Rising costs, lack of transparency, fraudulent billing practices and shortcomings of the traditional broker and carrier model have led to a crisis in healthcare. Thankfully, recent federal regulations attempt to right multiple wrongs in the healthcare industry and promote transparency among hospitals–particularly in billing departments. These regulations require hospitals to publish their rates so that patients can see just how much they’ll spend on care.
This, along with new regulations to create transparency between employers and employees regarding their benefit plans, will lead to more clarity and freedom for patients in regards to their medical expenses. Here’s why it’s so critical hospitals publish their health insurance rates–especially for hardworking employees like yourself.
Understanding Recent Hospital Transparency Laws
So, what exactly are the new hospital transparency laws, and how do they hold hospitals accountable? On January 1, 2021, hospitals across the United States were officially required to provide their pricing information regarding all of the services, procedures and items they offer per the Hospital Price Transparency Rule.
According to the Centers for Medicare and Medicaid Services, hospitals had to provide this information “…as a comprehensive machine-readable file with all items and services” and “…in a display of shoppable services in a consumer-friendly format.”
How Does Hospital Cost Transparency Help Employees?
The government’s main goal here is to make sure that when patients are searching for affordable medical care, it’s clear to them what they’ll be expected to pay for their required treatments. The thought process behind the Hospital Price Transparency Rule is that, if patients are able to see what they’ll need to pay for their care, they’ll be better able to budget and thus be more financially healthy along with physically healthy.
Think about it. As an employee, you pay tens of thousands of dollars a year in combined health insurance and medical procedure costs. Instead of just accepting a cost because you aren’t aware of other options, you should have the right to know different medical costs for treatment around your area and make a cost-effective selection. Adding an additional layer of transparency shows you what you’ll be paying before receiving your hospital bill–and allows you to properly financially plan.
How Will New Hospital Transparency Regulations Impact The Traditional PPO Model?
The 2021 rules regarding hospital transparency will most impact the patients, but behind the scenes, it also impacts hospitals’ abilities to negotiate with brokers. In the past, keeping rates hidden from customers allowed flexibility for hospitals to negotiate in-network rates with major benefit brokers for Preferred Provider Organizations (PPOs).
Laws that provide patients with price transparency so they can choose where they receive healthcare have a trickle-down effect: when hospitals are required to publish their rates, they become locked into the publically-known rates.
Do Hospital Transparency Laws Actually Work?
While the federal government certainly had the best of intentions when creating the Hospital Price Transparency Rule, the first year of regulations has not proven particularly successful so far. Unfortunately, according to Fortune and PatientRightsAdvocate.org, only 5.6% of hospitals are currently compliant with this regulation. This is largely due to hospitals finding ways to hide any erroneous charges or “price gouging” they may use during the billing process and not reveal this publicly to patients.
For example, when our team at ClearChain Health reviews and audits claims for our clients, we almost always see hospital billing departments using unbundled CPT codes. Thanks to our intensive auditing processes, though, we’re able to see firsthand this lack of transparency and attempt to get more money from our clients.
In an attempt to better enforce these rules, the government created a fine system hospitals must pay as a result of their noncompliance. However, the fines hospitals pay for being noncompliant are inconsequential when compared to how much a major medical system makes each year in revenue.
Moving Forward, What Do Hospital Transparency Laws Mean for Healthcare?
These laws still give reason to be optimistic, though. Even with hospital noncompliance, the fact the federal government is recognizing and attempting to advocate for you as the consumer is good news.
Additionally, there are health insurance brokers out there who are also committed to helping you find price transparency and lower costs without sacrificing the quality of care and customer service you receive. If your company is currently looking for a new health insurance broker, consider advocating for yourself as an employee and look into programs who specialize in claims auditing, transparent pricing and trading the traditional PPO network for a direct relationship with your healthcare provider.
Health Insurance Built on Transparency, Data and Your Unique Company Needs
At ClearChain Health, our model prioritizes total transparency, fair medical billing and pricing, a direct relationship with your providers and continuing education so you best understand your benefits. Learn more about our competitive model and contact us today!