In the ongoing move towards a patient-driven healthcare system in the USA, the Centres for Medicare & Medicaid Services (CMS) is proposing significant new price transparency rules for US hospitals in 2020. It may make it easier for international patients to compare US prices, but it’s not fully comprehensive. Ian Youngman looks at the proposals and what it might mean for medical tourism.
CMS is the US government agency within the Department of Health and Human Services (HHS) that administers the nation’s major health care programmes, including Medicare, Medicaid, the Children's Health Insurance Program (CHIP), and the state and federal health insurance marketplaces. CMS collects and analyses data, produces research reports, and works to eliminate instances of fraud and abuse within the health care system.
CMS has published a strategy on price transparency for US patients, which covers the following principles:
So far, the CMS has achieved the following related to their strategy:
CMS has already introduced hospital price transparency rules for patients paying the bills. Hospitals must present prices for the thousands of individual services and products for which a hospital may bill, covering everything from the price for a bed per day, blood tests and surgical operating room time (billed in 15-minute intervals), to the cost of a single Tylenol tablet. The hospital selects the majority of the services for which it will post prices, but must also include 70 services chosen by CMS.
In most cases however the posted rates are the highest a hospital would ever charge per service and are rarely the actual prices finally paid because insurers and the government generally negotiate significantly lower prices.
The other historic problem is that services and products are identified in obscure abbreviations, billing codes and medical terminology that doctors or nurses sometimes don’t understand. This is why the new CMS rules are seeking to make hospitals set out prices in a simple understandable way that can be compared.
US hospitals are slowly changing, but at present CMS cannot enforce the rules. A few hospitals show package prices and full lists, but others publish only those details they must show, which is often hidden away on their websites.
A few US states do require hospitals to give consumers price estimates, but the laws are limited in scope and inconsistent across states. Colorado, for example, mandates that hospitals post self-pay prices for the 50 conditions that yield the most revenue from Medicare. Doctors must also post prices for their 15 most popular procedures. In California, law requires hospitals to disclose prices for the top 26 outpatient services by revenue.
The latest CMS action seeks to empower patients with price transparency, increase competition among hospitals, lower costs for Medicare beneficiaries and allow patients to shop for health care that meets their needs and budgets. The rules are intended to give customers the ability to compare out-of-pocket costs across different settings of care and be a first step towards ending surprise-billing practices.
Hospitals will have to show the negotiated prices they’ve agreed with insurers, as well as the book prices for self-paying customers. This follows President Trump’s Executive Order on price and quality transparency that lays the foundation for a patient-driven healthcare system.
Forcing hospitals to disclose negotiated rates between payers and providers is a landmark change for America's healthcare system and comes at a time when patients are paying a bigger share of their healthcare costs, thanks to high deductibles that can sometimes reach into the tens of thousands of dollars for families.
The proposals for 2020 include significant changes that would require hospitals to take the following actions:
CMS considers a hospital to be any facility that is licensed in a state as a hospital that receives Medicare patients. To ensure that hospitals comply with the requirements there will be new enforcement tools, including monitoring, auditing, corrective action plans, and civil monetary penalties of US$300 per day.
CMS is also seeking feedback on the best way to capture information on the quality of hospital inpatient care so that information can be provided to patients in a way that is useful for them when comparing care options.
For customers in the USA seeking treatment in their own or another state, this will show the true costs of treatment.
It may also make it easier for overseas customers to compare US prices. However, it will not include all the extra non-surgical costs that a patient or their insurer will pay.
It should also highlight organisations, overseas hospitals and medical travel agents who quote unrealistic US prices just to get a favourable cost comparison.
US healthcare price and service comparison sites, many of whom are changing from just offering information to arranging hospital appointments, will have a huge amount of extra price information to call on.
Real pricing comparison is far from complete, but the steps in the USA plus those in the UK and a handful of other countries to make hospitals and clinics openly show prices online, are a sea change in medical tourism.
Where patients travel from overseas to the USA or UK, domestic providers of healthcare services can react by altering their prices to compete for custom.
To expect a rise in inbound medical tourism, due to more competitive and comparative healthcare pricing, is however too simplistic. Medical tourism is increasingly about availability of service, quality of service and access to the many other customer offerings relating to medical travel rather than price alone.
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