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 is also known as the health plan transparency rule. It was issued on October 29, 2020, and the final stage goes into effect on January 1, 2024. It 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 must 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 that are covered benefits 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
Familiarize yourself with your insurance policy’s coverage details and be prepared for any expected costs. Request an Advanced Explanation of Benefits (AEOB) from your insurance company when scheduling or at least 3 days in advance of the procedure. The AEOB must include the following information:
- Network status of the provider or facility
- Contracted rate for the item or service
- Good faith estimate received from the provider or facility
- Good faith estimate of the amount covered and any cost-sharing you are responsible for
- Good faith estimate of the amount you have incurred towards meeting deductibles and out-of-pocket maximums as of the date of the AEOB
- Disclaimers indicating whether coverage is subject to any concurrent review, prior authorization, and step-therapy or fail-first protocols
- Disclaimers indicating the information provided is only an estimate based on the items and services reasonably expected to be furnished, at the time of scheduling (or requesting), and is subject to change
- Other information or disclaimers from your insurance plan
Estimating Costs Without Insurance
If you are uninsured (self-pay) or not using insurance, request good faith estimates when scheduling healthcare services. Request them from all of the healthcare providers and facilities involved in your scheduled service or procedure at least 3 business days in advance. Request to include:
- Expected charges for furnishing the scheduled service or item
- Any ancillary items or services reasonably expected to be provided in conjunction with those items or services, including those provided by another provider or facility
- Expected CPT billing and diagnostic codes for these items or services
Price Transparency Tools for Drugs and Medical Services
As more hospitals and healthcare centers comply with transparency laws and post their prices online, technology is racing ahead to help us make sense of all the data. Tools and apps are being developed to help us shop around and compare pricing.
SingleCare is a free online tool that allows users to shop around for the lowest prescription drug prices, similar to GoodRx. Crush Medical Debt recommends SingleCare, as it usually provides better prices than GoodRx. Additionally, SingleCare works for your entire family and can often beat the price of an insurance copay. Download your free SingleCare card here.
TAKEAWAYS
- Pricing transparency makes it easier to shop and compare pricing before you receive care.
- The No Surprises Act provides new protections from balance billing.
- Use SingleCare for free to shop around for the best prescription drug prices. You can use it instead of insurance if the discount is better than your copay.