If you're scheduling a surgery or screening this year, break out the calculator along with your calendar.
Under a federal rule that took effect on New Year's Day, all U.S. hospitals are required to publish online price lists containing average costs for 300 common procedures, and patients can now obtain cost-sharing estimates from their health insurance company before going under the knife.
The rule, CMS-9915-F, was developed in response to President Donald Trump's June 2019 executive order requiring improvements in health care price transparency. Hospitals fought the reform tooth and nail, but the U.S. Court of Appeals for the District of Columbia Circuit upheld the rule Dec. 29, dismantling the flimsy arguments against disclosure in a masterful 25-page opinion.
Consumers can now comparison-shop for routine services like colonoscopies and determine roughly how much they'll be charged after insurers pay their share, reducing the phenomenon of surprise billing that leaves patients powerless and often penniless.
About a third of American workers have medical debt, and 54% of patients in arrears say they've defaulted on their bills, according to a 2020 Salary Finance survey. A March 2019 paper in the American Journal of Public Health cites medical issues as the No. 1 reason for new bankruptcy filings.
That isn't a shock to anyone on a tight budget whose needs go beyond an annual checkup. Health care is the only service where you assume responsibility for a debt without knowing its amount. Price secrecy eliminates hospitals' need to compete for patients' business, driving up the direct costs that appear on your ballooning bills and the indirect costs passed along to taxpayers and insurance enrollees.
Transparency will help businesses and government agencies as much as patients, allowing health plan administrators to research the rates hospitals hammer out with insurance companies. Those figures were a closely guarded industry secret.
Just ask North Carolina State Treasurer Dale Folwell, who's been on a crusade for clear pricing since a summer 2018 attempt to audit the state's billings from Blue Cross Blue Shield. A public records request for the insurer's University of North Carolina Health Care System contract yielded a useless document with more redactions than a Pentagon memo, black rectangles obscuring nearly every page.
"This court decision gives us a real path forward to getting rid of secret contracts and pushing the power down to the consumer to make informed decisions when purchasing health care," Folwell said.
The American Hospital Association sued Health and Human Services Secretary Alex Azar to block the transparency rule. A federal district judge granted a summary judgment for the defendant, which means the claims were too weak to merit a hearing. The appeals court delivered another defeat, but the trade group's anti-patient advocacy continues.
Executive Vice President Tom Nickels told Kaiser Health News that the AHA plans to lobby President-elect Joe Biden's administration to modify the final rule. While the health care industry swings a big stick in Washington, rolling back price disclosures conflicts with the Affordable Care Act's mission to demystify hospital charges.
Then-President Barack Obama's signature 2010 health reform included a disclosure requirement, but a corresponding federal rule made that ineffectual by allowing hospitals to publish chargemasters — lists of inflated sticker prices that bear little relationship to what patients actually pay — in lieu of calculated averages.
For all his criticism of Obamacare, the outgoing president strengthened a piece of his predecessor's best-known legislation. Biden can't countermand Trump on transparency without betraying Obama.
Rulemaking is a lengthy process under the Administrative Procedure Act's notice and comment provisions, so public hospital pricing won't disappear overnight. You can increase its chances of survival by putting the new disclosure rule to work for your family.
Visit local hospitals' websites and take a gander at the price lists. If they're absent, ask hospital executives to post them. That shouldn't require much persuasion, as CMS-9915-F is in effect and the Centers for Medicare & Medicaid Services begins compliance audits this month. The agency accepts complaints online.
For non-emergency care that can be scheduled in advance, review prices for several hospitals within driving distance and contact your insurance company for cost-share estimates. You might be surprised how much you can save.
Corey Friedman is an opinion journalist who explores solutions to political conflicts from an independent perspective. Follow him on Twitter @coreywrites. To find out more about Corey Friedman and read features by other Creators writers and cartoonists, visit the Creators webpage at www.creators.com.