Politics, Moderate



A solution for budget-busting hospital bills

Corey Friedman on

If you're scheduling a surgery or screening this year, break out the calculator along with your calendar.

Under a federal rule that took effect on New Year's Day, all U.S. hospitals are required to publish online price lists containing average costs for 300 common procedures, and patients can now obtain cost-sharing estimates from their health insurance company before going under the knife.

The rule, CMS-9915-F, was developed in response to President Donald Trump's June 2019 executive order requiring improvements in health care price transparency. Hospitals fought the reform tooth and nail, but the U.S. Court of Appeals for the District of Columbia Circuit upheld the rule Dec. 29, dismantling the flimsy arguments against disclosure in a masterful 25-page opinion.

Consumers can now comparison-shop for routine services like colonoscopies and determine roughly how much they'll be charged after insurers pay their share, reducing the phenomenon of surprise billing that leaves patients powerless and often penniless.

About a third of American workers have medical debt, and 54% of patients in arrears say they've defaulted on their bills, according to a 2020 Salary Finance survey. A March 2019 paper in the American Journal of Public Health cites medical issues as the No. 1 reason for new bankruptcy filings.

That isn't a shock to anyone on a tight budget whose needs go beyond an annual checkup. Health care is the only service where you assume responsibility for a debt without knowing its amount. Price secrecy eliminates hospitals' need to compete for patients' business, driving up the direct costs that appear on your ballooning bills and the indirect costs passed along to taxpayers and insurance enrollees.


Transparency will help businesses and government agencies as much as patients, allowing health plan administrators to research the rates hospitals hammer out with insurance companies. Those figures were a closely guarded industry secret.

Just ask North Carolina State Treasurer Dale Folwell, who's been on a crusade for clear pricing since a summer 2018 attempt to audit the state's billings from Blue Cross Blue Shield. A public records request for the insurer's University of North Carolina Health Care System contract yielded a useless document with more redactions than a Pentagon memo, black rectangles obscuring nearly every page.

"This court decision gives us a real path forward to getting rid of secret contracts and pushing the power down to the consumer to make informed decisions when purchasing health care," Folwell said.

The American Hospital Association sued Health and Human Services Secretary Alex Azar to block the transparency rule. A federal district judge granted a summary judgment for the defendant, which means the claims were too weak to merit a hearing. The appeals court delivered another defeat, but the trade group's anti-patient advocacy continues.


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