In January of this year, a rule went into effect requiring hospitals to publish their price lists, or charge masters publicly on their websites. The rule applied to all of the nearly 6,000 hospitals in the country.
The idea behind the rule is to give patients the options to choose and price shop for their hospital services between their local hospitals. There are several issues standing in the way of this being a successful or useful move on the government’s part.
One is that we don’t know how many hospitals are actually posting their price lists, or charge masters. Feds admit that they are not enforcing the rule yet and have even asked customers to monitor compliance and report if a hospital they are looking into is non-compliant.
Another is that many hospitals are burying these charge masters deep within their websites, leaving only the savviest of internet users with the ability to even find their price list. Also, many are simply listing the CPT code and price, with no descriptions to indicate what the codes stand for. For billers and coders this is useful, but for the average patient trying to look up their procedure or stay per day, they would be lost.
Lastly, these charge masters only reflect total billed charges, so prices are grossly inflated. The price lists do not take into account negotiated fee schedules with commercial payors, which typically greatly reduces the price of an item.
For example, let’s say there is a radiology procedure that according to the price list is $150. However, the average reimbursement rate between Medicare and commercial payors is between $65 – $80. That also does not take into account patient responsibility like co-pays or co-insurance, depending on their insurance plan. A patient’s actual out of pocket cost may just be a $35 copay. However, there is no way for them to know that based on that $150 charge.
CMS is using this year for recommendations on how to enforce the rule and to allow patients to become accustomed to looking for these price lists. There is even a Twitter hashtag #WheresthePrice for individuals to report non-compliant hospitals. However, this is by no means an ideal rule of enforcement.
CMS may have the right idea in demanding hospitals publish their prices to make the market more competitive; however, they are going to have enlist some additional guidelines for hospitals to make out of pocket costs clearer to patients.