Did You Know: Hospitals Are Now Required to Publicly List Pricing Information
Effective January 1st, 2019 a federal mandate is requiring hospitals to publicly list charges for procedures, supplies, and services provided. These "Chargemasters", until now, have been kept in secret. They are also unique to every hospital. So the price for an X-Ray at Hospital A could be completely different from the price at Hospital B, but still more/less expensive than Hospitals C, D, and E.
Confused? Good, we're on the same page.
Here's a rough breakdown of the history of how the charge system came to work as it does today:
As a healthcare practitioner and consumer, let me highlight some important aspects of this system in order to make you a better informed healthcare consumer.
Here's what you need to know:
1) Healthcare is a Business
At the end of the day, a profit needs to be made. For the hospital, and for the insurance company. This inherently creates an ethical dilemma. Yes, a profit needs to be made in order for providers and insurance companies to operate but that can and is often coming at the expense of the physical, psychological, and financial well being of the consumer, the patient. Are we really okay with living like that?
2) Charged Amount doesn't equal Reimbursement
Charge prices are intentionally inflated given the provider-insurer relationship. The ultimate reimbursement is the result of a haggling process between providers and insurance companies. Which is highly complex to say the least. So the price that is billed to the insurance company is not equal to the amount that is received by the hospital. While price transparency exposes the charge amounts, it does not provide us with information about reimbursement rates from the insurance companies so we still don't know what the actual cost of a service is in the mind of the insurance company.
3) Fake Prices Matter
If you're a cash paying customer, as Adam highlights, you will be charged these inflated prices. The same is true when you have insurance and you haven't met your deductible. Because until you meet you deductible, the reality is is that you don't have insurance coverage and are treated the same as an uninsured patient. So you're stuck paying an inflated price, so some suits can go home with bigger bonuses at the end of the year (probably).
4) In Network vs Out of Network Benefits
Insurance coverage muddies the water further. Insurance coverage can get complex very fast. There are different benefit breakdowns for services rendered at an in-network vs out-of-network provider. As far as which hospitals and providers are in vs out of network? That is organization and provider specific. You'll have to do your research. (However, keep in mind in certain situations it may not matter and can actually benefit you to see someone out of network. I'll talk more to that point later in the post. Again, more complexity.)
5) Price Transparency Mandate Affects Hospitals Only
This means private practices are not required to follow the mandate requirements. This can ultimately create the same concerns in the private sector. At Team Sapiens PT, we believe in being as transparent as possible. We list our cash prices on our website, here.
Health Care Costs are Out of Control in the US
DUH. What can you or I do about this situation? Well for emergency and physician services we're pretty stuck. Overall, this mandate raises more questions than it answers, and fixing the problem will be a process, but at least it is shedding light on the issues. I hope that by reading this it has gotten you thinking and discussing with peers. Attempts to reform healthcare in this country are coming, so stay informed.
For rehabilitation services, however, I can personally provide a solution if you live in the Chicagoland area. If you don't, do your research. There are plenty of providers out there that are just as sick of the current system as you, but you'll have to do some digging to find them.
Let's look at an example. Below is a spreadsheet of charge prices for physical therapy related procedures at a local hospital (in Cook Country, IL):
Notice that many of these procedures are billed in 15-minute increments. So, let's say you see a physical therapist in a hospital system for 40 minutes. Let's also say this is your first visit so an evaluation is performed.
(*A quick aside: as far as I know it is unclear whether these prices are for inpatient physical therapy services, for outpatient hospital based, or outpatient hospital affiliated satellite clinics.* This situation is not a simple one.)
Using the above charge list, here's an example of the resulting billing:
PT-Eval Low Complexity (Not a timed code) -- $315.00
PT-Therapeutic Exercise x 15 min ----------- $150.00
PT-Neuromuscular Re-ed x 15 min --------- $160.00
If you're not insured, that would be the total you are billed. If you haven't met your deductible, that would be the total you are billed.
If you have met your deductible, the insurance company will pay an adjusted amount to the hospital which is less than the billed price, minus any further responsibility you may owe depending on your plan's co-pay or co-insurance.
THIS. IS. CRAZY.
Now I haven't named the specific hospital, because it doesn't matter. They all do it. And it's not even really their fault. These unbelievable prices are a result of an environment that created this problem. Trying to assign blame helps nothing.
Compare that example to our cash rates.
Current health plans have steep deductibles, even in network. Given your plan specifics, it may be much more financially sound for you to see a provider in or out of network, and pay the cash rate rather than bill your insurance so that you're not stuck paying an inflated price.
You shouldn't go broke because you got sick or injured.
Don't want to pay inflated prices? We're here for you.