The Twisted Path to “Transparency”

Since 2013 in Massachusetts, if you wanted to find out the charge on an admission, procedure, or service, providers are required to respond to your request within two working days. Health insurance companies are required to have toll free phone numbers and websites that enable consumers to request and obtain, in real time, the estimated or maximum allowed amount or charge for a proposed admission, procedure, or service. In terms of so-called “price transparency,” Massachusetts has a system up and running that, while imperfect, nonetheless gives consumers an opportunity to receive an estimate of the costs they’ll face.
Last month, CMS issued a final national rule that would require hospitals to make their standard charges public. Under the CMS rule, hospitals would have to reveal the negotiated rates they reached with insurers, which due to the inherent complexity of the system, often bears absolutely no relation to the costs the consumer will pay.
Last week, the American Hospital Association (AHA), along with other hospital groups, sued the federal government to stop imposition of the negotiated rate rule. The hospitals argue that CMS lacks statutory authority to require public disclosure of individually negotiated rates between commercial health insurers and hospitals. They say the provision violates the First Amendment by compelling the public disclosure of individual rates negotiated between hospitals and insurers in a manner that will confuse patients and unduly burden hospitals.
In October the Massachusetts Attorney General’s Office released a report showing that just a small percentage of people in the commonwealth seeking care use price transparency tools; those who do employ them don’t hold their providers to the estimates they were given, according to the report. To date, strategies that have been used to get consumers to use the tools have often failed. 
So while Massachusetts has made the effort to create tools that give a rough estimate of potential costs, few people are using them. At the same time, the Trump Administration is promoting the posting of gross charge amounts and private negotiated details that bear little relation to costs – which, according to the AHA lawsuit, is probably illegal.