Hospitals must now post their prices online. How consumers can benefit

You may know a common quirk of health insurance coverage: not knowing the cost of services until after the fact.

A new price transparency rule that went into effect on January 1 is an effort to change that.

Basically, hospitals are now required to post online, in a user-friendly format, the rates they have negotiated with insurers for 300 common medical services.

“This information has been quite obscure to the public,” said Nisha Kurani, senior policy analyst at the Kaiser Family Foundation.

However, change is not without challenges, including a lack of public awareness, Kurani said.

And what might be more useful for health care consumers – the amount they would pay out of pocket based on these prices – is a few years away. At this point, a recently finalized rule that will take effect in 2023 will require insurance companies to post their negotiated rates with providers, as well as the estimated patient cost for a variety of services.

“Seeing the rates negotiated by the payer can be helpful, but in general what is most helpful is patient cost sharing,” Kurani said.

Outside of Medicare and Medicaid, there is little to no price regulation in the private insurance market, which includes employer-sponsored plans and those available in the federal (or state) market. This means that the ultimate cost to consumers for a given service can vary wildly before you even consider things like deductibles and insurer co-payments.

For example, the average cost negotiated by large employer plans with insurers for a lower back MRI in 2018 was $ 1,106 in the Houston area, compared to $ 404 in Las Vegas, according to data tracked by Kaiser and the Peterson Center on Healthcare.

In Baltimore – in a state (Maryland) where regulators set the prices hospitals can charge for services – the average cost of a hospital stay for a full knee or hip replacement is around $ 25,000. That compares to over $ 55,000 in the greater New York City area. The national average is around $ 35,300.

With the rule that is now in effect, the idea is that consumers can shop for the best price on a service they need. Of course, they would usually still have to figure out what their share would be.

Of the 300 services that should be included in consumer friendly information, 20 are mandated by the Centers for Medicare & Medicaid Services. The other 230 can be determined by each hospital.

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“The rule requires that the cost of the service be grouped together in a way that makes sense for those services … so that consumers do not seek out, for example, the cost of a swab,” Kurani said.

Of course, many medical services in hospitals are not planned. Also, even if you plan a service or procedure in advance, you should visit the website of each hospital you want to compare. And it’s usually up to everyone to decide exactly how to display the information, as long as it’s user-friendly.

“There aren’t a lot of specifications on how it should be presented,” Kurani said.

Still, she said, the pricing information could be helpful if you want to shop. The challenge can be finding the information for a given hospital.

Kurani visited more than 100 websites last year to compare the costs of Covid testing at various hospitals across the country.

“Some websites had the information in advance, others had it easily accessible under their billing and insurance pages, but for others it was harder to find and I had to dig for it. “she said.