A new rule was supposed to force hospitals to reveal their secret prices. But after I spent hours shopping around for an MRI, I learned that not much has changed.
- Starting January 1, hospitals were supposed to publish prices they negotiate with insurers.
- To see whether the process had gotten easier, I tried finding prices for an MRI at nearby hospitals.
- I was unable to easily compare MRI prices, as most hospitals neglected to post negotiated rates.
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When you go shopping for a new laptop or TV, you know the price before you buy, and you can compare prices across different brands.
That’s not the case in healthcare, where people typically don’t know what a doctor’s visit or surgery will cost until they get the bill in the mail weeks or months later.
The black box that is the healthcare industry was supposed to open up somewhat on January 1, when a Trump-era regulation took effect requiring US hospitals to reveal the secret prices they negotiate with health insurers for all the procedures, drugs, and healthcare supplies they provide.
The new rule was meant to inject some competition into the healthcare space by helping people shop and compare the cost of services across hospitals, and helping employers compare prices so they could steer employees to lower-cost hospitals.
“The way hospitals are paid by insurance companies is quite a bit of algebra, and by disclosing these rates, you fill in all the missing pieces to figure out what a patient might owe,” said Chris Severn, the cofounder of price-transparency company Turquoise Health. “That paves the way to actually be able to budget for hospital procedures, like an MRI or CT or a knee meniscus repair that you’ve always wanted to get fixed.”
But four months into 2021, prices largely remain under wraps.
Many hospitals have ignored the new requirements, after trying and failing to block them in court. What’s more, a number of the largest hospitals have hidden their price lists from search engines, The Wall Street Journal reported.
I wanted to see if the new requirements have done anything to make shopping for healthcare any easier. I’ve been writing about this industry for half a decade, so I figured I’d have a leg up on navigating hospital websites and locating these prices.
But I quickly found that shopping for even one of the most common services, an MRI, at the hospitals in my area was a tall order.
I often couldn’t find MRI prices broken down by health plan in the spreadsheets that hospitals published under the federal rule. And when I tried out the price-estimator tools some hospitals tout, I was given wide ranges rather than a specific price, or no price estimate at all. One hospital offered a price range of $318 to $2,064 for an MRI — too wide to be of much help.
I searched for prices using just the hospitals’ websites, because hospitals are the ones subject to the transparency rule. I did not use tools that health insurers or third-party companies like Turquoise offered, though they might include some more price information that could help people shop.
Most Nashville hospitals didn’t post insurer-specific prices
I chose to search for prices for an MRI of the lower spine because it’s one of the common services for which hospitals are required to display prices they negotiated with insurers.
I included six general hospitals from three prominent health systems in Nashville, Tennessee, in my search. The health systems included Ascension Saint Thomas, Vanderbilt Health, and TriStar Health, which is owned by HCA Healthcare, the largest publicly traded health system in the country.
To comply with the federal rule, hospitals are supposed to make all of the prices they negotiate with insurers available in a machine-readable file, such as a Microsoft Excel spreadsheet. They’re also required to show prices for 300 common services in an easy-to-use way.
Locating the price lists through a Google search was easy enough. Navigating those files, which have tens of thousands of rows of data, was another story. These files are filled with medical jargon and abbreviations, so it was helpful to know the billing code assigned to my type of MRI (72148) when searching through the documents.
Four out of the six hospitals didn’t disclose all the prices they negotiated with health plans, making comparison-shopping nearly impossible.
Three TriStar hospitals in Nashville, including the system’s flagship Centennial Medical Center, provided only the gross charge for a lower-back MRI, which is the price before any discounts. Centennial’s price for the MRI was $7,156, not including any extra bills the radiologist or other doctors might send.
The gross charge could be helpful for uninsured people to know, and it could also help those with high deductibles, which is the amount a person must pay out of pocket before insurance kicks in. But it’s less useful for others with insurance, as gross charges don’t have much of a relationship with the actual prices patients pay.
A spokesperson for TriStar said in an email that TriStar hospitals have started posting payer-specific rates at the bottom of the machine-readable files. The health system is starting with less complex insurance contracts and will post more information as it works through additional contracts, she said.
I found, however, that the payer-specific rates posted at the bottom of TriStar’s spreadsheets are for a very limited number of insurers and services. My health plan and lower-back MRI were not among them.
Likewise, insurer-specific prices were missing from Vanderbilt University Medical Center’s file, which showed its gross charge for the MRI was $4,170.
“We are aware of the CMS requirement and understand that price transparency is a long-standing concern, particularly for the uninsured and those with high-deductible plans,” a spokesperson for the hospital said in an emailed statement, adding that Vanderbilt is “the only health system in Nashville, and one of few in the nation, that can provide patients all-in pricing for hospital services and physician fees through a cost estimation tool.”
There were only two hospitals that provided a specific rate for my health insurer, both owned by Ascension Saint Thomas. It’s important to note that these negotiated rates don’t include any separate bills sent by physicians, and they don’t take into account a patient’s deductible or any other cost-sharing.
Using the ‘consumer-friendly’ price-estimator tools wasn’t much easier
Hospital groups have argued that publishing the rates they negotiate with insurers isn’t helpful to patients because it doesn’t tell them how much they’ll pay out of pocket. They instead encourage patients to use their price-estimator tools that allow people to enter their insurance-plan details for a personalized estimate.
But I didn’t have much better luck finding a price with those tools.
I ended up with just one specific price estimate for a lower-spine MRI after testing the tools on the websites for the six hospitals. That estimate came from Vanderbilt’s tool, which spit out an estimate of $1,000 after I fed it my plan details.
Even though I fed those details into TriStar’s tool, I received a wide range of price estimates for the MRI. TriStar said an MRI at its Centennial facility would cost me anywhere between $314 and $1,645, not including any physician fees. An MRI at another TriStar hospital, Skyline Medical Center, would cost me between $318 and $2,064.
Despite several tries, Ascension’s price estimator repeatedly told me estimates for the MRI couldn’t be calculated. I got the same response even though I tried several insurers.
A spokesperson for Ascension said the tool would include pricing information for the MRI if the hospital had billed the insurer for that service in the past year. If not, the tool directs the patient to call the hospital for an estimate.
“Ascension supports price transparency of our hospital services for the benefit of consumer choice and access to care for those we serve,” the spokesperson said in an emailed comment.
Hospitals across the country are ignoring federal requirements to publish their prices
So I came up largely empty-handed in my quest to compare prices for an MRI at hospitals in Nashville, despite the new requirements that hospitals face.
And I’m not the only patient who would have a hard time price-shopping.
A new Kaiser Family Foundation analysis of 102 hospitals across all 50 states and Washington, DC, found that about one-third of hospitals had published their negotiated prices in machine-readable files.
It also found that just three hospitals incorporated negotiated prices into their consumer tools.
A spokesperson for the Centers for Medicare & Medicaid Services said the agency is reviewing hospital noncompliance with making charges public. The penalty for not complying is $300 per day — an amount that’s been criticized for being too low.
Beyond the transparency rule, there are some other ways consumers can try to find prices. Health insurers often offer their own price-estimator tools for members, and a number of companies like Turquoise Health provide free tools to consumers to help them shop around for healthcare services.
Another Trump administration rule is set to take effect in 2022 that would force health insurers to post their negotiated rates for all healthcare providers, not just hospitals. Starting in 2023, insurers will have to have consumer-friendly tools that members can use to get out-of-pocket cost estimates for healthcare services.
Some experts expect these forthcoming rules to be more helpful to consumers, but that’s only if insurers comply.
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