Price transparency is here! How does it help you, the patient?

January 14, 2021
Josie Rasberry

Shopping is something we all do. It is a simple concept we all understand. If I want a new pair of sneakers, I go online and compare options by cost, style, quality, etc.. In every single industry, consumers can see prices and compare options. Before 2021 though, there was one industry left out of the shopping experience: healthcare. Think about it, how often have you needed a healthcare service but had no idea how much it would cost? At best, you knew your copay for the healthcare service or maybe the cash pay option if you opted out of insurance. But on January 1st, 2021, price transparency laws went into place, the first step in making healthcare a shoppable industry.

So how does this affect you as a patient? Let’s discuss it!

For now, the rules only apply to hospitals.

As of right now, the Centers for Medicare & Medicaid Services are only enforcing price transparency rules on hospitals. According to CMS, this means:

Hospitals must post standard charges for at least 300 shoppable services that can be planned in advance, along with a description and any other services the hospital customarily provides with it. This includes things such as x-rays, outpatient visits, imaging and laboratory tests or bundled services such as a colonoscopy. You’ll be able to find the hospital’s standard charge for the shoppable service and see other associated costs.”

Hospitals have to publicly display their negotiated rates with insurers as well as the cash pay price for services. That means if you want to find the hospital that performs the best knee surgery for the lowest cost in your area, you can!

Health plans will be required to share their negotiated rates for in-network and out of network medical services and provide “an internet based self-service tool for 500 of the most shoppable items and services” by January 1, 2023.

How to make the best use of price transparency.

Always shop for care. A brand new analysis of hospital price transparency showed that “a knee or hip joint replacement in the Houston, TX area could cost as little as $28,815 or as much as $45,775.” These are not small variations; your decisions could make a huge difference in how much you end up owing.

Now, If you have insurance, you’ll need to take your coverage into consideration. For example, let’s say you find a quality hospital with the lowest cost for an MRI. You discover later the price you saw was not for your insurer, and now you have an out-of-network bill that is much more expensive. Be sure to consider your in-network price, the cash pay price, and whether you expect to hit your yearly deductible before making a decision.

For people who only use cash pay options when receiving medical care, the process is a bit simpler. You still need to make sure to carefully review the information, and don’t be afraid to ask the hospital qualifying questions before deciding to go there.

Final thoughts.

Hospitals are still in the early stages of making all this information easily understandable. Some are even ignoring the price transparency rules and simply paying the $300 daily fine. Since the pricing information is still hard to find and understand, we recommend using services that are pulling the data into easily understood formats. Shameless plug: we have an app in the works that is doing just that! It will take time, but ultimately, price transparency in healthcare will lead to overall lower healthcare costs and help patients to make the best choices possible for their care.

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