New rules mean hospitals must post prices, but few do

MEMPHIS, Tenn. – A national advocacy group found that only one South Central hospital was fully compliant with new federal rules on healthcare price transparency.

The new federal law requires hospitals to be more transparent about pricing by displaying the numbers in various capacities.

Lack of compliance could leave patients confused and at risk.

Jackie Tillman is one patient who could have benefited from the new rules. She needs knee replacement surgery and recently visited Methodist University Hospital for imaging.

She didn’t know in advance how much the MRI would cost.

“I’m sure it was pretty high,” she said.

They charged him $2,500. She had no insurance.

This led her to the conclusion that she might never even have had the MRI in the first place.

But in 2021, the federal government started requiring hospitals display prices in a list of “purchasable services” so that patients can view costs in advance and compare different facilities.

“This is a first because it puts consumers in the driver’s seat,” said Cynthia Fisher, founder of PatientRightsAdvocate.org, a group that lobbies for price transparency in healthcare.

His group found that less than six percent of hospitals nationwide complied with the new rules.

“This is just a small part of the very beginning of getting this data out there so we can all buy healthcare like we do airlines,” she said.

She pointed to travel shopping sites like Priceline and Kayak that show the future potential of price shopping for healthcare. Under new rule, hospitals must post machine-readable files like that which show prices for all standard hospital charges.

But until those sites exist, consumers must rely on hospital systems to search for themselves; there are 70 “purchasable services” as defined by the federal government, such as MRIs, blood tests, and labor and delivery. Hospitals are supposed to display them so that any patient can check their bill. But most hospitals claim to comply by offering “price estimation tools” that are often difficult to use.

Pricing tools

For those with insurance, you often need to provide personal information such as your name, date of birth, and policy number to get an estimate.

It’s against the law and helps hospitals collect data, Fisher said.

“They can’t see how their insurance plan compares to the price of all the other insurance plans covered at this hospital. So it creates more shadows and collects a lot of patient data,” she said.

Instead, she said the information should be presented clearly so patients can compare all plans.

His group found that only one hospital in the Mid-South, Baptist Collierville, fully complied with the new regulations.

“What they did differently from non-compliant hospitals was they displayed all of their prices: discounted cash prices as well as all negotiated rates by each payer and each plan,” Fisher said.

Tools and how they work

Methodist Price Estimator asks you to choose your hospital, indicate if you have insurance, date of service, and then provide the exact code or name of the procedure. We found it difficult to use, as we couldn’t find certain procedures, such as labor and delivery.

St. Francis Price Estimator asks you to indicate if you have insurance. If so, it will ask for your personal insurance information and won’t let you continue without it. If you don’t have insurance, the tool is user-friendly and provides a very broad cost estimate. For example, for a “normal delivery,” he gave an average of $21,000, with a minimum of $4,000 and a maximum of $52,000.

One-Price Regional Estimator provides a spreadsheet of cost estimates per procedure for each health insurance company. If you don’t have insurance, navigate to your procedure category, then scroll down to select “self-pay/uninsured”.

Baptiste “Estimate my costs” includes a generalized expense navigator and a patient estimator, which requires more personal information. The tools provide detailed information to patients who have insurance and those who do not. The Expense Navigator does not require any personal information. The tools give slightly different estimates for similar services.

An example

Jackie Tillman underwent a knee MRI at Methodist University Hospital. In her case, she had no insurance. We tested the hospital price navigator tool to figure out how much they would charge him today. To use the tool, you need to know the category of the service you are looking for, then the exact code or name, which can be tricky for the average patient; there are approximately 60 types of MRIs listed. None of them were for the “knee”. A health care provider might know the real name of a knee MRI, but the average person would have to make an educated guess. We chose “lower extremity MRI without dye” for the left side and got Tillman’s estimate of nearly $5,000.

To compare, we followed the same process in each of Baptist’s navigation tools. For a patient without insurance, one of the tools estimated it would cost $732, while the other estimated it would cost just under $700.

When we asked Methodist officials about the high estimate, a spokesperson told us we had helped them identify a problem in the system where it was not showing discounted prices for uninsured patients. They said the tool would soon be updated to reflect the lower amount if patients pay cash.

And after?

“Get rid of price estimating tools. These are not real prizes. Get every hospital to let us all know before we receive care how much our care costs,” Fisher said.

In a statement to WREG, the Centers for Medicare and Medicaid Services acknowledged this issue and said they were stepping up enforcement of the new policy by increasing fines to a potential $2 million per year for hospitals.

WREG asked the Baptist, Methodist, St. Francis and Regional One hospital systems for interviews on this topic, but all four declined our request and referred us to their websites.

Methodist issued the following statement to WREG:

At Methodist Le Bonheur Healthcare, our mission to provide cost-effective, high-quality care to each of our patients extends beyond medical treatment to being completely transparent about patient costs. Our gross charges are displayed in line with our financial aid policy. Patients are also encouraged to use our online price estimator for an accurate estimate of their financial responsibility for desired medical services. We encourage patients who may need assistance with their medical bills to contact our Patient Financial Services team at 901-542-5327 or 901-842-1255.

Baptist made the following statement to WREG:

Baptist supports price transparency and is committed to educating and advocating for our patients and providing quality, value-based care. That’s why Baptist created its price transparency tool, Expense Navigator, more than 14 years ago, when nothing else existed to provide meaningful price information to patients. Expense Navigator helps patients understand hospital charges, their out-of-pocket or co-payment expenses, and payment options, including how to access Medicaid or charity care. Baptist recommends that patients use our Expense Navigator tool (https://www.baptistonline.org/estimate-my-costs) or consult with our enrollment staff or their insurance carriers for pricing information or comparison shopping. Baptist has a generous charitable care program and offers additional discounts for uninsured and underinsured patients. These financial assistance policies can be viewed on our website, in our registration areas, and on our patient statements.

As technology and federal rules change, Baptist will continue to work to advance price transparency for patients, which we have recently demonstrated through our compliance with federal government price transparency rules that have entered effective January 1, 2021. According to MedCity News and The Washington Post, Baptist is among only 5% of hospitals nationwide to fully comply with the federal price transparency rule (https://medcitynews.com/2021/07 /only-5-hospitals-are-compliant-with-price-transparency-rule-here-is-how-they-did-it/). Our goal is to provide meaningful and useful information to patients, and we encourage any patient who has questions about the cost of their care to contact us directly.

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