It is commonly understood that hospital pricing is a mess, a topic that I have blogged about frequently in the past (see: Two Reasons Why Medical and Hospital Bills Are Such a Mess; High Deductible-Health Plans Causing Hospital Billing Problems; Coding for Hospital Services; One Reason for the High Cost of Healthcare). CMS has been trying to alleviate this problem, at least in part, by requiring hospitals to post their price lists on-line (see: Hospitals may soon have to post prices for patients online). Below is an excerpt from the article:
Hospitals may soon have to post their standard prices for patients online, under a proposed rule unveiled Tuesday by the Trump administration. Also, the administration is seeking comments on how to stop so-called surprise billing ...and how to give patients better information about the out-of-pocket costs they will face....The proposed rule is...[CMS's] latest effort to give patients more information about the cost of health care and about their own medical history so they can better direct their own care. The guidance -- part of the annual update to Medicare payment policies -- applies mainly to Medicare patients and providers, but officials expect it will influence practices across the nation's health care system. It would take effect in 2019. The posted prices, however, may not reflect the actual amount most patients pay since insurers and the government negotiate different rates and often cover a major portion of the bill....Hospitals are already required to provide either a list of their standard charges or their policies for allowing the public to view the prices. Trump officials want hospitals to post this information on the Internet and make it available in a way that third-party app developers can access. In addition, the agency said they were concerned about out-of-network bills, such as those for anesthesiologists and radiologists who work at in-network hospitals, and by facility and physician fees for emergency room visits that come as a surprise to patients.
This requirement by CMS will not solve hospital billing problems overnight because, as noted above, insurers and Medicare negotiate different rates with hospitals. However, there are a couple of points in the article that give some reason for optimism. The first is that making hospital prices available on-line may encourage third-party app developers to provide some meaningful price data to Medicare patients receiving services from a particular hospital. Also important is that CMS is investigating "surprise" out-of-network fees. These ofter are for the services of anesthesiologists and radiologists as well as facility fees charged for ER visits. Here is a brief description of out-of-network fees copied from the web site of Blue Cross of Michigan (see: What’s the difference between in network and out of network?) :
When a provider joins our network, they agree to accept our approved amount for their services. For example, a doctor may charge $150 for a service. Our approved amount is $90. So as a Blue Cross member, you save $60. On your claims and explanation of benefits statements, you’ll see these savings listed as a discount. Doctors or hospitals who aren’t in our network don’t accept our approved amount. You’ll be responsible for paying the difference between the provider’s full charge and your plan’s approved amount. That’s called balance billing.
Additionally, here's a description of ER facility fees (see: Emergency rooms are monopolies. Patients pay the price.):
There are 141 million visits to the emergency room each year, and nearly all of them (including Saifan’s) have a charge for something called a facility fee. This is the price of walking through the door and seeking service. It does not include any care provided....[T]here is...wide variation in how much hospitals charge for these fees, raising questions about how they are set and how closely they are tethered to overhead costs. Most hospitals do not make these fees public. Patients typically learn what their emergency room facility fee is when they receive a bill weeks later. The fees can be hundreds or thousands of dollars....[Vox] found that the price of...[facility] fees rose 89 percent between 2009 and 2015 — rising twice as fast as the price of outpatient health care, and four times as fast as overall health care spending.