A federal law aimed at helping patients better understand the cost of their medical care may have missed the mark.
The rule created by the Centers for Medicare and Medicaid (CMS) requires all hospitals to post a complete list of their current standard charges online in a machine-readable format. The price lists, known as chargemasters, must be updated at least annually.
In its proposal, CMS wrote, “We are concerned that challenges continue to exist for patients due to insufficient price transparency. Such challenges include patients being surprised by out-of-network bills for physicians, such as anesthesiologists and radiologists, who provide services at in-network hospitals, and patients being surprised by facility and physician fees for emergency room visits.”
But simply making the chargemasters available online does little to help patients understand the cost of their medical care, according to Barbara Feder Ostrov, a senior correspondent with Kaiser Health News.
“It’s really tricky because these list prices are super technical,” Feder Ostrov said. “So unless you’re a doctor, it’s really hard to comparison shop using these prices.”
Each list consists of every procedure, medication and tool you might encounter during your hospital stay. Each hospital uses its own abbreviations.
When we looked up a brain MRI with contrast, we found a dozen variations including:
- HC MRI BRAIN BRAIN STEM W/CONTRAST MATERIAL
- M-BRAIN WITH CONTRAST
- MRI-HEAD W CONTRAST
- MRI BRAIN INC STEM W CONTRAST
- MR MRI BRAIN WC
- Click here to see the comparison document
The other drawback of the chargemasters is the prices aren’t an accurate reflection of what patients can expect to actually pay.
“These list prices are just that… like a hotel room rate that you see posted on the door of a hotel room. Hardly anybody ever pays that list price. Usually it’s negotiated. And the people doing the negotiations are the insurers who give you your health insurance or Medicare or Medicaid,” said Feder Ostrov.
But the uninsured likely won’t pay the list price either. Most hospitals offer some type of discount or financial assistance to patients without insurance.
“You can work with the hospital to negotiate a better rate on your final bill. They really don’t want to take you to collections because they’re not going to get as much money,” Feder Ostrov said.
Although consumers may find the chargemasters confusing, Feder Ostrov believes the transparency is an important part of the larger healthcare conversation.
“It's better to know about this stuff than it isn't. That’s the first thing,” she said.
“It also allows policymakers to review the prices that are out there to compare among institutions and to say… Can you really justify this price? Can you break it down for us and tell us what these services and treatments are really worth?”
CMS acknowledged that the chargemasters alone may not be helpful to patients for determining what they are likely to pay and said it is considering ways to improve the accessibility and usability of that information.
NBC Connecticut contacted the Connecticut Hospital Association to learn more about the pricing process. A spokesperson advised us to contact hospitals individually. Some did not respond to our inquiries. Those that did, declined to comment.