Beginning January 1, 2021 –No More Surprise Medical Billing
Back in November, President Trump signed an executive order directing the U.S. Health and Human Services Department to develop rules mandating transparency in medical billing. Those rules have now been developed, and they become effective on January 1, 2021. U.S. Hospitals will then be required to publically publish their real prices for the medical services and procedures they provide.
As the founder of “Patient Rights Advocate”, Cynthia Fisher describes the effects of these new rules, “For the first time ever, hospitals are required to publish their real prices, including their discounted cash and secret negotiated rates. With this information, consumers will finally be empowered to put their health and financial needs ahead of the profits of hospitals and insurance companies.”
In a press release by Fisher’s organization, they describe these changes as providing sunlight on prices which will “disinfect the putrid swamp of special interests, middlemen and backroom deals that have led to today’s sky-high health care prices. This will enable health care consumers to have financial certainty rather than the current system where they don’t know what they will owe until their bills arrive weeks and months later. It will also enable consumers to shop around for less expensive health care –thus lowering the costs and increasing the quality of care.
According to the news release, a recent RAND Study found that the hospital prices that non-Medicare patients pay is 247% more for a medical procedure than the hospital charges Medicare for the same service at the same location. When the billing transparency rules become effective on New Year’s Day, medical care consumers , including patients and employers, will be able to identify which hospitals overbill and price gauge and enable the consumers to contract with less expensive, and in many cases, higher quality alternatives.
Roughly half of Americans say crippling costs have forced them or a family member to delay some treatments, even corona virus treatments. Inflated medical bills cause 1 in 6 Americans to have a medical debt that is in collections, according to the Urban Institute.
Fisher compares this revolutionary change to the health care industry with a similar chance that happened in the airfare market years ago when airline deregulation enabled price transparency and third party platforms such as Kayak and Expedia harvested prices and established competition among airlines, enabling travelers to search for the best deals, resulting in about 50% reduction in airfares. It is anticipated that these third party platforms may now be able to do the same thing with health care providers, and the resulting competition could similarly reduce the costs of medical care and increase the quality. Those savings could revitalize the entire American Economy.