Hospitals Posting List Prices Bring Little More Transparency

By Consumers For Quality Care, on January 9, 2018

Photo by Heidi de Marco/KHN

As of January 1, hospitals are required to post list prices online, although it is not immediately clear how helpful the new postings will be for consumers.

Kaiser Health News reports that while hospitals are posting the information, it is still far from clear how much consumers will actually need to pay for a particular treatment or procedure. The requirement states that the prices must be posted in a “machine-readable format.” Other than that, the hospitals were given broad latitude to post the price lists.

[T]he price lists displayed this week, called chargemasters, are massive compendiums of the prices set by each hospital for every service or drug a patient might encounter. To figure out what, for example, a trip to the emergency room might cost, a patient would have to locate and piece together the price for each component of their visit — the particular blood tests, the particular medicines dispensed, the facility fee and the physician’s charge, and more.

Despite being public, it can still be difficult for consumers to locate and navigate a hospital’s chargemaster. Hospitals are posting the prices with “medical codes, abbreviations and dollar signs — in little discernible order — that may initially serve to confuse more than illuminate.”

At Sentara in Hampton Roads, Va., there’s a $307 charge for something described as a LAY CLOS HND/FT=<2.5CM. What? Turns out that is the charge for a small suture in surgery.

Gerard Anderson, the director of Johns Hopkins Center for Hospital Finance and Management, says that he doesn’t believe the posted information is helpful for consumers. Even seemingly simple procedures can have a number of charge codes associated with it.

He says that they wouldn’t know which items on the chargemaster they would be responsible for. Additionally, unless a consumer is uninsured or out-of-network, few people pay the full list price. Barak Richman, a law professor at Duke University and an expert on balance billing, says that knowing charge codes “would be entirely unhelpful” for consumers fighting a surprise or balance bill.

“Chargemasters are enormous spreadsheets with incredibly complicated codes that no one short of a billing expert would be able to make sense of,” he said.

Currently, there is no penalty for hospitals that fail to post prices.