Hospitals Must Now Share Their Costs

A recent Centers for Medicare and Medicaid Services order states that hospitals must now be transparent with their charges to consumers. The new law, that went into effect on January 1, 2019, requires all U.S. hospitals to share their entire services price lists on their websites in a machine-readable format. These new lists are called “chargemasters.”

The goal is for consumer transparency and offering consumers a choice of healthcare providers, while forcing health care providers into price competition and holding them accountable.

The new policy change is not without issues. Hospital prices are often over inflated and are starting points of negotiations with the government, private insurers and even the consumer. Often Medicare, Medicaid and private insurers pay predetermined rates for services. Does the patient have any deductibles? Are they using services that are in-network or out of network?

For consumers there is confusion on where to find the data on the website, what the procedure or services really is or entails, how much that procedure or services costs, and which health care facility offers the best price option for the same service.

Many in the industry hope this can be a good first step leading to real transparency with actionable, usable information, but it will take some time for it to be used as a meaningful tool by consumers. There are a lot of inconsistences in pricing and services. Consumers are forced to look through and try to interpret data of thousands of procedures, which often can be daunting. Then, having the same consumer try to compare that data with a competing hospital is nearly impossible. Prices, names and definitions are not the same for procedures, drugs, services, medical devices, etc., at these hospitals.

Hospital officials believe a standard definition of services is needed so patients can make accurate comparisons between hospitals. In some instances, hospitals are posting disclaimers warning consumers not to rely on the data and to inquire with that specific hospital for more details. The new law does not define the standards and leaves it to the hospital’s discretion. Also, while required to participate, there are no enforcement mechanisms in place to ensure the hospitals are following the new law or to enforce it.

Until the issues are ironed out, consumers should always ask their hospital what their out-of-pocket costs will be (get a quote) and consider talking with a patient advocate about adjusting your bills.