This piece was co-written with Cynthia Fisher.
[Editor’s note: This opinion piece was originally published at Forbes.com and is reprinted with permission]
Jason Dean of Tennessee needed stitches on his knee after a minor accident last year. He went to a local hospital, where he was told that insurance would cover the procedure. Weeks later, he received a $ 6,500 bill, of which only about half was covered by his insurer.
Jason thought the bill was a joke, but in the non-transparent American health care system, where prices are hidden until consumers receive care, the joke is for him. Adding insult to his injury: Emergency clinics provide the same care for approximately $ 275 without insurance.
New federal health care price transparency rules allow patients like Jason to avoid this common nightmare of overpaying. The Hospital Price Transparency Order, which entered into force on 1 January 2021, requires hospitals to publish their actual prices, including their cash rebates and agreed-upon insurance plan prices. And on July 1, the rule on transparency in health insurance prices comes into force, which requires insurers to disclose their historical claims data and agreed prices so that patients have access to upfront prices wherever they receive care. Armed with these real, upfront prices, consumers like Jason can prevent the hospital from being overcharged by choosing and easily seek redress and protection in the event of overcharging.
Unfortunately, North Carolina law has a clause to block public health plans that keeps agreed prices and historical data on claims confidential. In order to comply with federal law and enable government officials and free up price transparency for all North Carolina consumers, that law must be repealed or revised immediately.
Hospitals and state health insurers have long taken advantage of this clause to take advantage of keeping patients in the dark for prices. In 2018, the UNC nonprofit health system responded to a request for public records of the actual rates it charges on the North Carolina U.S. Health Plan, with a heavily edited document and deleted prices. Even more interesting is that UNC Health employees are members of the North Carolina State Health Plan.
Federal law is “supreme” under the US Constitution and precedes state law. If the non-transparent North Carolina price rules are challenged in court, federal law will replace it. Consumers have fought hard for these rules, including winning industry-backed challenges to the federal district hospital rule and appellate courts in 2020.
Yet competing state and federal laws threaten to delay the publication of these actual prices for consumers who need them now to protect their financial and personal health. Insurers in North Carolina will use U.S. law as an excuse to continue to hide their real prices from government officials and taxpayers who fund their care.
Consumers are impatient and need access to real prices now. Last week, the Kaiser’s Family Foundation published a new analysis showing that the shocking 100 million Americans have medical debts. According to the Urban Institute, nearly one in five North Carolina residents has medical duties in their collections. Another report released last week by the Bureau of Financial Protection for Consumers found that military members regularly had failed loans due to hospital code updates and fraudulent billing. Employers who provide health care to most Americans have had to cut employees’ wages due to unexpected coverage costs at the worst possible time as inflation rises.
On Wednesday, North Carolina lawmakers will vote on a bill to bring state law in line with federal law. However, large hospital systems are secretly trying to kill this bill for consumers.
Lawmakers can ensure that North Carolina consumers enjoy all the benefits of transparency in federal price transparency rules by simply repealing state law that requires secret prices. A recent PatientRightsAdvocate.org study found that only 14.3% of hospitals nationwide – and only 19% in North Carolina – adhere to the hospital price transparency rule.
When all actual prices of care and coverage are known in advance, a functional market for consumer healthcare will emerge. Patients and employers will be able to shop for the best care and coverage at the best prices, freeing up competition that reverses unfavorable costs and fights healthcare inflation.
Josh Arshambo is the founder of Presidents Lane Consulting and a senior fellow at the Cicero and Pioneer Institutes. Cynthia Fisher is the founder and chairman of PatientRightsAdvocate.org and founder and former CEO of ViaCord.