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Hospitals now must list medical costs for patients, but clarity is elusive

The newly listed costs for hospital procedures may -- or may not -- be what you'll really pay.

By
Daniel Uria
doctors in surgery operating room. photo by torwaiphoto/shutterstock
doctors in surgery operating room. photo by torwaiphoto/shutterstock

Jan. 16 (UPI) -- A Trump administration order requiring hospitals to publicly list their prices took effect this month, but the move, aimed at providing transparency, may be causing more confusion than clarity.

As of Jan. 1, the new federal law requires all medical centers to publish a list of all standard charges for hospital items and services and update it once a year, based on a provision in the Affordable Care Act that hadn't been previously enforced.

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Hospitals had previously been required to make their list of standard charges available upon request, but the Centers for Medicare and Medicaid Services updated its guidelines in August requiring hospitals nationwide to post the information online in a "machine-readable" format, like a Microsoft Excel file.

"By requiring hospitals' price information to be online in a machine-readable format, meaning the data could be imported into other documents, we hope to make it easier for patients to access & compare at least basic information about costs at various facilities," CMS Administrator Seema Verma wrote on Twitter.

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Some patients, hospital authorities and medical experts, though, are questioning whether the available prices are truly giving patients an accurate picture of medical costs -- or are having a negative effect by making the cost seem higher than it is.

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What changed?

The guidance that went into effect on Jan. 1 required U.S. hospitals to publish a chargemaster -- a list of medical items and procedures and their prices -- online for the public to view.

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Michigan will require its hospitals to publish these documents for the first time under the new policy, making public what some say are business documents.

"Really, the chargemaster is, and always has been, a business-to-business communication," Laura Wotruba, director of public affairs at the Michigan Hospital Association, told UPI. "It contains the baseline pricing for every kind of procedure and service in a hospital, so they're fairly complex documents."

Verma expressed an interest in providing a more retail-like experience for patients by requiring this information be made public.

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"If you're buying a car, or pretty much anything else, you're able to do some research. You're able to know what the quality is. You're able to make comparisons. Why shouldn't we be able to do that in healthcare? Every healthcare consumer wants that," she said.

John Romley, an economist and associate professor at the University of Southern California, said the newly available price lists are kind of like the sticker price on a new car.

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"They're the sort of list prices for various healthcare services. Think of when you go to a car dealership, there's the MSRP, now that's not necessarily what you pay, but that's the list price," Romley told UPI.

Romley noted, however, that the gap between the list price and the actual price for hospital services is "much, much larger" than it is for cars or electronics, due to insurance.

"Insurers negotiate deals with hospitals and they typically pay maybe 30 cents on the dollar in relation to that list price, so that's a very big discount in relation to the MSRP," he said.

Romley said chargemasters are "highly variable" and can differ widely for both price and presentation from hospital to hospital. They can also be confusing to those unfamiliar with medical procedures or jargon.

For example, the University of California San Francisco's chargemaster lists nearly 1,000 procedures -- including a "simultaneous pancreas/kidney transplant" listed at $772,231, and "hypertensive encephalopathy w MCC" for $228,955.

George Washington University Hospital in Washington, D.C., lists a kidney transplant for $301,651 -- and more difficult to decipher items, like "INJ,ANE AGENT,INTERCOS SNGL" for $1,399.

A step, but not a solution

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In the two weeks since the federal law was enacted, vague guidelines for how hospitals present the pricing information has led to confusion.

"These spreadsheets, if you can actually find them on the sites -- and that's not always a given -- you download them and it's incomprehensible," Jeanne Pinder, CEO of Clear Health Costs, a consumer health research organization seeking transparency in the healthcare market, told UPI. "A lot of the things that are here are just not things that cross our paths."

Hospitals were not given any specific guidance about where they must post the information -- so while some price lists can be found through a simple web search, others like George Washington University's require users to check off a series of disclaimers before viewing the file. Additionally, individual hospitals were given a choice whether they want to provide any information beyond the minimum requirement.

A November poll by the Preferred Medical Marketing Corp. surveyed 150 healthcare participants and found 43 percent were unsure how to comply with the mandate. Twenty-nine percent said they'd post additional pricing information and less than a quarter said they'd post only base chargemaster prices.

The new law also didn't require hospitals to list costs in a uniform manner, making it difficult to draw direct comparisons.

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"They're all using different lingo and different categorization systems so you can't really decide you're going to put them all together and make a spreadsheet," Pinder said.

Even if a patient can decipher the information, the figures represented there may not present an accurate picture of what they will really pay.

"The intent of that document has never been to inform consumers about the price of their care, nor is it that helpful to that," Wotruba said.

The prices listed by the hospitals, experts said, are most commonly those used in negotiations with insurance companies -- and even if they represented the actual cost, Romley said many hospitals will cut them down for uninsured patients.

"How many people actually pay these prices? I think it's a pretty small number," he said.

Because chargemaster prices are often higher than what average patients would pay, Pinder worries their public availability could have an adverse effect on patients -- by discouraging them from getting needed medical treatment.

"I actually feel like these price lists are harmful, because people look there and decide that that's what it's going to cost them, then they won't get their MRI," she said. "We have a healthcare system that puts people into bankruptcy. It causes them to deny themselves treatment because they think they can't afford it.

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"It causes people to skip a mortgage payment so they can pay for their cancer treatment, have to choose between food and medicine. This is not a solution to that. Not even remotely."

Moving forward

Verma said the process will get better and more refined through trial and error.

"This is a small step toward providing our beneficiaries with price transparency, but our work in this area is only just beginning," she said in a July speech. "Price transparency is core to patient empowerment and making sure American patients have the tools they need so they can make the best decisions for them and their families."

She said hospitals have the ability to provide information beyond what's required in CMS guidelines.

"Hospitals don't have to wait for us to go further in helping their patients understand what care will cost."

Pinder said hospitals can make it easier for patients to decipher the cost of medical care by presenting the information with Current Procedural Terminology, or CPT codes, widely utilized in the medical system.

"I would suggest that all the hospitals and doctor's offices and labs and clinics all make a spreadsheet that uses the same uniform coding system," she said. "There's no reason to bring your own coding system to this unless your idea is to hide things."

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Wotruba said the best solution is simple -- confused patients should ask their healthcare provider, hospital or insurance company what the out-of-pocket costs will be.

"It's really handled on an individual basis because so many people have different health insurance plans," she said. "So, there's not really a one-size-fits-all answer to this issue.

"In all honesty, if there was a simple answer we would have been doing it already."

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