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Price transparency? A new Medicare rule requires hospitals to post their standard charges online

Times-News - 1/6/2019

Jan. 06--TWIN FALLS -- If you're looking for information about how much a hospital can charge you for different medical procedures or lab work, you can now find it online.

Under a new rule that aims for more transparency in health care costs, Medicare is requiring hospitals to post their standard prices online and make electronic medical records more readily available to patients, The Associated Press reported in late December. The program is also starting a comprehensive review of how it will pay for costly new forms of immunotherapy to battle cancer.

The rule affects hospitals nationwide, including here in south-central Idaho, and it's not just for big hospitals. In addition to St. Luke's Magic Valley Medical Center, the requirement affects small, critical access hospitals like the St. Luke's Jerome and Wood River medical centers, North Canyon Medical Center in Gooding, Cassia Regional Hospital in Burley and Minidoka Memorial Hospital in Rupert.

South-central Idaho's hospitals have met the new requirement on time, but say while the step toward pricing transparency in a good one, the information may be complex for patients to navigate. Plus, patients are generally more interested in their own insurance coverage and how much they'll end up paying of pocket.

"One of the most meaningless numbers to a patient who has insurance is what a hospital charge is," said Matt Morishita, senior director of revenue integrity for the St. Luke's Health System.

What's more valuable, Morishita said, is what patients can expect to pay out of pocket. "That's really the lens we're going to look at this as."

St. Luke's list of standard charges -- which is posted on the health system's website on the cost estimator page -- is essentially everything St. Luke's can bill a patient for, he said. That includes supplies, procedures performed, lab services and in-patient room rates.

A standard charge, though, "doesn't necessarily represent the price you'll actually pay for your service," he said.

St. Luke's is still encouraging patients to contact their insurance company for coverage information and to use its cost estimator tool online.

Seema Verma, head of the Centers for Medicare and Medicaid Services, said the new requirement for online prices reflects the Trump administration's ongoing efforts to encourage patients to become better-educated decision makers in their own care, the Associated Press reported.

The Medicare rule is the first step in creating pricing transparency, Morishita said, adding it wants to work to prevent any billing surprises for patients. Fewer than 25 percent of hospitals provide cost estimates based on insurance, he added. "St. Luke's is in the infancy phases of that."

Figuring out exactly what the U.S. Centers for Medicare & Medicaid Services wanted in the standard price list was a process. "As with most CMS guidelines, they're very gray," Morishita said. "They're not descriptive with what they're looking for."

CMS put out multiple "frequently asked questions" summaries to clarify the rule and outline expectations for what should be in each hospital's file, Morishita said.

St. Luke's has known about the CMS rule since it came out this summer, he said, and was finalized in November.

It wasn't a ton of work complying with the requirement, Morishita said, estimating it took maybe 40 hours in total. The biggest process was "researching what CMS really wanted to have in the files to be in compliance."

CMS requires the file to be a "machine-readable format," Morishita said. St. Luke's used a CSV (comma-separated values) file. As far as the formatting, "it's not going to be very pretty."

At Minidoka Memorial Hospital in Rupert, chief financial officer Jason Gibbons said he's hesitant to say the list of standard charges will be "really useful" for a patient. Patients still have to navigate their own insurance coverage. "Every patient really has to know what their coverage is like."

But "CMS is trying to empower the patient and we totally understand that," Gibbons said. "I hope it doesn't create more confusion."

Minidoka Memorial Hospital patients are welcome to call the hospital to get a cost estimate, he said.

The hospital posted its standard charges on its website Dec. 28. It wasn't a challenge to compile the list, Gibbons said, because the chargemaster file already existed. But hospital officials did organize the information by department -- such as radiology and laboratory -- to try to make it easier for patients to navigate.

The biggest problem: The hospital doesn't host its own website. A CSV file tends to be considered malicious on a hosted website and the website provider was reluctant to host that file, Gibbons said. "As a small facility, that really has been our biggest challenge."

The hospital temporarily converted the file to a PDF document, Gibbons said, adding they'll work through a process to create something like a Google Drive account to allow for a machine-readable file format.

Another challenge: As a critical access hospital, CMS doesn't require Minidoka Memorial Hospital to use CPT codes for billing, Gibbons said. That means patients trying to make price comparisons with other hospitals wouldn't necessarily be able to do that without a CPT code, he said. "We're hoping it doesn't create more confusion than it's worth."

Officials at Cassia Regional Hospital in Burley -- part of Salt Lake City-based Intermountain Healthcare -- declined to comment on the new Medicare rule, but Intermountain issued a statement.

The statement says there are "better options" for patients to get information, including Intermountain and SelectHealth's online cost estimator tools. It also says medical record information has been online for more than a decade via the Intermountain Health Hub app.

At North Canyon Medical Center, the new Medicare rule is "a step in the right direction making all health care providers accountable for what their pricing is," CEO Tim Powers said.

But a machine-readable format required by CMS "doesn't mean the general public can understand it," Powers said. North Canyon's chief financial officer cleaned up the formatting the best she could "so when the consumer opened it, they're not overwhelmed by looking at the data."

Before the Medicare rule was handed down, North Canyon had already been talking about improving pricing transparency -- a topic that has been discussed for more than a year.

"The consumer out there is getting to be pretty knowledgeable and is doing a much better job of shopping," Powers said, and the cost for patients is a huge component of their decision about where to seek care. "Quality is obviously a huge element of it, but in this day and age, economics is playing a huge role in patients making the determination of where they want to get their health care at."

St. Luke's has a robust cost estimator tool on its website, Powers said, North Canyon is trying to replicate.

North Canyon has the cost of some of its most common services -- including x-rays, lab work, imaging tests and family medicine visits -- pulled out on its website to try to make it as early as possible for patients to find, hospital spokeswoman Shellie Amundson said. Information has been available since last August and the new CMS list of standard charges was posted Dec. 31.

North Canyon receives a lot of phone calls from patients wanting to know exactly what they owe, Amundson said. Hospitals can't post what every insurance company will cover, she said, since there are so many plans and it would be impossible to do.

Patients have to understand what their own insurance coverage is, Powers said. "It's not an easy process for the consumer to make."

North Canyon will provide as much detail as possible, Powers said, but it can only be boiled down so far.

"Health care continues to be a very complex set of pricing variables out there."

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The Associated Press contributed to this story.

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