Long pricing lists with multiple line items are confusing for patients.
A new Federal rule mandating hospitals post prices on their respective websites hasn’t enjoyed a smooth rollout. The rule, baked into the Affordable Care Act via the Department of Health and Human Services, requires hospitals to make their prices public. The requirement took effect on January 1st, but seems to be leaving consumers more confused than anything.
Chief among consumer complaints is that hospitals have too many listings for one procedure. Long pricing lists, also known as chargemasters, are accompanied by medical codes that need translation. The Federal rule has no set of standards for posting the prices, leaving the pricing disclosures to be lengthy and needing explanation, defeating the purpose of the requirement.
The second issue is the rates posted do not reflect what a patient will actually pay, but are what’s called “rack rates”. Rack rates are prices that insurance companies negotiate down. While these rates may be interesting for patients, most patients are more interested in what they will pay out-of-pocket. To provide accurate out-of-pocket rates, a hospital would likely have to factor in a patient’s insurance, as each insurance type, including medicaid and medicare would have it’s own negotiated rates. If true transparency is the goal, it’s going to take hospitals more than posting chargemasters. Hospitals will likely have to adopt a something akin to a quoting platform.