Hospitals and medical providers haven’t always been transparent with their pricing. For decades, it was normal for us to have no idea how much we owed for medical care until the bill arrived. Surprise bills were common. As a result, millions, mostly insured patients, were left in debt. But in recent years, federal lawmakers heard the cries of the indebted and passed price transparency laws to help reduce out-of-pocket medical costs.
Price Transparency Makes it Easier to Control Out-of-Pocket Costs
Price transparency laws make it easier for consumers to know the cost of a covered item or service before receiving care. These regulations aim to reduce the secrecy behind healthcare pricing to bring greater competition to the private healthcare industry. Price transparency empowers patients to shop around, compare prices, and estimate costs.
The Transparency in Coverage Rule, Hospital Price Transparency Rule, and the No Surprises Act each feature ways to access pricing information before receiving care. In addition, many states also have their own pricing transparency laws, expanding consumers’ abilities to control out-of-pocket costs.
Transparency in Coverage Rule
The Transparency in Coverage rule, also known as the health plan transparency rule, went into full effect on January 1, 2024. This law requires most group health plans and health insurance issuers to disclose price and cost-sharing information to participants, beneficiaries, and enrollees.
This includes:
- billed charges
- in-network negotiated rates
- allowed amounts paid for out-of-network providers
- negotiated rate and historical net price for prescription drugs
The Hospital Price Transparency Rule
As of January 1, 2021, the Hospital Price Transparency rules require hospitals to post their prices online free of charge.
This includes:
- gross charges
- insurance-negotiated rates
- discounted cash prices
No Surprises Act
Protections for Insured Patients
Effective January 1, 2022, The No Surprises Act puts new prohibitions on balance billing. This applies to air ambulance, emergency, and some non-emergency services or items covered under the in-network terms of a privately insured individual’s health insurance plan.
The No Surprises Act protects insured patients by banning:
- surprise bills for emergency services from an out-of-network provider working in an in-network healthcare facility
- out-of-network cost-sharing for all emergency and some non-emergency services
- out-of-network charges and balance bills for supplemental care, like radiology, lab services, or anesthesiology, by out-of-network providers that work at an in-network facility
Exceptions to the No Surprises Act
The No Surprises Act doesn’t pertain to ground ambulances and many urgent care centers. These protections don’t apply to short-term limited duration insurance (STLDI), excepted benefits, retiree-only plans, account-based group health plans, or federal healthcare programs such as Medicaid or Medicare. Furthermore, the No Surprises Act does not regulate billing for non-emergency services in the following circumstances:
- when non-emergency covered items or services are provided in an out-of-network hospital or healthcare facility
- when the items or services provided are not covered under the in-network terms of an individual’s health plan or coverage, even if provided in an in-network hospital or facility
Protections for the Uninsured and Cash-Paying Patient
The No Surprises Act also protects uninsured and self-pay (cash-paying) patients. It requires medical providers and hospitals to provide good faith estimates to the uninsured or patients who don’t use insurance for most scheduled services, upon request. If it’s at least $400 more than the estimate, you may be able to dispute your bill.
Estimating Costs
You can learn about estimating costs for many non-emergency healthcare services in our upcoming article, How to Estimate Out-of-Pocket Healthcare Costs – Without or Without Insurance.
Takeaways
- The Transparency in Coverage Rule, Hospital Price Transparency Rule, and the No Surprises Act each feature ways to access pricing information before receiving care.
- The Hospital Price Transparency rules require hospitals to post their prices online free of charge.
- The No Surprises Act provides new protections from balance billing for people with individual health insurance plans.
- The No Surprises Act also offers protections for uninsured and self-pay (cash-paying) patients.