Healthcare has long been known for asymmetrical information. Patients see a doctor, whether at a clinic or hospital, yet they rarely know when going in how much the visit will cost them. Over the past few years, CMS has been working to close this information gap, requiring hospitals to disclose prices for their most common procedures.
Previously this data was disclosed in a raw format that was not actually useful to most patients. While this followed the letter of the law, it did not follow the spirit, causing CMS to come back in 2019 and clarify that prices need to be disclosed in a user-friendly format. The American Hospital Association naturally objected to these regulations and filed suit. On June 23rd the US District Court ruled in favor of HHS and CMS upholding the transparency law. This will give patients valuable information as they make their healthcare decisions.
The transparency law also applies to health insurance plans. They will be required to disclose their negotiated rates with providers, giving patients who are not visiting hospitals, more information as well. It is worth noting that some states have also enacted transparency laws of their own. Colorado requires that providers list prices for their 15 most common procedures and several other states have created their own policies, however, it is still not common. This federal ruling will give consumers a better idea of what price tag to expect when going in to visit their provider.
From a medical billing standpoint, this can work to our advantage. Many providers want to know what kind of contracts their competitors have and if they are being paid market rate. This allows for an opportunity to renegotiate contracts and ask for better rates. This benefits both the providers and the billing company. With increased transparency, medical billing companies can continue to provide valuable insight into the market and support their clients more thoroughly.