Why Hospitals and Health Insurers Didn’t Want You to See Their Prices

That year, the federal government ordered hospitals to release a valuable secret: a full list of the prices they are negotiating with private insurers.

The professional association of insurers had called the regulation unconstitutional and said it would "undermine competitive negotiations". Four hospital associations jointly sued the government for blocking it and appealed when they lost.

You lost again, and seven months later, many hospitals simply ignore the request and do not post anything.

But data from hospitals that met the requirements suggests why the powerful industries wanted this information to remain hidden.

It shows that hospitals charge their patients very different amounts for the same basic services: procedures as simple as an X-ray or a pregnancy test.

And it provides numerous examples of large health insurers – some of the world's largest companies with billions in profits – negotiating surprisingly unfavorable rates for their customers. In many cases, insured persons get higher prices than if they pretend to have no insurance cover at all.

At the University of Mississippi Medical Center, a Colonoscopy Costs …

$ 1,463

with a Cigna plan.

$ 2,144

with an Aetna plan.

$ 782

completely without insurance.

Until now, consumers had no way of knowing what prices they and their insurers would pay before they were billed. Some insurance companies have refused to provide the information when asked by patients and employers who have hired the companies to provide coverage.

This secrecy has allowed hospitals to tell patients they are getting “steep” discounts while still charging them many times what a public program like Medicare is willing to pay.

And it left insurers little incentive to negotiate well.

The special economy of health insurance also helps to keep prices high.

How to search for prices in your hospital (if any) ›

Customers judge insurance plans based on whether their preferred doctors and hospitals are covered. The insurer may also not have strong motivation as the more it is spent on care, the more an insurance company can make.

Federal regulations limit insurers' profits to a percentage of the amount they spend on care. And on some plans involving large employers, insurers don't even use their own money. Employers pay the medical bills and give insurers a cut in costs in exchange for administering the plan.

More and more patients have cause for concern when their insurer negotiates a bad deal. More Americans than ever are enrolled in high-deductible plans that hold them responsible for thousands of dollars in costs before coverage begins.

Patients often struggle to afford these bills. Sixteen percent of insured families currently have medical debts with a median amount of $ 2,000.

Even if employees hit their deductible, they may have to pay a percentage of the cost. And in the long term, the high prices trickle down in the form of higher premiums, which rise nationwide every year.

At the University of Pennsylvania Hospital, a pregnancy test Costs …

$ 18

for Blue Cross patients in Pennsylvania.

$ 58

for Blue Cross HMO patients
in New Jersey.

$ 93

for Blue Cross PPO patients
in New Jersey.

$ 10

completely without insurance.

Insurers and hospitals state that looking at a handful of services does not give a complete picture of their negotiation and that the data files published do not take into account important aspects of their contracts, such as rewards for providing quality care.

These rate charts are not helpful to anyone, ”said Molly Smith, vice president of public policy for the American Hospital Association. "It's really hard to say that if a lot of hospitals tried hard to keep the rule, I would put it aside and avoid it."

The professional association of insurers described it as an "anomaly" that some insured parties received lower prices than those who paid in cash.

Insurers want to make sure they are negotiating the best possible deals for their members to ensure their products have competitive premiums, ”said Matt Eyles, CEO of America’s Health Insurance Plans.

The five largest insurers – Aetna, Cigna, Humana, United and the Blue Cross Blue Shield Association – declined all requests for interviews. Cigna, Humana and Blue Cross have issued statements supporting price transparency.

The obligation to publish prices is a rare bipartisan effort: a Trump-era initiative backed by the Biden administration. However, it was difficult to make any meaning out of the data, especially for consumers.

The New York Times teamed up with two University of Maryland-Baltimore County researchers, Morgan Henderson and Morgane Mouslim, to turn the files into a database showing how much primary health care costs in 60 major hospitals.

The data does not yet show that an insurer always gets the best or worst prices. Small health insurance companies with seemingly little leverage sometimes negotiate the five insurers that dominate the US market. And a single insurer can have half a dozen different prices within the same facility, depending on which tariff was chosen in the open enrollment and whether it was bought as an individual or through work.

But the disclosures are already turning upside down the basic math employers and customers have used in trying to get good business.

Little of people who carefully weigh two plans – opting for a higher monthly cost or a higher deductible – they may choose a much worse price if they need care later.

Even with simple procedures, the difference can be thousands of dollars, enough to eliminate potential savings.

At Aurora St. Luke & # 39; s in Milwaukee, at M.R.I. costs United members …

$ 1,093

if they have United's HMO plan.

$ 4,029

if they have United's PPO plan.

It's not that employers can share this information with open enrollment: they usually don't know either.

It's not just individual patients who are in the dark, ”said Martin Gaynor, a Carnegie Mellon economist who studies health pricing. “Employers feel in the dark. Governments feel in the dark. It's just amazing how much we don't know these prices. "

A vital drug, a secret price

Take the problem Caroline Eichelberger faced after a stray dog ​​bit her son Nathan at a campsite in Utah last July.

Nathan's pediatrician examined the wound and found it was not serious. But within a week, Nathan needed an injection to prevent rabies, which was only available in emergency rooms.

Ms. Eichelberger took Nathan to Layton Hospital in Layton, Utah, near her home. It hasn't released pricing data for a rabies vaccine, but the largest hospital in the same healthcare system, Intermountain Medical Center, does.

Nathan, then 7 years old, was given a child's dose of two drugs to prevent rabies. The bill also included two drug administration fees and an emergency room use fee.

Intermountain owns a regional insurer called SelectHealth. It currently pays the lowest price for these services: $ 1,284.

In the same emergency room, Regence BlueCross pays BlueShield $ 3,457.

Ms. Eichelberger's insurer, Cigna, pays the most: $ 4,198.

For patients paying cash, the fee is $ 3,704. Half of Intermountain's insurers pay higher rates than the “cash price” paid by people who either don't have insurance or don't use it.

This pattern occurs in other hospitals, sometimes with more drastic consequences for adults who require higher dosages.

Prices for a drug that prevents rabies

The charts only include private insurers. Prices reflect the typical dose for a 160 pound person.

The prices were still a secret when Brian Daugherty went to an emergency room near Orlando, Florida, to get a rabies shot after a cat bite last summer.

I tried to get some pricing info but they made it seem like it was so rare that they couldn't figure it out for me, ”he said.

He went to AdventHealth Orlando because it was near his home. That was an expensive decision: it has the highest rabies vaccination price among 24 hospitals that included the service in their newly published records.

The price there for an adult dose of the drug that prevents rabies varies from $ 16,953 to $ 37,214 – not including the emergency room fee usually associated with it.

Mr. Daugherty's total bill was $ 18,357. According to his insurer's contribution, he owed $ 6,351.

It was a complete shock when I saw they wanted me to pay that much, ”said Mr. Daugherty, who eventually negotiated the bill down to $ 1,692.

In a statement, AdventHealth said it was working to "make consumer charges more consistent and predictable".

If Mr. Daugherty had driven two hours to the University of Florida flagship hospital, the total price – between him and his insurance company – would have been about half that.

Similar differences can be found in all types of basic care.

One way to look at the cost is to compare it to the tariffs paid by Medicare, the government program that covers the elderly. In general, Medicare pays 87 percent of care costs, according to estimates by the Hospital Association.

In several hospitals, major health insurers pay more than four times the Medicare rate for a routine Colonoscopy.

The charts only include private insurers.

And for one M.R.I. scan, some pay more than ten times what the federal government is willing to pay.

The charts only include private insurers.

Health economists think that insurers are essentially buying in bulk and using their large membership to get better deals. Some were stunned to see numerous cases of insurers paying more than the cash rate.

Whether or not these cash rates are available to insured patients will vary from hospital to hospital, and even if they were, these payments would not count towards a patient's deductible. But the fact that insurers pay more than they do raises questions about how well they bargain, experts said.

The worrying thing is that the third party you pay to negotiate on your behalf isn't doing as well as you would on your own, ”said Zack Cooper, a Yale economist who studies healthcare pricing.

They don't want their secrets out there

Employers are the biggest buyers of health insurance and would benefit most from lower prices. But most choose plans without knowing what they and their workers will be paying.

To find out the prices, they would have to get quotes for a new plan, which can frustrate employees who do not want to switch providers.

It also requires employers to hire lawyers and consultants, which costs about $ 50,000, estimates Nathan Cooper, who administers health services for a union group that represents sheet metal and air conditioning workers in Colorado.

If you want the prizes, you have to spend them, ”he said.

In hospitals of the Erlanger Health Systems in Tennessee, administration of a Flu shot Costs …

$ 104

with a blue cross plan.

Employers who do this sometimes get nothing.

Larimer County, Colorado includes 3,500 workers and their families in its health plan. In 2018, district officials asked their insurer to split the negotiated tariffs. It refused.

We have the problem up to the C.E.O. “Said Jennifer Whitener, the county’s human resources director. "You said it was confidential."

Ms. Whitener, who had previously handled employer insurance contracts for a major health insurer, decided to offer the contract again. She requested new proposals that included a question about insurance rates in local hospitals.

Half a dozen insurers have bid on the contract. All but one completely skipped the question.

They don't want their secrets out there, ”Ms. Whitener said. "They want to be able to communicate that they have the best deal in town, even if they don't."

Hospitals and insurers can also hide behind the contracts they have concluded, which often prohibit them from disclosing their tariffs.

We had gag orders in all of our contracts, ”said Richard Stephenson, who worked for the Blue Cross Blue Shield Association from 2006 to 2017 and now heads a start-up for medical price transparency, Redu Health. (The association says these clauses have become rarer.)

At Memorial Regional Hospital in Florida and M.R.I. Costs …

$ 1,827

with a Cigna plan.

$ 2,148

with a humana plan.

$ 2,455

with a blue cross plan.

$ 262

with a Medicare plan.

Mr. Stephenson oversaw a team that made sure the gag orders were followed. He said he believed insurers were "scared to death" that if the data came out, angry hospitals or doctors could leave their networks.

Warnings but no fines

The Eichelberger family at home. Last summer, Nathan, second from right, was bitten by a stray dog ​​and needed a rabies shot. The family originally received an estimate that the cash payment would cost about $ 800, but later received a surprising bill for more than $ 2,000.Lindsay D’Addato for the New York Times

Ms. Eichelberger's plan had a deductible of $ 3,500, so she worked hard to find the best price for caring for her son.

But neither the hospitals she called nor her insurance company gave her any answers.

She made her decision based on what little information she could get: a hospital, Layton, that said it would charge her $ 787 if she paid cash. The price of paying with insurance wouldn't be available for another week or two, she was told.

But the cash price wasn't right either: a few weeks after the visit, the hospital sent her an invoice additional $ 2,260.

It turned out that the original estimate left out a drug that her son would need.

It was the most cumbersome and useless process, ”said Ms. Eichelberger, who, after five months of negotiations with the hospital, was able to enforce the waiver of the bill.

Daron Cowley, a health system spokesman for Layton, Intermountain, said Ms. Eichelberger received the additional bill because "a new employee provided incomplete information with an inaccurate price estimate."

The health system declined to comment on prices in its hospitals, saying its contracts with insurers prohibit discussion.

It is not clear how much better the Eichelbergers would do today.

The new pricing data is often published in hard-to-use formats designed for data scientists and professional researchers. Many are larger than the full text of the Encyclopaedia Britannica.

And most hospitals haven't published everything. The federal government's potential fine is minimal at a maximum of $ 109,500 per year. Big hospitals earn ten thousand times that; N.Y.U. Langone, a system of five inpatient hospitals that failed to meet the requirements, had sales of $ 5 billion in 2019, according to tax forms.

By July, the Centers for Medicare and Medicaid Services had sent nearly 170 warnings to non-compliant hospitals but had not yet imposed any fines.

Catherine Howden, a spokeswoman for the agency, said she expected "hospitals will comply with these legal requirements and enforce these rules".

She added that if hospitals fail to publish prices within 90 days of receiving a warning, they "can receive a second warning."

The agency plans to increase the fines for large hospitals to as much as $ 2 million annually over the next year, it announced in July.

The hospital where Mrs. Eichelberger's son was treated has started to publish some information. But it has its prizes spread over 269 websites. To check for rabies, you need to check them all out. It's not there.

Few prices are available in the largest US hospitals

Six months after the new rules went into effect, The Times reached out to top-selling hospitals that had published little or no data on their negotiated rates or cash prices. This is what they had to say:

"We will not give any opinion or comment.

N.Y.U. Langon has not published its negotiated tariffs or cash prices.

"Services that do not have a fixed payer-specific tariff are shown as variable.

Stanford health care did not publish its cash prices. It includes prices for 479 out of more than 300,000 possible combinations of insurance and medical treatment in its database.

"We do not post standard cash rates, which normally do not reflect the treatment price for uninsured patients.

Cedars-Sinai Medical Center, in Los Angeles, has not published its cash awards. The hospital first released a 2.5 GB data file, almost entirely made up of more than a million rows that contained no data. After the Times asked about the large file size, the hospital reduced it to a 1.4MB file.

"We have listed the fixed prices where possible and, where this is not possible, listed them as "variable".

U.C.S.F. Medical center did not publish its cash prices. Of the more than eight million possible combinations of insurance and medical treatment in its data file, U.C.S.F. includes negotiated prices for 346. (U.C. Daviswhich is part of the same system and has also not published its cash prices, sent an identical statement.)

"Penn Medicine is committed to transparency about possible costs.

The University of Pennsylvania Hospital Added cash prices to its price transparency file after the Times asked why this data was missing.

"The resources we provide ensure that our patients know what kind of support is available and what it will ultimately cost – not us.

Montefiore Medical Center, in the Bronx, has not disclosed its negotiated tariffs or cash prices.

"V.U.M.C. offers a toll-free number that consumers can call if they have any questions about fees for services.

Vanderbilt University Medical Center, in Nashville, has not disclosed its negotiated tariffs or cash prices.

"Orlando Health has worked hard over the past several years to provide helpful pricing information to its patients.

Orlando Health has not published its negotiated tariffs or cash prices.

"We are still working on the machine-readable file that contains the tariffs negotiated by the payer. … It's about analyzing a huge number of data points.

Jewish Medical Center on Long Island has not published its negotiated tariffs or cash prices.

The largest hospitals were selected based on gross earnings reported to the Centers for Medicare and Medicaid Services in 2018, the most recent year with full data available.

Do you have a medical bill we should investigate? Share it with us.

The New York Times examines the huge disparities in health prices patients face across the United States. Medical bills help us see the prices that hospitals and insurers often keep secret. If you have a medical bill that caught you by surprise – perhaps because of a high price or an unexpected fee – we'd love to review it.

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