When is the last time one of your employees asked how much an in-network physician’s visit would cost? How much does a blood test cost at the hospital to which your doctor referred you, compared to the same blood test at another facility you could use? Why haven’t consumers who spend hours shopping for the best deal online for a pair of shoes been shopping that way for their health care? Some might say it’s because (1) very few of us second-guess the diagnosis or treatment referrals of personal physician and (2) perhaps more important, apathy, since someone else pays for most of the cost of our health care (an insurer, the government, an employer’s group health plan).
Many have no idea how much the physician’s visit will cost before going to the appointment, much less how much the blood test or MRI the doctor orders will cost. If we pay a flat copayment for prescription drugs, most of us have no clue about the actual cost of the drug (which might actually be lower than the copayment – surprise!). The truth is, we’ve been paying for our ignorance by paying more every year for health coverage – either by paying more in health insurance premiums or self-insured employer group health plan cost contributions.
The current condition of pervasive health care cost ignorance may change in the next couple years, if the Trump administration has its way. Last week, to further President Trump’s Executive Order 13877 (June 24, 2019, calling for up front health cost transparency), the Departments of Health and Human Services (HHS), Labor (DOL), and Treasury (IRS) issued a “Transparency in Coverage” proposed regulation that would require most employer-based group health plans and health insurance issuers to disclose price and cost-sharing information to enrollees up front. (For a quick read, see the fact sheet.) The Transparency in Coverage rule proposes to impose two new disclosure requirements on employer-sponsored group health plans and health insurers in the group and individual markets. First, group health plans and health insurers must provide enrollees with cost-sharing information for a covered item or service from particular providers using a self-service tool provided by the plan or insurer on an internet website. The required disclosures must include estimates of participants’ cost-sharing liability for covered items or services furnished by specific health providers. Second, plans and insurers also must disclose (using machine-readable files) the negotiated rates for in-network health providers and amounts the plan or insurer has allowed for items or services furnished by out-of-network providers. Comments are due on the proposed Transparency in Coverage rule by January 14, 2020.
On the same day the agencies issued the Transparency in Coverage proposed rule for public comment, the HHS issued its “Hospital Cost Transparency” final rule requiring hospitals to provide clear, accessible information about their standard charges for the items and services they provide beginning in 2021. (For the cliff’s notes version of this one, check out the fact sheet.) This includes the amount the hospital will accept in cash from a patient for an item or service, and the minimum and maximum negotiated charges for 300 common “shoppable” services. Shoppable services are services that patients can schedule in advance like x-rays, outpatient visits, imaging and laboratory tests, or bundled services like a cesarean delivery, including pre- and post-delivery care. The Hospital Cost Transparency rule includes some enforcement teeth too: civil monetary penalties of $300 per day among other enforcement tools.
Pray tell, if health care providers, health insurers and group health plan third-party administrators can pay claims and issue explanations of benefits after we’ve incurred health care expenses, why couldn’t they disclose those costs and covered benefit amounts before we incur the health care expenses? Assuming the Hospital Cost Transparency rules survive the inevitable legal challenges and the Transparency in Coverage rule is finalized, will more information about the cost of health care result in better personal health decision-making? We’re taught from a very young age to brush and floss and not eat too much sugar; to get fresh air and exercise and not be sedentary; that smoking causes lung cancer, too much alcohol causes liver damage, and too much fat causes heart disease. Still, many among us choose to eat, drink, and otherwise live in ways that reflect astonishingly counter-intuitive personal health decisions. More information may not necessarily result in the decision-making changes the Trump administration expects … but there’s always room for healthy optimism.