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Colorado signs law mandating that hospitals post self-pay prices

The "Transparency in Health Care Prices Act," has good intentions but pricing transparency has mixed results thus far.

Susan Morse, Senior Editor

A new law in Colorado that went into effect Monday mandates hospitals to post the self-pay prices of common procedures.

The Colorado Senate bill had the motive of price transparency. Legislators want patients to get prices from their providers without having to go through their health insurer for an estimate, according to the Denver Business Journal.

[Also: New Anthem policy cuts hospital outpatient payment for MRIs, CT scans in 5 states]

As high-deductible insurance plans become the norm, price transparency has been touted as a way to get consumers more involved in the cost of their healthcare to compare, for example the variation in the cost of imaging services.

This past summer, Anthem said it would no longer pay hospitals in five states for outpatient imaging services for MRIs or CT scans, since these services could be as safely provided and cost less at freestanding facilities.

[Also: Battle over price transparency rages in Ohio, where new laws like Ohio's Healthcare Price Transparency Law are in limbo]

Bringing down the cost of healthcare requires patient involvement, but so far most consumers have shown a marked lack of interest in comparison shopping.

It's not that people aren't willing to go out of their way, or trade hospital prestige or distance to save money, according to a new KelloggInsight report. It's just that pricing is not being presented in a simplified enough way for consumers to make informed decisions, according to Elena Prager, an assistant professor of strategy at Kellogg.

The Colorado "Transparency in Health Care Prices Act," is meant to simplify pricing, but in searching for prices at two acute care hospitals in the state, it's difficult to make an apple-to-apple comparison.

Denver Health is an urban acute care hospital. Its self-pay pricing is listed on its website under the heading "For Patients and Visitors" and the subheading for billing and insurance.

It encourages patients without health insurance and who plan to pay for care directly to contact Denver Health's financial counseling department. It also comes with the caveat that the prices may not reflect the total amount a patient may owe after receiving healthcare services.

The pricing does not include professional physician fees, medications, medical devices, or rehab or home health services, the Denver Health site says.

The Delta County Memorial Hospital is also an acute care provider in a more rural setting about 240 miles from Denver. It also lists a number to call for payment options and a disclaimer that prices are an estimate for services without complications.

At Denver Health, childbirth delivery without complications is $4,736.44. At Delta Memorial,  the same DRG 775 for a vaginal delivery without a complicating diagnoses is $9.068.18 

Other procedures do not readily match up.

At Denver Health, disorders of personality and impulse control is among the costliest, at $32,154, as is infectious and parasitic diseases, including HIV with an operating room procedure, at $34,219.

Under outpatient surgery, Denver Health lists a price of $25,430 for evaluation and insertion of catheters for a complete heart block and $2,382 for the removal of a cataract with insertion of a lens.

It was hard to find comparisons for the same procedures at Delta Memorial.

Delta has both a physician and facility price sheet, something the Denver system does not have.

The facility price sheet lists discounts based on income, with individuals making $30,000 or less a year receiving a 25 percent discount. The discounts get lower with income, but even those making $71,000-plus get a 10 percent discount.

It's not that patients would be making a choice between two hospitals that are four hours apart, but the sites show that trying to pin down pricing for comparison may be difficult.

Denver Health Associate CFO Christine Clark said "We do have concerns that this will make the issue more confusing to patients as there is not a 'one size fits all' approach to providing patients estimates due to the wide variability insurance plans bring to the process. Providing a self-pay price for a service is probably the least complicated."

Clark added, "There is always some variability in the price of procedures due to different patient needs."

Denver Health expects the law to have no effect on revenue cycle. Many of the uninusured who get care at Denver Health are enrolled in Medicaid or the Colorado Indigent Care Program or through an internal charity care program. The health system is a safety-net provider that in 2017, served about 220,000 patients.

Delta County Memorial Hospital said its pricing transparency site hasn't had a lot of traffic as yet. CEO Jason Cleckler said it's still new and not everyone knows it's there.

"The majority of people still pick up the phone and call and say, 'I'm going to have this procedure done, what is it going to cost?'" Cleckler said. "We welcome it. Healthcare is becoming more and more consumer driven. We have to embrace it to be successful." 

He believes consumers will comparison shop. 

Montrose Memorial is about 25 miles to the south and there are three other hospitals 40 to 50 miles away.

"They are shopping around," Cleckler said. "I know people (looking) for radiological exams have shopped as far away as Salt Lake City, that's an hour's drive."

If comparisons are difficult, it may be because different hospitals offer different procedures.

Also, "charges in healthcare are a complex thing" Clecker said.

In their own looking around, hospital executives said they found Delta County Memorial was "a little under here and over there, but most prices within the region are comparable."

Putting their pricing on the website pushes them to make sure their current chargemaster prices are current and in-line with the region. 

The posting required extra staff time. The hospital prices will be updated yearly, he said.

"It will help people to better budget for healthcare. and work out a payment plan if needed," Cleckler said. "I do think it will have some positive effects on our revenue cycle."

The Colorado Hospital Association said it has long supported efforts to expand price and quality transparency.

"We supported Senate Bill 17-065 – Transparency in Direct Pay Health Care Prices – because we believe it will be an important first step for providing more information for consumers that will help them make informed decisions about their health care. Since the bill passed and was signed into law, our member hospitals and health systems have been working diligently to compile the information and publish it in a way that will be meaningful for their patients," CHA said by statement.  

Twitter: @SusanJMorse

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