The Problem:
Patients often find themselves unable to know what hospital services will cost them, sometimes even for routine services that hospitals perform dozens of times a day. Hospitals don’t generally make their price information public, instead simply informing patients the cost after providing care. Even when hospitals do publicly post pricing information, it is often not in a form that is easily comparable between hospitals, particularly not for patients. As of January 2021, federal law requires hospitals to post their pricing information, but a majority of hospitals are still not in compliance.[1]
Not only does this create a confusing and frustrating experience for patients, but opaque hospital pricing distorts competition between hospitals in the same region, and hospitals use this lack of transparency to keep prices high.
The Solution:
Partly because of the ineffectiveness of the federal hospital price transparency rule, states should enact requirements for hospitals to list their prices publicly in a consumer- and patient-friendly format. Legislation could require listing prices for the most common procedures on a publicly available website, in language that patients can easily understand, in order to compare between providers. Transparency will allow patients with high-deductible plans in particular to manage their healthcare costs.
Model Legislation:
Indiana’s Senate Bill 5 requires hospitals, ambulatory surgical centers, and urgent care facilities to post certain healthcare services and prices on their websites, and it requires the disclosure to policyholders of commissions, fees, and brokerage fees to be paid in the selling of group health insurance.[2]
The legislation bars the inclusion of a provision in a health provider contract to prohibit the disclosure of claims data to an employer. This is also known as prohibition of the “gag rule” on claims data. The final part of the bill gives the Indiana Department of Insurance (DOI) the authority to request information and proposals for the creation of an all-payer claims database (APCD). That database gives employers and other stakeholders tools to control and analyze healthcare costs through claims data.
Notes
[1] Victoria Bailey, “Only 25% of Hospitals Are Complying with the Price Transparency Rule,” Recycle Intelligence, February 8, 2023, https://revcycleintelligence.com/news/only-25-of-hospitals-are-complying-with-the-price-transparency-rule.
[2] Indiana Senate Bill 5, https://in-proxy.openstates.org/2020/bills/SB0005/versions/SB0005.06.ENRH.