[A] new federal regulation requires hospitals to make their prices more accessible, but some say the information is of limited use to consumers in its current form.
As of Jan. 1, the Centers for Medicare and Medicaid Services mandated all U.S. hospitals to list their standard charges online in a specific format and to “update this information at least annually.”
CMS Administrator Seema Verma says the new rule is a “historic change” that “gives patients more information than they’ve ever had before about the services provided by their local hospitals.”
All of Vermont’s medical hospitals appear to have complied with the new rule. But the average Vermonter may not be able to do much with that information, because standard charges bear little relation to what consumers actually pay due to variances in insurance plans and insurer/hospital contracts.
“Inaccurate information does not lead to more transparency,” said Mike Fisher, the state’s chief health care advocate.
CMS announced the pricing-rule change in August, and it took effect Jan. 1. On Thursday, Verma had a conference call with reporters to explain her agency’s rationale.
As health care costs “continue to skyrocket,” Verma said, “price and quality transparency in health care is one of the top priorities for CMS and the Trump administration.”
CMS already had required hospitals to make their standard charges public. But the new rule says those charges must be online and in a “machine-readable format” that makes it easier for consumers to gather and compare the data.
Verma said she believes giving more cost information to consumers could boost competition, leading to price reductions and quality improvements.
“Unlocking cost information is critical to enabling patients to become active consumers,” she said.
At this point, there is no penalty for hospitals that don’t comply. But Verma said CMS has sought information from the public about ways to improve hospital-pricing regulations, and she said enforcement will be addressed in future rule-making.
“We’ll continue to look at this issue,” Verma said. “This is just really a beginning of a conversation around price transparency.”
So-called “chargemaster” pricing information is now available on the websites of all 14 Vermont hospitals. But many hospitals also are taking pains to point out that consumers shouldn’t take the prices to heart.
“Standard charges are the same for all patients, however financial responsibility may vary based on a patient’s individual medical insurance plan as well as our organization’s contracts with insurance companies,” Central Vermont Medical Center administrators wrote on their pricing page. “Uninsured or international patients may be eligible for discounts.”
Michael Del Trecco, finance and operations vice president for the Vermont Association of Hospitals and Health Systems, said the Montpelier-based organization has counseled hospitals on how to comply with the CMS rule and also on how to avoid confusion.
Standard charges are “like a sticker price on a car,” Del Trecco said. The problem is that, “in Vermont, no one pays that sticker price,” he said.
Verma acknowledged that issue. “We understand that it’s more complex than just putting out the (hospital-pricing) information,” she said.
“We still believe it’s an important first step, and there’s no reason hospitals can’t do more,” Verma said.
But both Fisher and Del Trecco questioned whether hospitals alone could provide enough documentation to accurately show a patient’s costs. They said consumers also have to consider the nuances of their insurance plans, including deductibles and co-insurance payments.
Posting standard charges “shows the willingness and the opportunity for transparency … but it lacks the necessary information for a patient to say, this is what we ultimately will pay out of pocket,” Del Trecco said.
Fisher said the newly available data could provide opportunities for further analysis and comparison of hospitals’ basic charges.
“For those who are interested in doing that, I suppose there’s some value,” he said. “But for the average consumer, it doesn’t really make sense.”
