The ColoHealth Health & Wealth Newsletter
May 2023
Vol. 13, Issue 5

New Price Transparency Rules Empowering Healthcare Consumers

In the old days – as in, just a few years ago – getting reliable information about healthcare pricing was like pulling teeth! 

Hospitals and Big Insurance conspired with each other to keep pricing a closely guarded secret. They even imposed gag clauses in their contracts with one another to prevent you from learning about favorable pricing deals!

Fortunately, those days are closer to being over. Under new federal price transparency rules, all such gag clauses are now prohibited by law. And both hospitals and insurance companies are required to make all their pricing information publicly available.

Specifically, three laws and regulations are together changing the healthcare landscape:

  • The Consolidated Appropriations Act of 2021
  • The Hospital Price Transparency Final Rule 
  • The Transparency in Coverage Final Rule

Taken together, these three pieces of legislation mean that healthcare consumers and their families now have a mountain of pricing and utilization data available to them.

Hospital Pricing is Crazy.

 Without price transparency rules, the prices hospitals actually charged to insurance companies, cash pay patients, and the uninsured have been almost completely opaque.

Which allowed hospitals to get away with some seemingly insane pricing practices, leading to an unfair negotiating environment for individuals.

Here are some of the most unbelievable examples of inequitable pricing we’ve seen in recent years.

  • A 2020 study for the American Medical Association found that the cost of a lower back X-ray was just $159 for one insurance company, while another payor at the same hospital for the same X-ray was billed more than $1,500!
  • A 2018 report by GoodRx found that the cash price of a common asthma inhaler varied from $20 to $250, depending on the pharmacy. 
  • The price of a course of radiation therapy is 21.7 times more at the most expensive provider than the least expensive. The average cost for insurance companies is more than ten times the cost paid by Medicare, according to the JAMA Journal of Oncology.

As you can see, there is almost always a lot of room for negotiation when it comes to health care prices. Especially if you have the ability to shop around, and the provider knows you have the ability to walk away to find a better deal.

Hospitals Need Your Business!

Cash is king.

Of course,  they want to get the highest price they can. 

Hospitals and other providers also have massive fixed costs that they are desperate to cover. For them, the worst outcome is to have an MRI machine or a hospital room or an operating room sitting idle and generating zero revenue.

They want you in there, bringing in the dollars! And if you’re a cash payer, they will generally be willing to negotiate a reasonable discount to ensure you get care at their facility rather than take your money and go across town to a provider who offers a better value.

Most providers are willing to provide a handsome discount for cash payers. According to a study from Patients Rights Advocate, cash prices reported by hospitals are lower than the highest insurer-negotiated price 87% of the time, and lower than most major insurers’ negotiated prices 55% of the time,

These new transparency rules are a game changer. For the first time, ordinary healthcare consumers can see exactly what the real world pricing is for hundreds of common procedures, and use that information to force providers to negotiate and compete for your business.

But they only work well  if you put in the work, and do your research ahead of time.

How To Research Healthcare Prices 

It’s easy. 

Once you’ve identified the specific medical service or procedure you need, here are some steps you can take to research the healthcare market: 

  • Check with your insurance company’s website.  Hospitals aren’t the only parties that need to post pricing information. The Coverage Transparency Act requires insurance companies and self-insured health plans to disclose the prices they pay for medical procedures as well.

    So you will be able to get a rough range of what your local providers are willing to accept from insurance companies. 
  • Visit hospital websites. Hospitals must make pricing information readily available on their websites. Keep in mind that the prices listed are chargemaster rates, which are the prices set by hospitals before any insurance or discounts are applied. They are typically much higher than what insurance companies actually pay, so use them as a starting point for researching costs rather than an exact estimate.

Some hospitals tend to hide this information, so inquire if you are not able to find it. 

  • Call your healthsharing concierge service. Healthsharing plans generally have a “concierge” service that can help you research pricing and find quality providers that offer a good value. These professionals are “in the trenches” every day, negotiating and helping members pay for medical care. They have a wealth of information and knowledge, and can help you save a lot of money in out-of-pocket costs. 

If you’re a healthsharing plan member, you should definitely make the most of this resource.

  • Use online pricing services. Companies such as Healthcare Bluebook and Fair Health compile vast amounts of pricing information from thousands of providers, and make it easier for you to compare costs for specific procedures across different providers in your area. 

These tools can be particularly helpful if you are uninsured or have a high-deductible health plan, as they can help you find more affordable options for your healthcare needs.

By taking advantage of these resources, you can become more informed and empowered when it comes to making healthcare decisions. Remember to always do your research and compare prices before making any decisions about your healthcare.

Conclusion

In conclusion, the new hospital price transparency rules can be a valuable tool for consumers looking to get the best possible pricing on healthcare services. Keep these steps in mind:

  • Check insurance company and hospital websites for price transparency information
  • Get a price estimate before you receive care
  • Consider alternative options
  • Check with your healthshare concierge team
  • Advocate for more price transparency

By doing these things, you can take control of your healthcare costs and make more informed decisions about your healthcare. 

While there is still a long way to go in terms of making healthcare pricing more transparent and accessible, these new rules represent an important step forward in empowering patients and promoting a more equitable health care system.

To Your Health and Wealth,

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Wiley P. Long III
President- ColoHealth

WileyLong-newsletter

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