Need medical treatment in the new year and want to lower your out-of-pocket costs before you hit the doctor’s office? There’s a new tool for that, at least for insured patients.
Starting Jan. 1, health insurers and employers that offer health plans must provide online calculators for patients to get detailed estimates of what they will owe — taking into account deductibles and copayments — for a variety of services and drugs.
It’s the latest effort in an ongoing move to make pricing and cost comparisons possible at the start in a business known for its ambiguity.
Insurers must make cost information available for 500 non-urgent services considered “purchased,” meaning patients generally have time to consider their options. The federal requirement stems from Coverage transparency rule finalized in 2020.
So how will it work?
Patients, knowing they need a specific treatment, drug or medical service, first access the cost estimator on a website provided through their insurer or, for some, their employer. They can then search for the care they need with the billing code, which many patients may not have; or with a general description, such as “knee repair”, or “abdominal MRI”. They can also type in the name of the hospital or doctor or the dosage amount of a drug for which they are looking for price information.
Not all drugs or services will be available in the first year the tools are introduced, but 500 item wanted list covers a wide range of medical services, from acne surgery to X-rays.
Once the information is entered, the calculators are supposed to produce real-time estimates of the patient’s out-of-pocket cost.
Starting in 2024, the requirement for insurers expands to include all drugs and services.
These assessment tool requirements come on top of other price information disclosures that went into effect over the past two years, which require hospitals and insurers to post their prices publiclyincluding those negotiated between them, along with the cost for cash or uninsured patients.
However, some hospitals have not fully complied with this 2021 disclosure directive, and insurer data released in July is so voluminous that even researchers are finding it heavy to download and analyze.
Price estimator tools can help fill this gap.
The new calculations are customized, calculating how much of the annual deductible patients still owe and the out-of-pocket limit that applies to their coverage. The amount the insurer would pay if the service were out of network should also be shown. Patients can request that information be submitted on paper if they prefer it online.
Insurers or employers who fail to provide the tool could face fines of at least $100 per day for each affected person, a significant incentive to comply—if applicable.
And there are caveats: Consumers using the tools must be enrolled in the appropriate health plan, and there’s no guarantee that the final cost will be exactly as shown.
That’s because “unforeseen factors during the course of treatment, which may involve additional services or providers, may result in higher cost-sharing responsibilities,” federal regulators wrote in the rule outline.
Insurers will not be held liable for incorrect valuations.
Because cost estimates may differ from the final price, or because the procedure was more complex than originally expected, or was handled by another provider at the last minute, one risk is that “I might get a bill for $4,000 and I “I will be upset because you told me 3000 dollars”, he said Gerard Andersonprofessor of health policy and management and of international health at the Johns Hopkins Bloomberg School of Public Health.
Many insurers have offered versions of cost estimator tools before, but only a small percentage of enrollees use them. studies have shown.
Federal regulators defended the appraiser tool requirement, writing that although many insurers already offer them, the new rule sets specific parameters, which may be more detailed than previous versions.
In the outline of final ruleThe Centers for Medicare & Medicaid Services noted that some previous calculators “on the market only provide broad range estimates or average cost estimates using historical claims data” and did not always include information on how much a patient had accrued toward an annual cap. deductible or out-of-pocket.
The agency says such price disclosure will help people make comparisons and could ultimately help slow rising medical costs.
But this is not a given.
“CMS has a lot of people who believe this will have a significant impact, but they also have a long time frame,” said David Brueggemandirector of commercial health at consulting firm Guidehouse.
In the short term, results may be harder to see.
“Most patients are not moving en masse to use these tools,” he said Dr. Ateev Mehrotraprofessor of health care policy at Harvard Medical School.
There are many reasons, he said, including a small financial incentive if they face the same dollar co-payment whether they go to a very expensive facility or a less expensive one. A better way to get patients to switch to lower-cost providers, he said, is to create price tiers, rewarding patients who seek out the most cost-effective providers with lower co-payments.
Mehrotra is skeptical that cost estimator tools alone will do much to reduce rising medical prices. He’s more hopeful that, over time, requiring hospitals and insurers to post all of their negotiated prices will go further in slowing costs by showing who the most expensive providers are, along with which insurers negotiate the best rates.
However, cost estimator tools can be useful for the growing number of people with high-deductible health plans who pay out-of-pocket for most of their health care before reaching the deductible. During that period, some can save significantly by shopping.
These discounts add “pressure on consumers to shop on price,” said Brueggeman, at Guidehouse. “Whether they’re actually doing that is up for debate.”
KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Along with Policy Analysis and Survey, KHN is one of the three main operational programs in KFF (Kaiser Family Foundation). KFF is a non-profit organization equipped to provide information on health issues to the nation.
