How well will new rules on health care cost transparency work?

This is an illustration of a woman struggling to figure out what health care will cost.

Alvin Chang / The CT Mirror

Many patients now have insurance plans that require them to pay a larger share of their medical bills. But finding out what their care will cost remains difficult. Will changes in state law taking effect this year change that?

Lisa Freeman recently tried an experiment: Before having a medical diagnostic test, she tried to figure out what it would cost.

“It took no less than five phone calls, and I still never got to the end of the thing,” said Freeman, executive director of the Connecticut Center for Patient Safety.

A major state law passed last year aims to change that, with a host of transparency provisions that begin rolling out this month. They’re aimed at making it easier for patients to learn the cost of their medical care ahead of time, including any charges they might face if they seek care outside their insurer's network.

So how will it work in practice? A study on a similar law in Massachusetts wasn’t encouraging, according to its authors. They found that a year after transparency provisions took effect, it still took an average of two to four business days and numerous phone calls to learn the price of an MRI.

Hospital officials in Connecticut say they’re working to ensure they comply with the new law, but say meeting some of its requirements is more complicated than it might sound.

This is a picture of Dr. Rocco Orlando

Arielle Levin Becker / CTMirror.org

Dr. Rocco Orlando

“We’re certainly committed to transparency. We don’t want folks to be surprised,” said Dr. Rocco Orlando, chief medical officer at Hartford HealthCare, which includes five hospitals. “Where we struggle is the complexity of the actual implementation.”

A top official with the state’s medical society, meanwhile, warned that for the first six months, there could be problems with the accuracy of information physicians provide because they won’t necessarily know the details of a patient’s insurance network until insurers meet new information requirements that begin in July.

“It’s going to be imperfect at first,” said Matthew Katz, executive vice president and CEO of the Connecticut State Medical Society.

And legislators already have received requests to revisit the law.

Related: As patients pay more of their medical bills, many unclear on the costs

Freeman says having information about care cost and options is key for patients to become more involved in their care. She's waiting to see how the provisions are implemented, but even if it’s not perfect, she said, the measure puts the state on the right path.

“You have to start somewhere,” she said.

What changes when

The changes are part of a larger health care law that drew significant controversy, particularly over new requirements on changes in hospital ownership. The transparency provisions themselves prompted little opposition; those who weighed in praised their aim, although some questioned which groups were best situated to provide the information and how to ensure it was useful to patients, rather than simply more paperwork they would probably ignore.

Related: In controversial health care bills, some agreement on transparency

The first big transparency provisions in took effect Jan. 1:

  • Health care providers must determine if patients who schedule nonemergency care are uninsured or if the provider is outside the patient’s insurance network. If so, the provider must tell the patient in writing how much will be charged. For patients whose insurer doesn’t include the provider in its network, the notice must indicate that the care will probably be subject to out-of-network rates.
  • If a patient is charged a facility fee – additional fees that hospital-owned facilities can charge, which sometimes amount to thousands of dollars – the bill must “clearly identify” the fee and tell the patient that they might have paid less had they gone to a facility not owned by the hospital. It must also mention the patient’s right to request a fee reduction and, for comparison, the facility fee Medicare would pay.
  • If a hospital acquires a medical office or practice that is likely to charge facility fees, it must notify patients that, among other things, they could face higher costs.

Related: As hospitals buy medical practices, patients face thousands of dollars in facility fees

Other major provisions take effect over the next 12 months:

  • Starting July 1, insurers must maintain websites and toll-free phone numbers consumers can use to find out the cost of care; estimates of their out-of-pocket costs; quality and patient satisfaction measures for health care providers; a list of in-network providers and information on, among other things, whether they’re taking new patients.
  • Beginning Jan. 1, 2017, hospitals must notify patients who are scheduling certain nonemergency care that they can request cost and quality information, and the hospitals must provide it in writing to those who request it.

The law also requires the state’s health insurance exchange, Access Health CT, to run a website for consumers to find information on the quality and cost of health care services.

How prepared are health care providers?

Those in the health care system say they support the goals, but said meeting some of the transparency requirements isn't simple.

This is a picture of Matthew Katz

Arielle Levin Becker / CTMirror.org

Matthew Katz

One challenge they cited: Hospitals and physicians’ offices don’t have all the information needed to comply with the law, since patients’ costs depend on both their insurance plan and how much of their deductible – if they have one – they’ve already fulfilled.

As doctors’ offices try to determine if they’re in a patient’s insurance network, patients can expect more questions when scheduling appointments, including being asked to scan their insurance cards if possible, Katz said.

Insurers have multiple networks – some cover fewer physicians in the plans they sell on the exchange, for example – and in some cases, patients’ out-of-pocket costs vary depending on how the insurer categorizes the provider. That makes it harder for doctors to determine if a patient would be out-of-network, Katz said. And if a patient is planning a hospital admission or outpatient surgery, the physician is unlikely to know what those facilities charge.

“I think we’re going to have inaccurate information, at least at first and for the first six months, because there is no conceivable way a physician will know much of what they’re being asked to provide to the patient,” Katz said. But he added that some problems will probably be resolved once insurers begin reporting information in July, and when hospitals begin providing price estimates in 2017.

Another challenge, hospital officials said, is how to provide information that’s useful to patients and doesn’t create more confusion.

This is a picture of A portion of a St. Francis billing statement with an explanation of facility fees.

St. Francis Hospital and Medical Center

A portion of a St. Francis billing statement with an explanation of facility fees.

Nicole Schulz, vice president for revenue cycle at St. Francis Hospital and Medical Center in Hartford, pointed to the hospital’s experience after providing notices about facility fees as part of an earlier law.

“As thoughtful as we tried to be in crafting that message, it still created a significant amount of confusion among our patient population,” Schulz said. So the hospital is training staff to address questions about the new language on bills.

St. Francis and the Hartford HealthCare hospitals – Hartford, Backus, Windham, The Hospital of Central Connecticut and MidState Medical Center – plan to include the language about facility fees on all bills, not just those that include the fees. Hartford HealthCare officials are expecting an influx of calls once those bills go out, and they have created a script for customer service representatives to help patients who call.

Schulz said providing individualized information for patients is more challenging than more general information. It requires a lot of time, systems build-out and staff training, she said, and it wasn't possible to do all that before the first provisions took effect.

St. Francis has also made other adjustments, such as having staff who schedule medical procedures also obtain insurance information. The schedulers historically focused on clinical issues while another team handled insurance information.

How well will it work?

Last year, a Massachusetts group, the Pioneer Institute, tested a Massachusetts law requiring health care providers and insurers to tell consumers the price of medical services and procedures in advance. The institute called 22 hospitals and 10 clinics, seeking the cost of an MRI.

The results: With “much persistence and diligence,” the authors managed to get price information from all but one facility. But not easily.

“Operators seem flummoxed when asked for price information and do their best to guess the department to which such calls should be transferred. We were transferred anywhere from three to as many as six or seven times before finding the one person in an organization who could give us a price for an MRI. In most cases we then had to leave a voicemail message, which inevitably began a round of phone tag until the price information was finally obtained,” authors Barbara Anthony and Scott Haller wrote.

They recommended that hospitals develop protocols for handling price requests and focus on price transparency as a customer service matter.

Related: How to (try to) find out what your medical care will cost

When Connecticut’s version of that provision rolls out in 2017, will things be any better? Will hospitals have a central phone number to call or other ways to accommodate patients?

Hartford HealthCare has a tool that staff can use to provide cost estimates to patients, based on historical data and insurance plans, and Cindy Pugliese, the system’s vice president for revenue cycle, is looking into whether it will satisfy the law’s requirements. Staff currently get fewer than 10 requests for it a month, she said.

Schulz said St. Francis hasn’t yet determined how it will work. “We really need to look at reallocating staff,” she said, adding that adding expenses to meet the new requirements isn’t an option.

Efforts to change the law

Representatives for several other hospitals referred questions to the Connecticut Hospital Association. James Iacobellis, the association’s senior vice president for government and regulatory affairs, said the organization has been working with hospitals on meeting the law’s requirements, as well as identifying concerns to try to address with legislators.

“Most of them are clarifying issues,” Iacobellis said.

This is a picture of Rep. Matt Ritter

Rep. Matt Ritter

For example, the law requires certain billing statements to include Medicare payment rates for comparable services, but Iacobellis said it isn’t clear what happens if there isn’t a comparable Medicare service code.

In addition, Iacobellis wondered if there’s a way for hospitals to provide the required information online or by phone, something the law doesn’t currently address.

Rep. Matt Ritter, D-Hartford, who co-chairs the Public Health Committee, said he’s already received requests from many groups to revisit portions of the law, including some centered on questions about whether meeting certain effective dates would be realistic.

“We’ll be flexible, I think, and listen to people and try to be reasonable,” he said. “We’re certainly not going to undo or unwind a lot of the good reforms that we passed.”

But, he added, one person’s definition of a technical change might be viewed by someone else as altering the intent of a law.

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