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Hospitals may be required to show service charges

Mar 15, 2016

A bill in Lansing could make all Michigan hospitals publicly show their specific charges for services, as part of a push for greater transparency in health care.  

The bill, sponsored by  Sen. Joe Hune, R-Hamburg, would require hospitals using a "charge description master," or "chargemaster," to make their list publicly available, allowing patients to see the charge before receiving treatment. 

Hune introduced the bill last year and the Health Policy Committee heard testimony Tuesday. Senator Hune was not available for an interview. 

Representatives from the Michigan Health and Hospital Association (MHA) said they are in favor of greater transparency for patients, and do not oppose posting the information. However, the MHA is not sure the chargemaster serves the public very well.

David Finkbeiner, MHA Senior Vice President for Advocacy, said chargemasters show what the hospital charges, but that does not necessarily say anything about what the patient pays out of pocket. Since different patients have different insurance plans, it's unlikely what the hospital charges corresponds with what a person ends up paying.

"If this is what the Legislature chooses to enact, we are not opposing this bill," he said. "The question is: If the goal is to help patients better understand the cost of their health care, we're not convinced that this is the mechanism that's going to do that."

MHA already has a database on its website where people can search hospitals and procedures to compare prices. Tables list the name of the procedure, the charge of the procedure, as well as the payment received. 

Finkbeiner said it's important to distinguish between the payments the hospital receives and what the hospital charges. 

"For insured patients, much of (the out-of-hospital expense) is determined by the insurance company and their benefit separate from what's ultimately on a chargemaster," he said. 

Others agree with Finkbeiner. Marianne Udow-Phillips, director of the Center for Healthcare Research and Transformation, said chargemasters usually only provide useful information to those without insurance. But in Michigan, she said, where 92% of residents now have health insurance, the data wouldn't be helpful for most people. 

"Is the price that the hospital charges relevant to you as a consumer? Probably not," she said.

Ideally, more-specific pricing data should come from health plan providers, Udow-Phillips said. Finkbeiner also said a tailored approach for consumers would be the best approach.

Udow-Phillips added that to her knowledge, there are no federal laws that require hospitals to show their charges. However, many other state legislatures have taken up the issue in recent years, and she said about half have passed some type of price transparency legislation.

Udow-Phillips noted that a Time Magazine cover article from 2013, which outlined the dramatically high, seemingly unfair hospital bills many patients received, spurred lawmakers across the country to evaluate healthcare transparency laws.

Some hospitals in Michigan already provide service-fee details online. For example, Oakwood Healthcare, now part of Beaumont Health, has a section of their site outlining service pricing for patients to see. The University of Michigan Health System similarly has a "Price Transparency" page

Chargemasters aside, increased transparency is something most everyone can support, Finkbeiner said. 

"This is an effort in the direction of transparency, which we are fully supportive of," Finkbeiner said. "Not sure that using chargemasters and posting thousands of procedures on a website is going to help John Q. Citizen in figuring out whether or not to have a health care procedure."