Economist Uwe Reinhardt has an apt description of how the complete lack of information around health insurance prices feels to consumers:
“Imagine a department store whose customers are blindfolded before entering. A shopper might enter the store seeking to buy an affordable dress shirt and a tie, but exit it with a pair of boxer shorts and a scarf. Sometime later, he would receive an invoice, whose details would be incomprehensible to him, save for one item: a dollar amount in a framed box with the words: “Pay this amount.”
Massachusetts is beginning to move away from this opaque-world and enter into transparencyland.
A week ago, the Division of Insurance (DOI) issued a bulletin regarding the consume price transparency provisions that apply to health insurers as part of Chapter 224, the 2012 cost control and delivery reform law.
The law states that Massachusetts health insurers must provide a toll-free number and website that enables consumers to obtain within 2 days the estimated or maximum allowed charged for a proposed admission, procedure or service, and the estimated amount the patient will be responsible to pay. Insurers will have to provide these estimates in real time by October 1st, 2014. Insurance carriers now have to tell you how much your health care costs, before you receive it. Through this bulletin, the DOI has provided more guidance on what insurers must do to comply with this law.
The bulletin states that the DOI expects the following:
- All systems must be consumer friendly.
- Insurers must provide the anticipated charge and a consumer’s anticipate out-of-pocket costs for an admission, procedure or service based on general information available to the insurer at the time the consumer makes the request. The DOI recognizes that in some cases a insurer may not be able to obtain all the information necessary to provide a cost estimate to a consumer in one conversation and states that the “2 day” timeline will begin when the insurer has all the necessary information.
- Although insurers can request more information from consumers, insurers do not need perfect information to provide a cost estimate, including and especially diagnostic or procedural codes. Consumers should not be required to provide the insurer with a “CPT code” to get a cost estimate.
- If a CPT or diagnostic code is necessary to obtain a cost estimate, the insurer, with the consumer’s permission, should be responsible for obtaining it from the consumer’s health care provider.
- Consumers should provide insurer with as much information as possible and insurers should request information that is minimally burdensome for the consumer to acquire.
- The cost estimate can be provided via conversation, email or writing.
- The insurer must provide the consumer with the anticipated total cost and the consumer’s out-of-pocket cost based on the available information at the time the request is made.
- If the consumer wishes to do some comparison shopping and requests the cost estimate for more than one provider, the insurer must provide it in a clearer and easily comparable manner.
- Insurer transparency tools must provide information for those who are visually impaired or otherwise unable to access information being provided by a insurer through its website or by telephone, or do not speak English as a first language.
We welcome this bulletin and congratulate the Division of Insurance and the Office of Consumer Affairs & Business Regulation for issuing the guidelines.
As deductibles become more entrenched in our insurance design, consumers need a way to know the cost of the health care services they receive. Insurers must create transparency tools that are user friendly, clear, accessible and most importantly do not require consumers to have complex CPT or other codes on hand.