Hospitals across Colorado must begin posting self-pay prices Monday for the most common procedures and treatments they offer — a potential first step in bringing more cost transparency to a sector whose pricing ambiguity has frustrated consumers and public officials alike.
The move is mandated by Colorado Senate Bill 65, a 2017 measure from Republican Sen. Kevin Lundberg of Berthoud aimed at requiring health-care providers to be able to tell people who are paying bills without the help of insurance what a procedure will cost before they get those services. Medical pricing transparency demans are gaining traction on both state and local levels.
Under the new law, health-care facilities such as hospitals must post the self-pay prices for the 50 most used diagnosis-related group codes — the most common reasons for hospitalizations — and the 25 most-used current procedural technology billing codes. Those prices can reflect the most frequent charge over the past 12 months for a service, the highest charge from the lowest half of all the charges for the service or a range that includes the middle 50 percent of all charges for the service. The facility must have performed a service at least 11 times in the past year.
Physicians’ offices and other individual health-care providers, meanwhile, are required just to post the prices for their 15 most common procedures.
The prices, however, are only those that apply to people who are paying on their own without the help of public or private insurance in a state where less than 7 percent of the population is uninsured. At University of Colorado Hospital in Aurora, the self-pay population represents only 2 percent of the patients coming through its doors and generates just 0.2 percent of its revenue.
Thus, some hospital officials worry that the new requirements will confuse patients even more than they will provide for more transparency. Prices for insured individuals will be vastly different and will depend on the contract each facility has negotiated with each insurer, and even the prices charged to most uninsured individuals can be discounted by hospitals depending on their income level.
“I definitely think we’re concerned that this might confuse patients even more,” acknowledged Dan Weaver, senior director of public and media relations for UCHealth. “Because prices are based so much on individual patients, their needs and their insurance plans, I think providing estimates really comes down to the individual patient level.”
The newest requirement is not the first attempt at transparency for many hospitals, however. The Colorado Hospital Association adopted a resolution in July saying that hospitals should post facility-fee charges for emergency-department visits and for the most common outpatient diagnostic tests and procedures by the end of 2017. Like SB 65, that sought conspicuous posting of prices online or in the facility’s main office.
Julie Lonborg, CHA vice president of communications and media relations, said that hospitals across the board are committed to the idea of transparency, even if some are struggling to meet the deadline. That is particularly true of rural medical centers, some of which may not have 50 procedures that they performed at least 11 times in the past 12 months.
“I think it will help the patients’ relationships with the hospitals, especially the trust part of those,” Lonborg said, referencing growing concern that hospital pricing can be so opaque that some patients question whether there is rationale for it. “I think to the extent that patients couldn’t find that easily, it could have put a chink in the trust relationship.”
Sarah Ellis — a spokeswoman for SCL Health, which operates Saint Joseph Hospital, Lutheran Medical Center and Good Samaritan Medical Center locally — called the efforts to list both the procedure prices and the emergency and outpatient fees “a work in progress” and said the health system hopes to learn more over time about what is most important to customers. Her organization will continue to seek advice from patient advisory groups about any changes that could help to simplify the information.
Children’s Hospital Colorado already has the emergency-department fees listed on its website and will post the other required and CHA-encouraged information on Jan. 1, said Heidi Baskfield, vice president of population health and advocacy for the Aurora hospital. However, she, like other system officials, will encourage in the price listings that anyone who has insurance should continue to work through their insurers to understand not just the cost of services but their responsibilities for deductibles and co-pays.