Catalyst for Payment Reform Sees Slow Progress on State Price Transparency

Predictive AnalyticsBy Sarianne Gruber
Twitter: @subtleimpact

The Catalyst for Payment Reform (CPR)-Health Care Incentives Improvement Institute (HCl3) released last month a 50 state report card documenting the minimal progress on State Price Transparency Laws in 2014. Currently, state laws allow hospitals and other providers to keep costs hidden until the patient gets the bill. Without full cost transparency of medical procedures, patients have no clue what their out-of-pocket cost will be until care is delivered.   CPR’s mission is for all states to enact price transparency laws, and  make available provider-specific information on the price for a specific health care services to consumer.

CPR: The Need for Unbiased Interpretation
CPR is an independent, national nonprofit organization for employees and other purchasers committed to a higher value health care system.  For the lay audience, understanding the current statutes is a challenge. CPR wants to educate the public and media, and help them understand what legal arguments are valid from providers, payers and suppliers, who benefit from elusive price laws.  Understanding “what legal arguments are valid and raise question on those that are spurious” is critical and without this type of analysis, a tough barrier exists for introducing new bills for transparency.   At the helm of CPR is Suzanne Delbanco, Ph.D., the executive director of payment consortium, and her staff members are Andrea Caballero, Program Director and Roslyn Murray, Project & Research Assistant. CPR’s  members are employers and other healthcare purchasers, from large private employers to stat Medicaid, employee and retiree agencies. More information is available on CPR’s website.

Report Card: Bleak Picture for New Grades
Since last year’s report, grades showed few changes with 90% of states failing to provide adequate price information to consumers.  CPR assesses each state on passing legislative and regulatory activity for unlocking medical cost data to the consumer. The 2014 Report card listed 45 states receiving a failing grade of “F”. Only one state, New Hampshire, had an “A”. Colorado and Maine each received a “B”, and Vermont and Virginia each finished with a “C”.  New Hampshire bounced back to a high score with a “consumer-friendly website on health care prices”.  However, Massachusetts received a failing grade due to the MyHealthCareOptions website closing down. The scorecard assigns points based on the quality and scope of disclosing price data to the consumer, as well as, how well the information is disseminated to the public, i.e., a public website.  The grades also take into account the prices that hospitals claim they charge and what the patient actually pays, which are mutually exclusive events. States that require full disclosure of actual prices receive higher scores.  To learn more on the grade changes in check out the 2015 Report Card.

Advocacy for Public Prices Lists
Across the country, states give hospitals carte blanche to set prices for health and medical services, and insurers negotiate discounts from these listed charges.  For the consumer, this means the insurers pay prices significantly lower than what the patient bill states.   The rationale being that price is a trade secret, which protected under the law.  CPR has initiated collaboration with the University of California San Francisco and University of California Hastings Consortium on Law, Science & Health Policy for legal analysis. Moving forward in their fight for price transparency, CPR wants to understand what arguments are legitimate others that are false.  For example, the claim that price transparency leads to higher prices and breaks laws is fictitious. CPR hopes this knowledge will help states address barriers through legislation and litigation. The goal is to have “patient-focused price transparency legislation to ensure that all patients have real-time access to a good faith estimate of the expected costs of the procedure to the patient based on his or her health care needs, insurance plan and choice of health care providers”.  An analysis of legal arguments against price transparency is present in Appendix 1 of the Report Card.