Price transparency for healthcare procedures has been proposed as a means of allowing individuals to “shop around,” just as one would before purchasing any expensive item, such as a car or an airline ticket. However, despite a federal mandate that hospitals publish price lists, comparing prices among hospitals can be very confusing, and information remains limited, according to a new study.
The study evaluated one standard option for the treatment of prostate cancer ― intensity-modulated radiation therapy (IMRT). When researchers tried to compare prices for this treatment across 63 National Cancer Institute (NCI)–designated cancer centers, they found that information was largely inconsistent or missing.
For example, although most centers (84%) did publish the cost of the procedure on their website, three did not, and eight did not list the costs for any procedure.
The prices varied greatly between the centers, with a nearly 22-fold difference in price between the least expensive and the most expensive hospital. Descriptions of procedures were inconsistent across the board, and prices were listed for only a single procedure, not the entire course of care. In addition, the average price quoted was 10 times the Medicare reimbursement rate.
The study was published online January 16 in JAMA Oncology.
“The idea of the ruling was to make it easier for the public to see what they were paying for procedures,” said lead author Trevor Royce, MD, MPH, assistant professor of radiation oncology at the University of North Carolina School of Medicine and the Lineberger Comprehensive Cancer Center, Chapel Hill. “We applaud the intention of the regulation, but it falls short of the ultimate goal.”
Royce told Medscape Medical News that one issue that has not been discussed is that the posted prices are not what the patient actually pays. “Prices are negotiated between the hospital and the insurance company, so this is just the list price,” he said. “It’s not representative of what they pay out of pocket.”
Thus, even if one center is more expensive than another, the patient may pay a lower price at the more costly hospital because of negotiated fees, he noted.
As of January 2019, the Centers for Medicare & Medicaid Services (CMS) has required that all hospitals publish their chargemasters in order to help patients understand their financial liability and compare costs in different facilities.
The chargemaster is a comprehensive listing of standard prices of services and procedures that are billable to a hospital patient or a patient’s health insurance provider. Royce explained that the chargemaster lists line-item costs and that the costs are not bundled together. “This can be a source of confusion, as the patient often doesn’t know what kind of services they need, and this information can be difficult to decipher,” he said. “We as physicians are trained to know what to look for, and even we had a fair amount of trouble with this.”
Limited Value for Now
For their study, Royce and colleagues identified the available published chargemasters for NCI-designated cancer centers in February 2019 and determined the charge per fraction of IMRT, a standard of treatment in prostate cancer.
Of the 52 hospitals that listed a fee for a standard 28-fraction treatment, the charges ranged from a low of $18,368 to a high of $399,056 (mean, $111,728.80).
For the remaining 11 hospitals, three facilities (5%) did not publish a chargemaster; the other eight (13%) did post a chargemaster, but the price for simple IMRT was not listed.
There were also differences in terminology used in the chargemasters. Of the centers that did list the charges, three (6%) posted a current procedural terminology code, but the other facilities used various terms to describe the treatment; such terms included “IMRT simple,” “intensity mod rad tx simple,” “imrt,” “rad tx,” “imrt prostate and breast,” “intensity modulated,” “tx delivery,” and “imrt radiation tx dlvr simple.”
Royce noted that CMS has sought to address the issue of negotiated rates by updating the original ruling so as to require hospitals to publicly post both standard charges for specific services and the actual prices that were negotiated with private insurers. The new requirement was announced on November 15, 2019, and is scheduled to go into effect on January 1, 2021.
The new ruling would require hospitals to list all gross charges, negotiated fees, a self-pay rate, and a minimum and maximum negotiated charge for all services in the chargemaster. In addition, hospitals would be required to post online in a consumer-friendly format the minimum and maximum negotiated charges for 300 common “shoppable services.”
Although these requirements would increase transparency, there would continue to be problems. “Charges would still be difficult to understand if they are broken down by line items,” Royce said.
“This has the potential to be a much more impactful step in achieving health care price transparency, but it is not clear when this will be implemented, as several hospital groups have filed a lawsuit against the US Department of Health and Human Services in federal court regarding this rule,” said Royce.
The hospital groups that are challenging the ruling include the American Hospital Association, the Association of American Medical Colleges, and the Federation of American Hospitals.
“This information also may lead to a more competitive health care marketplace, which could drive down costs if hospitals compete for patients,” he said in a statement.
JAMA Oncol. Published online January 16, 2020. Abstract
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