Throughout the political spectrum, lawmakers agree that paying for health care is a serious problem. Healthcare is $ 4 trillion in the United States, and we spend more per capita than any other country in the world. When Americans ’collective medical debt is $ 195 billion, and 64% of Americans report that they have avoided or postponed care for fear of cost, politicians must look for new solutions.
Unlike most other goods and services, health care is most often paid for by a third party – the insurer, rather than directly from the patient to the provider. This shutdown has resulted in fewer patients shopping at the best price and quality of service.
Medical bills and prices are complex because each patient has a unique set of circumstances. However, federal law requires hospitals to publish their heads – a list of services they provide and a monetary price. But many hospitals have still found ways to overcharge.
For example, the 2021 leak showed how Scripps Memorial Hospital in Southern California used software to impose an automatic surcharge of 575% to 675% on supplies and services. Screenshots of the hospital’s software showed how things like antimicrobial solution were priced from $ 73.50 to $ 496.13 for patients.
Similar stories are common, and Americans now demand greater transparency in health care prices. In addition to the federal requirement to publish Chargemasters, former President Donald Trump has begun requiring hospitals to publish their prices in a consumer-friendly format or threaten financial penalties. This included their intra-supplier’s tariffs for covered goods and services, allowed amounts offline and bills for certain goods and services. President Biden has doubled these demands by increasing financial penalties for non-compliance.
Unfortunately, the Center for Health Services and Medical Services (CMS) has announced that it will postpone compliance with this rule until July 1, 2022. As a result, hospitals are in no hurry to comply with it. According to a study by Patient Rights Advocate, last summer only 5.6% of hospitals were in full. The same study found that “hospitals typically refuse to publish their prices to insurance payers as required. They hide pricing information from consumers and search engines. And they break the spirit, if not the letter of the law, publishing mostly meaningless cost estimates instead of real prices.
The low level of compliance and non-compliance with CMS rules have forced states to take action. Virginia recently joined Massachusetts, Alaska and Minnesota in demanding transparency in hospital prices. In these states, suppliers and payers must disclose their prices to consumers, and Colorado is ready to follow suit.
Codification of requirements in state law gives states the power to ensure transparency requirements, even if the federal government refuses to do so. State penalties for non-compliance may be more severe than those provided for by federal regulations. For example, Colorado’s HB 1285, recently passed by the House of Representatives and Senate, prohibits hospitals or other individuals or entities from recovering debts owed to patients if the hospital did not comply with federal hospital price transparency laws at the time of service. .
The transparency of health care prices has the broad support of the two parties. Measures to ensure transparency were unanimously passed by the Virginia General Assembly – a rare feat in Richmond – and Colorado law has sponsors from both political parties in the House of Representatives and Senate. Politicians on both sides of the aisle recognize that empowering patients with pricing information allows them to make better decisions about where to get care, plan franchises, negotiate service costs, or take advantage of alternative programs such as the Department of Health.
Information is a force in the free market system, and it is time to give patients price transparency in our healthcare system.
Lisa B. Nelson is the Director-General of the American Legislative Exchange Council (ALEC). Brooklyn Roberts is the Senior Director of the Health and Social Services Task Force at ALEC.