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Hospitals and big insurance companies have been colluding for years to keep pricing information secret from consumers.
But two and a half years ago, Congress passed laws directing hospitals and payers to put a stop to it.
One of the laws, the Transparency in Health Care Act, expressly requires hospitals to put clear pricing information on their websites, freely available, and presented in such a way that the average consumer can understand.
Since January 1st, 2021, The Center for Medicare and Medicaid Services final hospital price transparency rule CMS’s price transparency rule requires hospitals to post a machine-readable list of their services and prices.
They must also post on their websites a patient-friendly tool to help them shop for 300 common services.
The goal is to force providers to compete on an even playing field, and to allow consumers to more easily shop for the best available pricing for these common procedures.
Combined with other ratings data, outcomes measures, and patient reviews, patients would also be able to compare the quality of services received as well as the price.
Hospitals have been dragging their feet. As of mid 2023, only about a third of hospitals nationwide have meaningfully complied with the law at all.
The PatientsRightsAdvocate.org’s fifth Semi-Annual Hospital Price Transparency Compliance Report found that only 36% of the 2,000 hospitals reviewed were fully complying with the federal Hospital Price Transparency Rule. These findings mark a slight improvement in compliance from the report released in February showing just 24.5% compliance.
In Colorado, compliance metrics are even worse: Only about 18% of hospitals have complied with the federal price transparency law.
The vast majority of hospitals in Colorado are well out of compliance. They have failed – or refused – to make their pricing information available to ordinary consumers.
So when it comes to effectively shopping for health care procedures – anything from MRIs to knee replacements to cancer treatments to childbirth – Colorado’s consumers are still effectively left in the dark.
This is unacceptable.
Through Congress and the Colorado State Legislature, voters have made it crystal clear that they want to break up the secretive pricing cartel arrangements between hospitals and insurance companies.
They also want to eliminate unfair and sometimes outrageous pricing discrepancies that distort the free market and enable hospitals and other providers to exploit confused consumers and gouge patients in their most vulnerable moments.
For example, some instances, an X-Ray or MRI imaging session or childbirth could cost up to ten times as much for one patient than another – even at the same hospital.
Unfortunately, the U.S. The Department of Justice and the Department of Health and Human Services have shown little inclination to enforce the law on behalf of healthcare consumers.
And so the Colorado State Legislature has stepped in.
A new law, recently signed by Colorado Governor Jared Polis, authorizes Colorado’s Attorney General to levy steep fines against Colorado hospitals that fail to comply.
According to the new law, hospitals that don’t publicly post their pricing information on their Websites could get tagged with deceptive trade practice, and face a fine of up to $20,000 per violation.
The bill’s chief sponsors in the House were Representatives Anthony Hartsook and Lindsey Daughterty, while the primary sponsors in the Senate were Kevin Van Winkle and Julie Gonzalez.
In addition to the fines for non-compliance, the law also short-circuits the efforts of hospitals to collect on medical debts incurred by consumers while the hospital was not in compliance with the law.
Under the new Colorado statute, any customer who is subject to a collection action from a hospital, and who believes the hospital had not posted its pricing information as required by the law at the time they incurred the debt, can sue the hospital.
If a judge or jury finds for the plaintiff, the hospital must refund the patient everything they paid, and pay a penalty equal to the total amount of the debt – plus attorneys’ fees and any other costs the patient incurs as a result of the hospitals’ faulty collection action.
The hospital must also remove any negative information about the collection from the patient’s credit report.
Under the law, hospitals who accept Medicare patients have until October 1st of this year to post their Medicare reimbursement rate information on all procedures done in the hospital.
If hospitals can be brought into compliance, the pricing information would be very good for Colorado healthcare consumers.
Full price transparency would level the playing field, and allow consumers to shop around at different providers for common medical procedures and prices. When combined with outcomes data, consumers can also compare not just pricing data, but also data on the quality of healthcare.
Full transparency would also benefit employers, insurance companies, and municipalities working to control their employee healthcare costs.
Full transparency would also make it easy for data aggregation websites to publish easy-to-understand healthcare data so people can compare prices and quality information from dozens of providers at a single site – as we are already accustomed to doing at sites like Expedia.com, Priceline, and Kayak.com.
It’s not a Panacea. But it is a vast improvement compared to the climate of secrecy and collusion that existed prior to Healthcare Transparency.
