Getting clear pricing information from hospitals has long been a challenge in healthcare. Executive orders from both the Biden and Trump administrations have tried—but so far failed—to get providers to share how much different types of care costs.
That’s because hospitals have repeatedly dodged these orders, according to the Department of Health and Human Services. And while some fines have been doled out, the cost of care is still unclear. Fines can currently run between $300 and $5,500 per day.
A new bipartisan bill that was introduced in July by Sens. Roger Marshall and John Hickenlooper aims to address these challenges and provide clear pricing information once and for all.
The problem exists because hospitals negotiate prices independently and in private, and therefore have varying costs for different procedures compared to other hospitals—and sometimes even within the same hospital.
“You could have your hip replaced at a surgical outpatient center for $10,000–$15,000, but some medical centers would charge $50,000,” Marshall, who is also a medical doctor, told Healthcare Brew. “The consumer needs to know that.”
Bill background. If passed, the law would require providers—including hospitals, ambulatory surgery centers, imaging centers, and clinical labs—to publicly report their negotiated insurance rates and cash prices.
In support of another price transparency bill last year, the PIRG, a nonprofit, reported that additional price transparency could save $1 trillion in healthcare costs, as a lot of healthcare spending is due to administrative waste, overcharging, and fraud.
The new bill says providers would also have to give patients an itemized bill that clearly outlines the cost of each service if multiple were provided, reiterating that estimates are not sufficient. Executives from both the hospital and patient’s health plan would also be required to sign an acknowledgment of the “accuracy and completeness” of the prices shared.
Navigate the healthcare industry
Healthcare Brew covers pharmaceutical developments, health startups, the latest tech, and how it impacts hospitals and providers to keep administrators and providers informed.
In a July 21 letter to the Centers for Medicare and Medicaid Services (CMS), the American Hospital Association’s SVP of Public Policy Analysis and Development Ashley Thompson wrote that “hospitals and health systems are dedicated to improving price transparency” and plan to work with the Trump administration to meet those goals.
“We urge CMS to focus future efforts to reform price transparency on streamlining policies to remove complexity and administrative burden,” she added.
Marshall also hopes the law will help CMS have “more teeth” to enforce these rules. He supports the idea of preventing hospitals that don’t turn over data from participating in Medicare and Medicaid.
“I just don’t know how else to make hospitals do it,” Marshall said, adding he thinks there’s “absolutely” enough Senate support for the bill to move forward this fall.
Employer issue. The law would also give insurers offering employer-sponsored plans the right to access their claims data so they can clearly see the cost of care and design plans accordingly.
Right now, insurers cannot clearly see how much care costs since providers do not share it. Under the law, they would have access to financial information about subsidiaries and subcontractors, like pharmacy benefit managers.
Mark Newman, co-founder and CEO of health technology company Nomi Health, said he supports the bill from an employer perspective.
“When employers can see where their dollars go, they can eliminate waste, negotiate better rates, and close care gaps before they turn into expensive claims,” he said in an emailed statement.