BILL PUSHES CLEARER HOSPITAL COSTS YET EXPERTS SAY IT MAY NOT WORK AS INTENDED HEALTH

Wisconsin lawmakers are pushing to double down on requirements that hospitals publicly share the cost of a hip replacement or biopsy so consumers can price shop and negotiate a better deal.

A new bill largely mirrors federal regulations but proponents of enacting state-level requirements say federal oversight is spotty and consumers need more help.

"Armed with this information, both employers and employees will be able to make informed decisions and when the value proposition is right, save their hard earned money," said Sen. Julian Bradley, R-Franklin, one of the legislators who introduced the bill.

Hospitals say the move is unnecessary. And experts argue these rules have not necessarily had the intended effect at the federal level, producing information that can be inconsistent from hospital to hospital and also is often difficult for patients to decipher.

Starting in 2021, hospitals and insurers had to comply with Centers for Medicare & Medicaid Services regulations that required them to post more data about how much procedures and services cost. The rules were launched under former President Donald Trump's administration.

Since those policies went into effect, however, there has been a debate over whether hospitals are complying.

A CMS review found that 70% of hospitals are meeting all of the requirements. This contrasts with a January study by a pair of University of Maryland, Baltimore County researchers who found that only 35% of hospitals were up to snuff.

Meanwhile, an analysis conducted by the pro-transparency group Patients Rights Advocates pegged the compliance rate at around 25%.

Federal regulators have fined only 14 hospitals nationally for violating the regulations, though CMS has issued warning letters to more hospitals and pledged earlier this year to start cracking down more aggressively.

None of the violators have been in Wisconsin. Still, state lawmakers have pointed to the compliance rates as reason to enact a state law with its own transparency requirements.

"The federal government cannot be trusted to handle something like this effectively," Sen. Mary Felzkowski, R-Irma, told the Senate Health Committee Oct. 4. "CMS' enforcement actions have been inconsistent, lackadaisical and sporadic."

Under the proposal, introduced by Felzkowski, Bradley and Reps. Rob Brooks, R-Saukville, and Donna Rozar, R-Marshfield, hospitals would be required to post online two lists for consumers and data analysts to access. A pair of Democrats, Sen. Chris Larson, D-Milwaukee, and Rep. Katrina Shankland, D-Stevens Point, also signed on as co-authors.

One document must include all charges for hospital services, procedures and drugs, including the rates negotiated with different insurers and the cash price available to consumers.

The second would require the hospital to provide charges for around 300 "shoppable services," or common services like mammograms or lab tests that can be scheduled in advance.

These requirements largely mirror those laid out by the federal government, though it would give the state Department of Health Services the power to monitor compliance and fine offenders.

The Wisconsin Hospital Association argues its members are largely in compliance with the federal regulations, pointing to data from Turquoise Health, a firm that aggregates price information from hospitals. Turquoise Health gives the state's hospitals high marks for transparency.

And compliance has been difficult and costly for hospitals, WHA President and CEO Eric Borgerding told lawmakers, adding that insurance companies are often the best places to get price information.

"The law is the law and we are complying with it," Borgerding said.

Data is not always straightforward

Each of Madison's three major hospitals post documents that appear to comply with federal regulations.

The charge of a cesarean delivery at each of the three hospitals varies from $2,020.50, for a patient with Anthem Blue Priority at UW Health, to $14,930.42 for a Dean Health Plan patient at St. Mary's Hospital.

But experts say this data has limitations that can make it less consumer-friendly. That isn't necessarily because a health care facility is being purposefully misleading but rather because of the byzantine nature of how health care prices are set and organized.

These challenges are not unique to Wisconsin hospitals, experts say, but rather serve as a roadblock to accessing price information nationally.

Gary Claxton, a senior vice president for the Kaiser Family Foundation, recalled a hospital in Dallas where the range of possible prices stretched from $5 to $50,000 - data that was unlikely to be helpful to a patient.

"It's not clear that what's being produced is actually very useful," Claxton said. "And whether you should actually believe prices, even if they look sort of the same, are they really measuring the same thing?"

Hospitals code services for billing purposes, assigning them a five digit number that is generally standardized across health care facilities - but not always.

Take the example of a C-section. Both UW Health and St. Mary's use the same code for the procedure. But Meriter Hospital instead has several different entries for a C-section, depending on the level of severity and whether there is postpartum sterilization involved.

A certain code can also sometimes be modified, depending on a person's age or the severity of their condition, Claxton said. And services can be bundled in a way that is also not standardized across facilities.

Even accessing this information can be a challenge in the first place. Some hospitals, like UW Health, post its more complete list of services in an Excel format.

But the other two Madison hospitals instead compile their information in a JSON file, which is not as easy to access in computer programs for the average person.

These elements were not necessarily accounted for in the CMS rules, Claxton said, and he questioned the wisdom of a state law that would mirror those regulations.

"Hospital payments are complex," he said. "But the way the rules are set out doesn't capture all that complexity. So then it doesn't let you actually make reliable comparisons."

The Wisconsin Hospital Association has created its own database that doesn't require downloading files and allows for a more direct comparison across hospitals.

But price transparency advocates argue there are cases where price estimation tools provided by hospitals don't give patients the full picture.

Ilaria Santangelo, board member for the advocacy group Patients Rights Advocates, pointed to the example of a patient who got stuck with a bill 100 times higher than the price she was initially quoted.

"We need to be on the side of all Wisconsinites who are sick and scared to go to the hospital due to fear of financial ruin, not the side of the hospitals putting these patients into unnecessary medical debt," she said during the public hearing on the bill. "We need to make shopping for health care easier, not billing for health care easier for hospitals."

Transparency rules point to the future of health care

Still, Brian Stephens, CEO of Door County Medical Center in Sturgeon Bay, said the fixation on allowing consumer comparisons misses the point.

Stephens' hospital spends $63,000 per year to remain compliant with the federal regulations and he said he believes the hospital's prices are fair.

Yet an individual who falls and is rushed to the emergency room won't likely have time to search out the best prices, Stephens said. And more regulations at the state level is as likely to drive up costs as help consumers, he said.

"Perhaps hospitals have just become a good punching bag for folks who need an effective sound bite," he told the Senate Health Committee earlier this month. "The reality is that despite our wholehearted commitment to providing reasonable, upfront prices, transparency has its limitations."

Stephen Parente, a professor of health finance at the University of Minnesota who has researched the federal price transparency rules said there has not yet been any extensive efforts to research whether consumers are actually making use of the information provided by hospitals.

Entrepreneurs, such as Turquoise Health, can try and compile this data but its information can be costly to access and use. A state-level law wouldn't necessarily change that, Parente said.

"The federal rule is efficient, it's just that the data has to get better harnessed to get out into the public domain to do something," Parente said.

But patients could be in line to save a lot of money if price transparency can realize its full potential.

Parente's research shows consumers could save between $18.7 billion and $85 billion as a result of the federal regulations. Patients in the upper midwest, including Wisconsin, are among those projected to be the biggest winners, in large part because of changes in the health care market.

People are increasingly choosing health insurance plans with lower monthly payments but which require them to pay more of their health care costs out of pocket before the insurance kicks in.

Consumers are also gravitating toward health savings accounts, where a person can set aside funds pre-tax to pay off health care costs incurred at a later date.

That means any savings from finding less costly care are more likely to be realized by the consumer themselves, rather than their insurance company or employer.

If price transparency can really take off, it could disrupt the health industry in more profound ways.

The future of health care, Parente said, likely looks more like buying a USB cord online. If price transparency is taken to its logical conclusion, he said, patients would be able to compare costs, schedule procedures and pay for them, all in one fell swoop online.

"I'm waiting for the day when the Amazon-ification of this thing finally takes hold," he said

The story has been updated to correct the title of Eric Borgerding.