A new government rule requiring hospitals to disclose the rates that insurance companies pay them has drawn the ire of the hospital industry.
Industry professionals maintain the figures provide consumers with little information of value.
“We believe the required hospital charge data is overwhelming for patients,” said a UnityPoint Health statement provided by spokeswoman Ann Cannon, of UnityPoint Health-Finley Hospital in Dubuque. “Hospital charges alone do not provide a complete picture of what patients owe.”
The federal rule, which took effect this month, goes a step further than several implemented in 2019, which required that hospitals post a master list of all charges.
Now, hospitals must disclose prices they have negotiated with insurers for all procedures along with the discounts they provide consumers who pay out of pocket. The disclosures do not identify the insurance companies.
Additionally, hospitals must post cost estimates for 300 common, “shoppable” procedures, such as diagnostic imaging, blood tests and psychotherapy.
The Trump administration has touted the requirements — and a rule that in 2022 will require insurance companies to disclose pricing — as critical tools that help consumers make informed choices when seeking medical care.
For example, a pregnant patient seeking a cesarean delivery might choose a Dubuque hospital after comparing hospital charges within UnityPoint’s network of facilities.
Without health insurance, her bill would total an estimated $15,837 at Finley after she received a nearly $4,000 hospital discount for paying out of pocket.
But the same procedure at UnityPoint Health-Meriter Hospital in Madison, Wis., would cost $22,563. At UnityPoint Health-St. Luke’s Hospital in Cedar Rapids, Iowa, the charge is $17,282.
But trade professionals said comparing facilities poses challenges because insurance companies negotiate rates using multiple measures. Some pay hospitals by the day, while others use hospitals’ performance.
Costs also do not include services administered by nonhospital employees, including contracted practitioners, who establish their own charges.
Cannon said patients would be better informed if they call their health care facility or insurance provider to obtain a cost estimate.
MercyOne Dubuque Medical Center spokeswoman Jennifer Faley echoed the sentiment. Both facilities have for years offered price estimates in advance of scheduled procedures.
Hospital associations also argued the disclosure of negotiated rates enables insurance companies to use the information as leverage to pay hospitals less, particularly to smaller facilities that lack bargaining power.
“In many areas of the country, especially in small and rural areas in Iowa and Illinois, health insurers have the advantage,” said Danny Chun, spokesman for Illinois Health and Hospital Association. “They will try to get away with paying the lowest rates they can.”
Meanwhile, he said, larger hospitals could demand additional payment if they see insurance companies paying competitors substantially more. That leaves patients on the hook for costlier procedures, Chun said.
So how much would that cesarean delivery actually cost?
If the patient held a UMR UnitedHealthcare health insurance policy, she could expect to have a deductible and co-pay.
According to UnityPoint’s online cost calculator, the patient would be responsible for costs totaling $2,610. With the same insurance policy, the cesarean at Meriter might cost $3,277, and at St. Luke’s, $2,832.
But those estimates apply only if the birth is a textbook case.
Posted charges represent averages, said Molly Wiegel, chief operating officer at Memorial Hospital of Lafayette County (Wis.). Complications could emerge.
“We never know what is going to happen during a procedure,” she said.