Hospitals failing to meet state law on price inquiries
Hospitals in Massachusetts are ill-prepared to answer consumers’ questions about the price of their care, as required by state law, according to a survey scheduled for release Wednesday.
The Pioneer Institute, a public policy think tank, found that employees at most of 22 hospitals surveyed were “flummoxed” by a question about price and took several days to provide an answer, even though the law requires a response within two days.
“Massachusetts hospitals seem to lack a culture of price transparency,” the report said. Although all but one of the surveyed hospitals eventually supplied the information, “extracting a price from hospitals posed significant challenges,” according to the report.
Consumers need the information now more than ever, because many have plans with deductibles that require them to pay thousands of dollars before their coverage kicks in, said Barbara Anthony, the state’s former undersecretary of consumer affairs and business regulation and now a senior fellow in health care with Pioneer, which favors small government and free markets.
In the Pioneer survey, the prices of an adult MRI varied from $700 to $8,000 at hospitals, and from $500 to $4,300 at imaging centers.
The price-transparency requirement, a cornerstone of the state’s landmark 2012 law intended to control the cost of health care, took effect for hospitals in January 2014. It was intended to help consumers shop for the best price, a natural part of most purchasing decisions, but impossible in health care until recently. But hospitals say that requests are infrequent, and a survey last summer found that most Massachusetts residents don’t know about the law.
The Massachusetts Hospital Association said in a statement that its members support the law, and will continue to work on raising awareness among staff members and removing obstacles to patients seeking information.
“Hospitals have been working diligently to make the complex world of health care more transparent and understandable, yet face many challenges,” the association statement said. Insurance policies vary, and a service may involve multiple components, such as physician, facility, and device fees, the association said.
But Anthony said that hospitals have had plenty of time to sort out the complexities. “The secrecy of health care prices is one of the reasons why we have out-of-control health care costs,” she said. “We all have to do our part to change that.”
Under the law, when consumers request the price of a service, hospitals and clinics have two business days to provide the amount that the consumer’s insurer would pay, or the hospital’s list price if the patient is uninsured.
To gauge compliance, the institute called 22 of the state’s 66 full-service hospitals to ask for the cost of a left-knee MRI, a common procedure. To keep it simple, the institute asked only for the hospital’s “charge” or list price, rather than the price negotiated with an insurer.
The hospital staffers who answered the phone “were flummoxed by the question. They didn’t know where to send me,” Anthony said.
After being transferred three to seven times, she and her collaborator were able to locate the employee in each hospital who had the answer. But that person often didn’t pick up the phone immediately, and days of phone tag ensued.
It took as long as six or seven days to get an answer, with an average wait of two to four business days. One community hospital south of Boston never provided a price, said Anthony, who declined to identify the facility. Additionally, only some hospitals revealed that there was a second fee, for interpreting the MRI, and that number also proved difficult to pin down.
Hospital websites offered little help in most cases, Anthony said. One exception was Boston Children’s Hospital; its website describes the law and provides an online form to request price information and a phone number. New England Baptist Hospital and Cape Cod Healthcare also had Web pages devoted to transparency that provide a phone number.
The price-transparency rules apply to hospitals, physicians, clinics, and insurance companies. In addition to the hospitals, Pioneer surveyed 10 outpatient imaging clinics, most of which readily provided the information. In the future, Pioneer intends to check on physicians’ and insurers’ performance.
Jim Graves, senior director of patient financial services at UMass Memorial Medical Center, in Worcester, said his hospital is close to purchasing software to make it easier to estimate the costs each consumer will face. Although such information is available to the billing office, a bill has to be created first to access it, he said.
“We take the law very seriously,” Graves said. Since January 2014, UMass has received 680 requests for prices. In the previous month, he said, all requests were answered within 48 hours.
Sally Mason Boemer, senior vice president of finance at Massachusetts General Hospital, said price requests were infrequent. The hospital has a centralized e-mail for staff to submit such requests to a team that knows how to get the answers. But she acknowledges that in a large organization with staff turnover, some employees may not have learned about it. In 2015, Mass. General received only 313 price requests, which Boemer said the staff answered within two days.
At Baystate Health in Springfield, chief financial officer Dennis Chalke said the hospital supports the transparency initiative and encourages patients to request information. But, he said, in a statement, “Hospital pricing is very complex, and it’s important to recognize that the move toward greater price transparency will take time.”