Need a knee replacement and wondering what your out-of-pocket cost might be? Under a new regulation from former President Donald Trump and just enacted by the Centers for Medicare and Medicaid Services (CMS) in January, hospitals must now tell you, as well as prices for other “shoppable” services that can be scheduled, from psychotherapy to routine blood tests.
The rule requires nearly all of the nation’s 6,000 hospitals post detailed price breakdowns on their websites for at least 300 services, 70 of which are dictated by CMS. The rest are left up to the hospitals’ discretion.
But, as with so much of healthcare, the reality of hospital price transparency is complicated.
Hospitals must post five prices for each of the procedures: gross charges; discounted cash prices; the charges they’ve negotiated with insurers and the minimum and maximum negotiated prices. Any hospital that doesn’t comply could face penalties of up to $300 a day.
The reasoning behind the hospital prices rule
The government developed the regulation in the hopes of empowering patients to make smarter healthcare purchases, while encouraging competition among hospitals and insurers that could ultimately push down health costs. But some experts question whether either goal will be met.
“Out-of-pocket estimate tools can be helpful for patients, but even the savviest consumers will struggle to navigate the big data dump required by the rule,” says Ariel Levin, senior associate director for policy at the American Hospital Association (AHA).
That group sued the U.S. Department of Health and Human Services, trying to block the rule by claiming it would encourage health insurers’ anticompetitive behavior, potentially hindering efforts to control costs. The AHA lost in federal court.
According to a Wall Street Journal article, some of the biggest national and regional hospital systems (including Mayo Clinic, HCA Healthcare and New York Presbyterian) have yet to fully reveal their prices.
Complicating the problem for consumers is that interpreting pricing information from hospitals isn’t always straightforward.
For example, if a patient insured by Horizon Blue Cross and Blue Shield goes to the website for Hackensack Meridien Health in New Jersey, clicks on its price estimator tool and searches the cost of a knee replacement at that city’s main hospital, she may find an out-of-pocket cost estimate of zero.
That would seem like good news, until she scrolls down the page and finds that the hospital’s fees for patients without insurance would range from $38,871 to $60,271.
Then there’s a disclaimer saying that people with insurance might have to pay some portion of that cash cost in the form of copays, co-insurance or deductibles, which are not automatically factored into the estimate.
What’s more, the estimate excludes fees charged by the surgeon, who more than likely doesn’t work directly for the hospital and therefore would charge separately for the knee replacement. (The regulation was written specifically to cover hospitals.)
How to find the prices
So how can you make sense of whatever pricing information hospitals do provide?
The first challenge is finding it.