Officials: Pricing move a first step

January 11, 2019 GMT

The head of the Centers for Medicare and Medicaid Services said Thursday that a new federal rule requiring hospitals to post patient prices online is “a first step” toward increasing transparency in health care costs.

“From where we stand, this is about empowering patients, right? We want to make sure that the information is out there,” CMS Administrator Seema Verma said in a conference call with news reporters.

“The idea here is just to make the information available to individuals and let them make the decisions that work best for them,” Verma said.

But a local medical ethicist criticized the rule for not making hospitals tell how much of the cost of a medical procedure or product would be covered by insurance companies and how much would be paid by patients.


“It has the trappings of transparency, but it’s ultimately either meaningless or harmful,” Abe Schwab, a philosophy professor at Purdue University Fort Wayne, said in a telephone interview.

Schwab said raw price data could cause “sticker shock” among prospective patients and cause them to delay needed medical treatment.

The CMS rule, which took effect Jan. 1, requires hospitals to publish standard prices online in a machine-readable format. But the rule carries no enforcement mechanism, such as a noncompliance penalty, and it provides for neither a standard website price-listing format nor information about insurance coverage.

“I think we’re committed to advancing price transparency. We recognize that this a first step and that there’s more work to be done on this issue,” Verma told reporters.

“We understand that it’s more complex than just putting out the information,” she said.

Verma, formerly a health policy consultant in Indianapolis, repeatedly said, “There’s nothing that prevents a hospital from going further than this.” She mentioned University of Utah Health, University of Colorado Health and the Mayo Clinic as going “beyond what is required” by the CMS rule.

Schwab stressed the need for insurance coverage information for all hospitals.

“Even if the hospital lists their price in a way that a patient can find the information in advance, it doesn’t tell the patient what their financial responsibility will be because of the fact that every insurance company negotiates differently with the hospital regarding what the patient will be responsible for and what the insurance company will be responsible for,” Schwab said.

“As a consumer, the (existing) information is ultimately meaningless and in fact may degrade my decision-making because I think I’m making an informed decision when in fact I lack the information that would be necessary to make a good consumer choice,” he said.

Schwab said the hospital pricing rule is “emblematic of a broader cultural movement : that the idea of transparency is just to make reams of information available that no lay consumer could make their way through.”