If you buy a car, you know how much you’ll pay before you sign the loan application. If you buy groceries, you know what they cost. But hospital bills are different. They’re confusing and expensive, and decisions have to be made fast, sometimes in the middle of an emergency.

The Trump administration tackled the problem. A 2019 executive order was upheld in court this summer, forcing hospitals and insurers to release their negotiated prices for services. 

Will it help?

The why

The idea behind the order was that if people knew the actual prices, they’d make informed decisions before they commit to open-heart surgery or a hip replacement. It’s basic capitalism. They’ll be able to pick the affordable lab to test their blood. There was a chance that sheer transparency would push prices down.

The finalized rule, issued in October, emphasizes that health insurers will list their privately-negotiated rates between the companies and health care providers, drug manufacturers and device makers.

We patients are now in with the cool kids. We’ll understand everything and make better health care decisions. Right? Right?

The complexities

When the initial order, aka the “Executive Order on Improving Price and Quality Transparency in American Healthcare to Patients First” landed, hospitals began posting their chargemasters: the costs of procedures, services, drugs, tests and fees for services, according to www.revcycle
intelligence.com.

But those prices have little to do with actual prices charged, said Health Affairs.

Insurance companies negotiate costs down. Medicare and Medicaid pay prices set by the government. The only patients who might have to pay the chargemaster prices are the uninsured. (If you’re one of them, check with your hospital. There might be help for you.)

It can still be a problem. “List prices can pose a heavy burden for the uninsured, who can—despite hospital assistance programs—be hit with hefty bills,” according to a 2017 story in Healthcare Finance by Kaiser Health News. “Increasingly, even insured patients have been exposed to these high charges when they unwittingly go to an out-of-network provider and receive a surprise medical bill.”

And it’s all irrelevant if you’re standing in line at the hospital while a family member is in the ER. You have to make decisions quickly, and it’s easiest to just say yes. There’s no time to shop for the best prices.

Protests all around

“We are committed to making health care more affordable for every American, but the approach in the rule is flawed,” said Matt Eyles, president and CEO of America’s Health Insurance Plans, in a statement.

Eyles argued that the final rule “will work to reduce competition and push health care prices higher, not lower, for American families, patients and taxpayers” because disclosing the rates will reduce the incentive to offer lower rates. It would “creat[e] a floor, not a ceiling, for the prices that drug makers, providers and device makers would be willing to accept.”

The American Hospital Association is appealing, arguing that this adds more strain in the middle of a pandemic. “Under the final rule, hospitals will be required to publish their standard rates online in a machine-readable format. Also, they will need to create at least 300 shoppable services, including 70 services [that] are selected by Centers for Medicare & Medicaid Services. Hospitals have stated that complying with this rule will put an administrative burden on them [that], in turn, will increase costs for patients,” said the National Law Review.

So what does that mean here?

Back in court means more delays.

It means reach out to someone if you’re confused.

Our local hospitals will work with patients. Outreach coordinators will explain insurance and all its out-of-pocket costs. Said Lisa Champeau, manager of public relations and marketing at Honesdale’s Wayne Memorial Hospital, “Wayne Memorial Hospital is a nonprofit community hospital—emphasis on community—and we believe in transparency and openness with our ‘customers’ —that is, our patients—in the community we serve.”