The news that Prime Healthcare Services and Kaiser Foundation Health Plan have agreed to undisclosed payment rates when Kaiser members are treated at Prime hospitals is aggravating.
Granted, very few hospital systems and insurers publicly disclose their negotiated rates. One major exception is Blue Cross and Blue Shield of North Carolina, which last month suddenly released its all-inclusive payment rates for services at each of the state's hospitals, including for coronary bypass procedures, kidney transplants, knee replacements, screening colonoscopies and other services. North Carolina hospitals were stunned.
The Blues plan may have felt pressured to release the data because the state Health and Human Services Department, under a 2013 price transparency law, recently began publishing cost data submitted by hospitals on 100 common inpatient services, 20 surgical procedures and 20 imaging procedures, including the actual prices paid by Medicare, Medicaid and the state's top five insurers.
But let's not forget that price disclosure is now part of federal law. Section 2718(e) of the Affordable Care Act requires every hospital to establish and make public a list of its standard charges for items and services.
Last April, in implementing that ACA provision, the CMS said as part of a rule on 2015 inpatient prospective payments that hospitals as of Oct. 1, 2014, must make public either a list of standard charges or policies for allowing members of the public to request and view charges. The agency encouraged hospitals to help patients compare charges for similar services across facilities and mandated that they update the price information at least annually. Hospitals are not required, however, to publish the chargemaster price list itself.
It's not clear that the ACA's Section 2718(e) requires the publication of actual prices paid by purchasers. “If I was in HHS, I would interpret it as being the amount that is actually paid,” Gerard Anderson, director of the Center for Hospital Finance and Management at Johns Hopkins University, told Modern Healthcare last year. “That would be my reading of congressional intent, that they wanted actual price transparency.”
What hospitals are actually disclosing falls far short of actual prices, unfortunately. Following the release of the CMS rule, many hospitals have posted on their websites a page explaining hospital charges and offering information about how patients can obtain price estimates—but not publishing any charges. This paragraph posted by Holy Cross Hospital in Chicago is typical:
“The standard charges for Holy Cross Hospital are available to the public in compliance with the Affordable Care Act, Section 2718(e) of the Public Health Service Act. We promote price transparency for our patients and want to assist you in understanding your potential financial liability for services obtained at our hospital. However, hospital chargemasters are lengthy and complex documents and do not provide information at a level conducive for this purpose. Therefore, additional information, as outlined below, will be provided to patients seeking price estimates.”
“Most of what I am seeing is contact information where the consumer can call to speak with hospital personnel to obtain an estimate," said Michael Smith, reimbursement senior manager for Eide Bailly, an accounting and business advisory firm. “I am not seeing what I would consider transparent pricing where I as a consumer could go to each hospital's website and compare prices.”
“It's still very hard for consumers to get the full price of service even for just the facility component, let alone for the doctor or surgeon,” said Lynn Quincey, associate director for health reform policy at Consumers Union.
Prime Healthcare does not have a Web page that provides a policy on disclosure or hospital charge information, said Edward Barrera, Prime's director of corporate communications. “When a patient arrives at a facility, depending on insurance or lack of insurance, they are provided information specific to the type of services they will need,” he said.
So we're a long way from the vision of people like Mark Ganz, board chair of America's Health Insurance Plans, of patients walking into a hospital and being able to see an all-inclusive price for each and every procedure on a digital screen.
Kaiser Permanente sued Prime for what it called the hospital system's unnecessary admissions and Prime fired back with a lawsuit to collect tens of millions in unpaid bills. But both organizations made it clear this week that they agree on one thing—consumers have no right to know how much their insurers are paying their providers.
Follow Harris Meyer on Twitter: @MHHmeyer