Health Reform 2012: Hello, How Much Will My Care Cost?

“Hello, is this the state medical care price line? My doctor says I need to get a mammogram, and suggested I go to XYZ imaging center. I have ABC insurance. Could you please tell me how much that will cost me? $200? Okay, thanks very much.”

Not exactly how things work now, is it? But as the Massachusetts legislature works toward the next, cost-cutting phase of health reform, both the House and the Senate proposals envision a toll-free number and online information for patients who want a sense in advance of how much their care is about to cost.

I asked Dr. Neel Shah, founder and executive director of the Boston nonprofit Costs of Care, what he thought of the legislative proposals. He was just coming off a night shift for his day job, as a senior resident and soon-to-be chief resident in Obstetrics and Gynecology at Brigham and Women’s Hospital, but he kindly shared some thoughts, reacting in part to chunks of the draft bills that talk about price disclosure (see the bottom of this post.) Our conversation, edited:

Judging by the draft bills released in the last few days by the House and Senate, you’re about to get your wish: Medical costs in Massachusetts are likely to become much more transparent to patients. Is that true?

A; Well, I’m cautiously optimistic. I think it’s important to keep our eye on the overall goal of the legislation, which is to improve the value of the care we’re delivering and help us get more bang for the buck.

There are a lot of different parts of the bills. None of them is a silver bullet solution but they’re all important steps. The cost transparency part of the bill gets us part of the way there.

What do you mean?

First, a disclaimer: I’m not pessimistic about this. But to speak more broadly for a minute: Every year, in our essay contest we get dozens of anecdotes from all over the country that illustrate how difficult it is for patients to find out what their care will cost. It’s really hard on patients, and for physicians it’s not any easier.

I had a patient within the last year who I was worried had an ectopic pregnancy, which is potentially life-threatening, and she wouldn’t come in until we would tell her how much an ultrasound cost. She wasn’t being unreasonable; she had been hit before by a medical bill that was unexpectedly high. It took most of the day to find out an answer. And it was stressful because an ectopic pregnancy isn’t a situation where you want to sit on your hands. It took that long to figure it out because the part of the hospital where people deliver the care is different from the part that does the billing. We’re physically separate.

That's a hard thing to change. In terms of this legislation, it says that within 48 hours, if a patient requests it, you have to give them an estimate of what it will cost them. And in a case where it’s not completely clear what you’ll need, which is actually a more common case, then the bill says the provider has to give an estimate. So there may be a delay, and the information may not always be accurate.

So that doesn't really address the concerns of patients who need to know the price tag?

I think there will be a margin of patients whom it’ll help get a better understanding of what they’ll pay beforehand, if they’re having something elective done, or if it’s not urgent, so you have time.

But then there’s another margin of patients: Say you have chest pain. There’s a lot of things that have to happen between you coming in with chest pain and us figuring out what’s causing it and making you better. In those situations, it’ll be less helpful. In those situations, you need some ability to give people information about the prices but at the moment of care, not 48 hours later.

There are a lot of things that neither the doctor nor the patient are going to know until you start delivering the care. The information is only useful at the right time in the right place. For a lot of the care that gets delivered, it still won’t be available at the right time at the right place.

So that could use more work. What else?

The other piece of it is that price by itself is important to know, but the overall goal is to improve the value of the care. Sometimes things can be expensive but they’re worth it if they make you better enough. One important role of the doctor is to help you figure out what the value of the care is. It’s how much it costs but also how important is this for my health.

The bill doesn’t directly address that but I think it's a step in the right direction in terms of facilitating a cultural shift — one already taking place in medicine and that my organization advocates for — which is that we don’t have the training to integrate value in medical decision-making. We’re not trained to do that. If you start moving toward putting costs in patients’ hands, you’ll probably move to a situation where patients ask doctors about costs, and that’s where we want to go.

So just doing this by itself doesn’t bring us all the way, but it gets us part of the way. The next step is to train caregivers to help patients better understand value and help them make decisions based on it.

If what’s outlined in the bills passes and we can all call an 800 number on check a Website to see what care costs, will that make Massachusetts unique?

Actually, Massachusetts already has a Website that pulls some data from the all-payer claims database. You can look up first-trimester obstetric ultrasounds at three Boston hospitals and compare cost and quality already. Currently more than 30 states have or are pursuing this kind of transparency. We have a lot of investment by government and there’s a booming cottage industry in the private sector to enable these kinds of tools. I think we’re really at an inflection point in history in terms of this kind of thing.

The fine print: I've pulled some sections about prices that look relevant from the House and Senate draft bills released in the past few days. Needless to say, none of this is set in stone, but here are some chunks from the initial iteration:

In the Senate bill:

Section 226. (a) Prior to an admission, procedure or service and upon request by a patient or prospective patient, a health care provider shall, within 2 working days, disclose the allowed amount or charge of the admission, procedure or service, including the amount for any facility fees required; provided, however, that if a health care provider is unable to quote a specific amount in advance due to the health care provider’s inability to predict the specific treatment or diagnostic code, the health care provider shall disclose the estimated maximum allowed amount or charge for a proposed admission, procedure or service, including the amount for any facility fees required.
2015 (b) If a patient or prospective patient is covered by a health plan, a health care provider who participates as a network provider shall, upon request of a patient or prospective patient, provide notice of , based on the information available to the provider at the time of the request, sufficient information regarding the proposed admission, procedure or service for the patient or prospective patient to use and the applicable toll-free telephone number and website of the health plan established to disclose co-insurance, copayment and deductibles, under clause (3) of
2021 subsection (a) of section 6 of chapter 1760. A health care provider may assist a patient or prospective patient in using the health plan’s toll-free number and website.
2023 (c) The commissioner shall, in consultation with the board of registration in medicine, promulgate regulations to enforce this section. The commissioner may impose a fine of up to $1000 for each violation of this section. A health care provider aggrieved by the issuance of a fine under this section may, within 21 days of receiving notification of the commissioner’s decision to impose such fine, request an adjudicatory hearing under chapter 30A.

In the House bill:

SECTION 6. Chapter 32A of the General Laws, as so appearing, is hereby amended by inserting after section 26 the following 3 sections:-

Section 27. Pursuant to section 50 of chapter 118G, the commission shall provide a toll-free number and website that enables consumers to request and obtain from the commission in real time the maximum estimated amount the insured will be responsible to pay for a proposed admission, procedure or service that is a medically necessary covered benefit, based on the information available to the carrier at the time the request is made, including any copayment, deductible, coinsurance or other out of pocket amount and the actual or maximum estimated allowed amount, for any health care benefits.

As used in this section, “allowed amount” shall mean the contractually agreed upon amount paid by a carrier to a health care provider for health care services provided to an insured.

SECTION 7. Chapter 32B of the General Laws, as so appearing, is hereby amended by inserting after section 20 the following 3 sections:-

Section 21. Pursuant to section 50 of 118G, every appropriate public authority which has accepted this chapter shall provide a toll-free number and website that enables consumers to request and obtain from the public authority in real time the maximum estimated amount the insured will be responsible to pay for a proposed admission, procedure or service that is a medically necessary covered benefit, based on the information available to the carrier at the time the request is made, including any copayment, deductible, coinsurance or other out of pocket amount for any health care benefits.

SECTION 19. Section 217 of said chapter 111, as so appearing, is hereby repealed

SECTION 20. Said chapter 111, as so appearing, is hereby amended by inserting after section 224 the following 2 sections:—

Section 225. (a) Upon request by a patient or prospective patient, a health care provider shall disclose the charges, and if available, the allowed amount, or where it is not possible to quote a specific amount in advance due to the health care provider’s inability to predict the specific treatment or diagnostic code, the estimated charges or estimated allowed amount for a proposed admission, procedure or service.

(b) A health care provider referring a patient to another provider that is part of or represented by the same provider organization as defined in section 53H shall disclose (i) that the providers are part of or represented by the same provider organization, and upon the request by the patient, (ii) the charges, and if available, the allowed amount, or where it is not possible to quote a specific amount in advance due to the health care provider’s inability to predict the specific treatment or diagnostic code, the estimated charges or estimated allowed amount for a proposed admission, procedure or service.

As used in this section, “allowed amount”, shall mean the contractually agreed upon amount paid by a carrier to a health care provider for health care services provided to an insured.

Section 50. (a) To facilitate the sharing of health care data between payers, providers, employers, and consumers, the division shall:—

(i) Establish procedures for payers to report to members their out-of-pocket costs, including, but not limited to, requiring payers to provide a toll-free number and website that enables consumers to request and obtain from a payer in real time the maximum estimated amount the insured will be responsible to pay for a proposed admission, procedure or service that is a medically necessary covered benefit, based on the information available to the carrier at the time the request is made, including any copayment, deductible, coinsurance or other out of pocket amount, for any health care benefits;

(ii) Establish procedures for the authority to disclose to providers, on a timely basis, the contracted prices of individual health care services so as to aid in patient referrals and the management of alternative payment methodologies. Contracted prices shall be listed by provider and payer;

(iii) Establish procedures for payers to disclose patient-level data including, but not limited to, health care service utilization, medical expenses, demographics, and where services are being provided, to all providers in their network, provided that data shall be limited to patients treated by that provider, so as to aid providers in managing the care of their own patient panel;

(iv) Establish procedures for third-party administrators to disclose to self-insured group clients the prices and quality of services of in-network providers; and

(v) Establish procedures for health care providers, upon the request of a patient or prospective patient, to disclose the charges, and if available, the allowed amount, or where it is not possible to quote a specific amount in advance due to the health care provider’s inability to predict the specific treatment or diagnostic code, the estimated charges or estimated allowed amount for a proposed admission, procedure or service.

(b) The division shall ensure that all data collection, analysis, and other submission requirements established under this section are implemented in a manner that promotes administrative simplification and avoids duplication.