Few States Have Robust Healthcare Price Transparency Laws

Massachusetts, Alaska, and Minnesota are among the states with the most comprehensive healthcare price transparency laws, which require providers, payers, or both to disclose costs to consumers, a new report revealed.

The report released by the Pioneer Institute last week found that, in total, only six states require providers, health plans, or both to give consumers cost estimates and pricing information. The majority of states (33) have no healthcare price transparency laws and just 11 states require price estimates only in certain cases, such as if a consumer is uninsured.

“Robust price transparency laws are clearly not widespread in the US,” said Barbara Anthony, a co-author of “Status of Healthcare Price Transparency Across the United States.”

Achieving healthcare price transparency is not a simple task, Anthony continued. What a consumer pays for healthcare depends on several variables, including what a hospital or provider charges, what a payer will reimburse providers, and what a consumer must pay out of pocket.

But the last value is critical to meaningful healthcare price transparency in which consumers understand what they owe for services and can compare prices for the best value. Being able to access pricing information has become more important than ever as consumers owe more out of pocket.

“It’s no surprise that patients want to know how much treatments will cost, given that health insurance policy deductibles can be more than $7,000,” Anthony said, referencing a Massachusetts survey that found 70 percent of insured workers want to know out-of-pocket costs before the point of care.

Some states have tried to shed light on blacked-out healthcare prices. However, this has led to a patchwork of policies, and even the most comprehensive healthcare price transparency laws could use some improvements, the report stated.

For example, all states could improve their online cost estimator tools by making them more consumer-friendly, making them more visible to consumers, offering incentives for members to choose high-value providers, and developing mobile-friendly versions.

States could also enact more uniform healthcare price transparency practices, Anthony and her team recommended in the report. They advised states to require or incent personalized cost estimates in all non-emergent services, create methods to educate individuals about price transparency tools and resources, and leverage cost estimator web tools.

The federal government has tried to make more uniform rules by requiring hospitals to publish their chargemasters, as well as other pricing information, including payer-specific reimbursement rates. Through CMS, policymakers have also attempted to get payers to reveal more cost estimates.

The rules are helping to advance healthcare price transparency, but that does not mean states should throw in the towel, Anthony told RevCycleIntelligence.

“Government efforts to push the issue and make it easier for all of us to understand healthcare prices will shine a light on the people’s right to know how much their healthcare costs and that's a good outcome from the CMS initiative,” she said. “However, the most important thing that consumers want to know is how much is it going to cost them specifically. In order to do that, you really have to go down to the local level.”

State governments play an important role in healthcare price transparency because they can bring payers and providers together to give residents the information they want and need to understand healthcare prices. This collaboration is key to achieving meaningful price transparency since providers and payers need to work together to determine out-of-pocket cost estimates.

“They're in a position to show leadership and say that this is what our citizens want,” Anthony stated. “And now, we have this spike in health insurance insecurity, so people really do need to know how much their healthcare costs.”

COVID-19 has had a profound impact on healthcare consumers. The pandemic has led to a dramatic increase in the unemployment rate, which is impacting the consumer’s ability to access healthcare coverage and consequently services.

“We have 33 million people out of work and a good portion of those people had employer-sponsored insurance, which they no longer have unless they're maintaining it through COBRA or on their own,” said Anthony. “People who are out of work and who do not have insurance also don't have the money to pay for healthcare.”

“That will translate into a desire to know how much healthcare costs, and in a lot of cases, it will make people more inclined to seek price information,” Anthony emphasized.

The problem is that healthcare price transparency is not available to most consumers. But the recent boom in telehealth implementation during the pandemic may help providers fill that need.

“There is a greater opportunity to have exchanges between physician offices and the patients and I hope those exchanges will result in more conversations about price,” Anthony stated. “The reason I say that is because when you're engaging in a telehealth appointment, the doctor’s administrative staff call you to set it up. In other words, their staff are making telehealth work, and those same staff can be trained to provide price information.”

This emphasis on increasing access to care should also serve as a vehicle for state governments to take action with healthcare price transparency.

“I hope that political leaders all over are cognizant of the fact that health insurance insecurity is a real issue in so many states across the nation,” Anthony concluded.  “The very least governments can do is work together with providers and carriers to make prices more transparent.”