for two Tylenol.
There are several reasons why billing errors occur. The medical billing system is complicated, with nearly 70,000 diagnosis codes and over 71,000 procedure codes. A simple mistake in coding can lead to significant overcharges. Conflicting communication between insurers or different contracts with employers can also result in errors.
Consumers can take steps to protect themselves from billing errors and overcharging. Firstly, they can price shop by calling hospitals to compare costs before undergoing a procedure. Secondly, they can request an itemized bill to identify any errors or unexpected charges. If a problem is found, consumers can push back by contacting the hospital billing office and, if necessary, submitting a complaint to the Department of Health and Human Services (HHS) or CMS for non-compliance with price transparency requirements. Additionally, consumers can use tools like FAIR Health Consumer to obtain price estimates for medical procedures based on their location.
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Frequently asked questions
Not always. Hospitals are working towards providing better transparency, but currently, prices for procedures can remain opaque.
Hospitals have long argued that charge data is meaningless because it does not reflect the discounted rates medical centres negotiate with private insurers or the fee schedules used by Medicare and Medicaid programs. Additionally, the US medical system is a complicated set of contracted services and discounts, and medical professionals often don't know the cost of treatment themselves.
You can refuse treatment until you get cost information. You can also submit a complaint to the Department of Health and Human Services (HHS) or CMS if it appears that a hospital has not posted its prices online.
You can go to a hospital's website and look for their price list or price estimator tool. If you cannot find this information, you can search "cost estimator", "price estimator", "price transparency", or "standard charge data" in the website's search bar. You can also call the hospital and inquire about the price.
The Hospital Price Transparency Rule requires hospitals to disclose on their website and make public all standard charge information for all hospital items and services. This includes two price lists: a list of the hospital's 300 shoppable services with the five standard charges, and a list of hospital standard charges for all items and services.
