Massachusetts Medical Price Transparency Law Rolls Out

Physicians Must Help Patients Obtain Cost Estimates

Massachusetts physicians and hospitals are now required by law to provide cost information for procedures and services to patients who request it.

The new price transparency regulations became effective for physicians and hospitals on January 1, 2014.

What Physicians Need to Do

  • Provide the patient with the CPT codes for all anticipated services and procedures. Patients will provide those codes to their health plan to obtain the contracted costs for the professional services, facility fees, and out-of-pocket costs related to the request.
  • Patients should also be given the phone number of the facility’s billing office, which may be able to provide additional information about facility costs.
  • Cooperate with health plans’ requests for further information in a timely fashion, to help the health plans make the most accurate estimates possible for your patients.
  • Download a sample patient information form here.
  • Browse the list of health plan websites

Health insurers have been required to provide information on cost estimates for office visits to physicians and specific tests and procedures since October 2013.

The provider must give patients any information — such as CPT codes — that their insurer needs to calculate what their out-of-pocket costs will be.

The new requirement is part of an ongoing rollout of Chapter 224, sweeping payment reform legislation passed in August 2012 that seeks to improve health care quality while reducing costs through various strategies, including alternative payment methodologies and increased price transparency.

Will Allow Comparison Shopping

State officials have said they hope the new rules will transform the health care industry by allowing patients to easily obtain medical cost information and comparison shop for their care.

The law states that if asked by a patient, a health care provider must disclose the allowed amount or charge of the admission, procedure, or service, including the amount for any faculty fees required, within two working days. The law defines “allowed amount” as the contractually agreed amount paid by a carrier to a health care provider.

Quick Take: New Price Transparency Regulations

  • Became effective for physicians and hospitals on January 1, 2014.
  • If asked, providers must disclose allowed amount or charge of an admission, procedure, or service within two working days. (The law defines “allowed amount” as the contractually agreed amount paid by a carrier to a health care provider.)
  • Provider must give patients or insurers any information — such as CPT codes — that their insurer needs to calculate what their out-of-pocket costs will be.
  • Providers who participate in insurance contracts must provide “sufficient” information about the proposed procedure or service to allow a patient to use the insurer’s toll-free telephone number/website established to disclose costs.

The law also compels providers who participate in insurance contracts to provide “sufficient” information about the proposed procedure or service to allow a patient to use the insurer’s toll-free telephone number and website established to disclose costs.

According to guidelines to carriers issued in mid-December by the Division of Insurance, insurers are expected to communicate with providers, after securing patient permission, to obtain enough information to determine price information and cost data.

“It is anticipated that providers will cooperate with carrier requests to provide such information to consumers and carriers should endeavor to give providers a reasonable time within which to provide the information,” the memo said.

Although the new law has dramatic implications, many consumers seem unaware so far of their new rights to cost information.

Few Requests So Far

Blue Cross Blue Shield of Massachusetts has been averaging less than three cost requests per day, according to Bill Gerlach, director of member decision support. Physicians may experience a similar trickle of requests, but as the law becomes better known among patients and more of them move to high deductible plans, that may change, some observers say.

Many physicians are also just learning about the new requirement and wonder how it will work on a day-to-day practice level.

Partners In Internal Medicine’s George Abraham, M.D., worries that patients will get so frustrated by the multiple phone calls they’ll have to make to gather the various cost components that they’ll just give up.

“On paper it looks great. We’ve increased transparency, but in reality it’s mired in red tape,” said Dr. Abraham. “It could take days for patients to get all the information they need. It’s not user-friendly.”

Atrius Health said it hopes its providers — and patients — will have a fairly easy time getting health care cost information. It has implemented a software program that gives providers easy access to not only their own charges, but also information from the insurance company about patients’ out-of-pocket costs.

“It provides a one-page report for patients that tells them how much we typically get reimbursed by the plan and what the deductible and co-pay would be — and where they are in their ­deductible — based on the insurance product,” said Chief Medical Officer Richard Lopez, M.D.

Some Cite Opportunity

There are a few caveats, to the Atrius system, however. It is populated with insurance data from only the state’s largest insurers and, as with other practices, lacks cost information for providers outside the Atrius organization. He conceded that most physician practices do not have the resources to implement something similar.

Bruce Leslie, M.D., of Newton Wellesley Orthopedic Associates, said he supports the intent of the new price transparency law, and even sees a potential upside for community practices like his.

“We suspect our costs are less than at the big academic centers so this could be a good marketing opportunity for us,” said Dr. Leslie.

—Vicki Ritterband
Vital Signs Staff Writer
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