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Michigan law would require hospitals to post list of fees for services

Hospitals in Michigan would be required to post their master list of fees for services, procedures and medical supplies under a bill pending in the state Senate.

The effort, introduced more than a year ago by state Sen. Joe Hune, is the latest in a growing movement — in Michigan and across the country — to make health care providers more transparent about their pricing and quality data.

Hune, a Republican from Livingston County's Hamburg Township, said he is targeting the so-called “chargemaster” documents to force some degree of open-market competition on an industry in which the price of a service isn't often known until after it's rendered.

His bill, Senate Bill 147, is the subject of a hearing today in the Senate's health policy committee.

The hospital industry is largely neutral or undecided on the idea, saying the concept makes sense but many hospitals already voluntarily publish some medical cost data.

Hune said those efforts don't go far enough.

“This would mandate transparency,” he said. “Republicans don't like the word 'mandate,' but this is the most simple and basic of concepts.”

This isn't his first try. In 2013, Hune introduced a similar bill during the last legislative session; it was voted out of committee but died on the Senate floor.

Hospital chargemasters gained national attention in 2013, when Time magazine devoted an entire issue to a 24,000-word story by journalist Steven Brill exposing the inconsistencies in medical costs and huge markups hospitals charge on patients' bills.

In Michigan, some hospitals have begun to post cost and quality data online. The Michigan Health & Hospital Association's Keystone Center allows users to compare charges by hospital and by procedure, though the data has limits — it's several years old and reflects average costs for Medicare patients.

The MHA is neutral on Hune's bill.

“We do not oppose the requirement to publicly post chargemaster information,” the organization said in a statement. “At the same time, the hospital community is working on improving the transparency of meaningful health care cost and quality data.”

Mary Zatina, senior vice president of government relations and community affairs for the eight-hospital Beaumont Health system, said in a statement the system supports transparency but is still analyzing Hune's bill.

A Beaumont spokeswoman said Oakwood Healthcare in Dearborn, which merged with Beaumont Health System and Botsford Health Care to form Beaumont Health, was the first of the three systems to launch a price website. Beaumont is considering expanding it systemwide.

Hune is not the only Michigan lawmaker attempting to bring transparency to health care costs. State Sen. Jim Marleau, R-Lake Orion, has introduced a bill that would require health insurers and carriers to file price and claims data with the Michigan Department of Insurance and Financial Services. The information is commonly called an “all-claims payer database.”

Marleau could not be reached for comment.

Advocates for such a database say hospitals would be able to improve quality and compare how they perform against competitors, while patients would be able to compare prices when choosing providers.

The National Conference of State Legislatures, however, says evidence is not yet readily available to show whether all-claims payer databases actually do reduce costs. At least 11 states have implemented such a database, while others are working toward one.

Hune's bill would require hospitals not only to release their chargemasters, but also post a notice telling patients they are available. Hospitals that don't comply with the rules could be fined up to $1,000 per day.

“It's one basic economic factor that isn't incorporated into our health care today,” Hune said. “When you have transparency, ultimately people will shop around and hopefully (have) better health outcomes because the hospitals will be more responsive to the needs of the patients.”

"Senate bill would require Michigan hospitals to post list of fees for services" originally appeared in Crain's Detroit Business.


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