Price transparency in health care is the idea that you should know how much a hospital will charge for items and services it provides, long before you receive a medical bill.
When health care prices are hidden, you may end up with large medical bills you can't afford to pay, putting you into debt. Some even choose to delay or skip treatment out of fear of surprise medical bills.
Price transparency empowers you to make informed financial decisions. It also helps lower health care costs by increasing competition among providers.
What the Law Says
In the United States, three laws are meant to protect you from surprise medical bills and help you manage the costs of care.
Hospital Price Transparency Rule
This law requires every U.S. hospital to give clear, accessible pricing information about the items and services it provides. Hospitals must display this information on a publicly available website in two ways:
- A comprehensive machine-readable file (a document whose content can be readily processed by computers) with all items and services
- A consumer-friendly display of services and their prices
These two lists should both include the rates that the hospitals have negotiated with insurers.
Transparency in Coverage (TiC) Rule
This applies to insurance companies. Under the TiC rule, insurers must publicly post on a website three machine-readable files that include:
- What services will cost you under your plan (in-network rates)
- What the insurer would cover if you see a doctor your insurer doesn't have a deal with (out-of-network rates)
- The prices the insurer has negotiated for prescription drugs
No Surprises Act
This law protects people with health insurance from huge surprise bills when they have an emergency. If you're rushed to a hospital, your insurance company must charge you the same lower rate as if that hospital and doctor were on your plan, no matter which hospital or doctor treated you.
Under the No Surprises Act, if you're paying out of pocket (not using insurance), your provider must give you an upfront cost estimate before your appointment. You'll get this "good faith estimate" automatically when you book care three or more days ahead, or you can request one. If your final bill comes in $400 or more over that estimate, you have the right to challenge it.
How to Manage Costs Before Treatment
To manage costs, Nicole Broadhurst, lead medical billing advocate with Tennessee Health Advocates in Crossville, Tennessee, suggests working through six questions before you receive any treatment.
Six questions to ask before any procedure
- Is my doctor in-network? Check whether your doctor is part of your health plan's network of providers with which it has negotiated a discount.
- Is the hospital or clinic in-network? Your doctor can be in-network while the place they work in is not. Check both.
- Who else might send me a bill? Ask your doctor who else will be involved in your care. For surgery, for example, that might include an anesthesiologist and a laboratory that does your blood tests. Make sure they are all in-network.
- What are the CPT codes for my procedure? A CPT code is a five-digit number that identifies a specific medical procedure. Ask your doctor's office which codes they plan to use. Once you have those codes, you can get an accurate estimate of out-of-pocket costs using online cost estimator tools.
- What will I actually owe? To estimate the amount left for you to pay after your insurer has paid its share, log into your insurer's online portal, find the "cost estimator" tool, and enter your CPT codes.
- What is the cash (self-pay) price? Once you know what the procedure will cost you through insurance, ask the provider what they charge patients who pay cash. The cash price is on average 39% less expensive.
Check what a fair price looks like
To see if the price of a health service is within normal local ranges, Broadhurst recommends using a price comparison tool. Examples include:
- TryBilly.app
- Healthcare Bluebook
- FairHealthConsumer.org
When you enter the CPT codes for your medical procedure, together with your ZIP code, these tools give you the average market price for that service in your area.
Shop around
You should also compare how much the same service will cost you at different locations.
For scans, X‑rays, and laboratory tests, Broadhurst recommends looking at independent centers, because these usually charge less than hospitals.
The ability to shop around can also save you a lot of money on medical procedures — if you are willing to change your doctor or hospital. "Sometimes people like their physician, they like the health system that they're in, and they don't want to leave it, and that's completely understandable," says Broadhurst.
How to Manage Costs After Treatment
Even if you do your homework before you get care, you may still receive a bill that seems too high. Sometimes bills have errors. Here is what to do.
Check to see if the bill is correct
When you receive any hospital bill, Broadhurst recommends that you compare it with the "Explanation of Benefits" (EOB) you receive from your insurer. The EOB is a summary that shows:
- "Provider Charges" — the amount your provider bills for your visit.
- "Allowed Charges" — the amount your provider will be paid, which may be different from the Provider Charges.
- "Paid by Insurer" — the amount your health plan will pay to your provider.
- "What You Owe" or "Patient Balance" — the amount you owe after your insurer has paid everything else.
Before you pay a hospital bill, compare the amount your provider is billing you with the "Patient Balance" amount on your EOB. Those two numbers should match, says Broadhurst.
If your bill is higher than the "Patient Balance," go back to the provider with that information.
If your medical procedure was an emergency, check whether your insurer handled it as in‑network, as they should do, according to the No Surprises Act. Sometimes insurers make mistakes too.
Find out if the price is fair
Even when a bill is processed correctly, the amount can still be inflated. Use your CPT codes and a price comparison tool to compare what you are being charged to the local average. If your bill is well above that average, you have grounds to push back, says Broadhurst. She suggests going back to the provider and offering to settle the account for the fair market value instead of the higher amount on the bill.
Practical Limitations You Should Know About
Not all hospitals follow the law
Many hospitals are still not following the federal law that requires them to show their prices.
If you can't find prices for medical services online:
- Call the hospital and ask for the prices.
- Report the hospital to the Centers for Medicare and Medicaid Services (CMS) on the CMS website.
- Write to the hospital's leadership team to let them know they are breaking a federal law that gives you the right to see prices online.
Exceptions to the No Surprises Act
The No Surprises Act protects you from unexpected bills during an emergency, when you are treated by providers or hospitals outside your plan — but only for services your insurance was supposed to cover. If your plan never covered a service to begin with, this law can't help you.
If you get a bill you can't afford, call and ask about financial assistance, says Broadhurst.
Show Sources
Photo Credit: iStock/Getty Images
SOURCES:
Nicole Broadhurst, BCPA, lead medical billing advocate, Tennessee Health Advocates LLC, Crossville, Tennessee.
Centers for Medicare & Medicaid Services: "How To Get the Most Out Of Hospital Price Transparency," "Hospital Price Transparency Fact Sheet," "No Surprises Act Overview of Key Consumer Protections," "Know your rights when you aren't using health insurance," "How to read an explanation of benefits (EOB)."
Patient Rights Advocate.org: "FAQs," "How to Shop for Healthcare."
Thomson Reuters Practical Law: "Transparency in Coverage (TiC) Under the ACA Toolkit (PHSA Section 2715A)."
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