By: HUB’s EB Compliance Team
As has been reported in various news outlets (see here, here, and here, for example), new rules issued last year now require hospitals to post their standard charges for various services on their websites. This is part of a move toward greater hospital pricing transparency in the health care provider market. The requirement to post these amounts comes from the Affordable Care Act.
However, as noted in the articles above, the prices posted are likely to be of limited use. First, the amounts posted are the “full price” amounts, sometimes referred to as “rack rates” or the “chargemaster.” As benefits professionals know, almost no one actually pays these prices. Insurance companies and third-party administrators negotiate discounts off of these prices. Further, the consumers who are covered by insurance may only pay a portion of these rates through copayments or coinsurance. Finally, even uninsured consumers may negotiate discounts off of these prices.
Additionally, in many cases, the items or services listed are given highly technical, often confusing names. Even an experienced health care professional may have trouble understanding them. Additionally, a single hospital procedure may involve multiple listed amounts, so the total charge for a procedure may require some sleuthing around on the website to figure it out.
The Takeaway
It seems unlikely that most employees will get much use out of these posted prices. However, to the extent employers receive questions from their employees, the employers should be prepared to respond. Specifically, employers should point out that the charges on the website do not reflect the discounts negotiated by their insurance carrier or TPA.
If an employee wants to know what he or she will be charged for an item or service, the employer should suggest that they contact the carrier with their questions. Many carriers are also offering price transparency tools that reflect the discounts of the employer’s plan. If those tools are available, the employer may want to mention that as well.
If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory.
NOTICE OF DISCLAIMER
The information herein is intended to be educational only and is based on information that is generally available. HUB International makes no representation or warranty as to its accuracy and is not obligated to update the information should it change in the future. The information is not intended to be legal or tax advice. Consult your attorney and/or professional advisor as to your organization’s specific circumstances and legal, tax or other requirements.