Senate Panel Advances Bill to Make Hospitals Compete on Price

A Senate panel on July 22 advanced a bill that would expand current hospital price transparency rules aimed at empowering patients to comparison shop for services and increase price competition in the healthcare industry.

The Patients Deserve Pricetags Act, sponsored by Sens. Roger Marshall (R-Kan.) and John Hickenlooper (D-Colo.) and 22 others, was recommended for adoption in a nearly unanimous vote by the Senate Committee on Health, Education, Labor, and Pensions.

The proposal comes during an election year when nearly all Americans (94 percent) believe Congress and the president must act to reduce the cost of healthcare, according to recent polling.

“Patients deserve price tags, not surprise billing,” Marshall said at the July 22 committee meeting. “Once and for all, we’ll force transparency and competition into healthcare.”

Critics of the bill said its requirements were redundant, burdensome for hospitals, and would provide little benefit for consumers. 

Prices, Not Estimates

The bill requires hospitals to post the actual price for each service in plain language.

Federal regulations have required that hospitals post prices online since 2020. 

Nearly all hospitals post at least some prices online, and many have online pricing tools or offer individual estimates by phone. But the amounts are nearly always presented as estimates, not firm prices.

Also, many hospitals have stopped posting actual prices or even estimates in favor of pricing formulas or other statements, according to a report from the Patient Rights Advocate organization.

Patients are routinely asked to sign a statement of financial responsibility, which is often a legally binding contract, without knowing how much they will be charged, how much their insurer will pay, or how much they’ll have to pay out of pocket.

“Could you imagine checking out [at the grocery store] and not knowing what the price was?” Marshall said on July 22. “Healthcare is the only business in the world that’s allowed this to go on.”

The American Hospital Association objected to the bill in a July 2 letter to Congress saying that the new requirements placed a considerable administrative burden on small, rural hospitals.

The group also said the requirement to list all shoppable services in a consumer-friendly spreadsheet would be untenable to most hospitals and of little value to most consumers.

Self-Service Insurance Estimates

The bill would also codify into law the requirement that insurers publish machine-readable files showing their negotiated rates, out-of-network charges, and prescription drug prices.

In addition to codifying existing cost disclosure requirements, the bill adds a provision that consumers must be held harmless for any errors made by the insurer’s self-service estimating tools.

America’s Health Insurance Plans, the trade group for health insurers, noted that health insurers are already providing consumers with this information. In a June 10 statement to Congress, the group said most companies already have online estimating tools.

The group also expressed concern that the hold harmless provision could make insurance companies liable for changes made by hospitals. “Final billed charges depend on many factors that occur at the point of care and are beyond a plan’s control,” the group said.

Transparency for Plan Sponsors 

The bill also prevents third-party administrators from restricting data access to claims data, giving employers the information they need to shop for more competitive plans. 

More than two-thirds of employees with health insurance are covered by self-insured plans. That means the employer actually pays the claims while an insurance company manages the plan for a fee. 

However, the 3rd-party administrators typically withhold data on the plans from the employers who pay for them.

“This makes it almost impossible for people to make financially sound decisions about their healthcare,” Hickenlooper said on July 22. “It hurts the 180 million Americans whose health insurances are sponsored by their employers.” 

Itemized Billing

Hospitals would be required to provide within 30 days a detailed, itemized bill listing each distinct item so patients can compare the prices provided in advance to the actual charges. 

The idea is to catch billing errors and prevent patients from being overcharged, but the American Hospital Association called the requirements unrealistic in a June 10 statement submitted to Congress.

“The 30-day billing deadline is impossible for hospitals to meet when insurers have not yet adjudicated claims during that time period,” the group said. 

“Also of concern, the bill prohibits collections by hospitals if final charges exceed the estimate—with no allowance for clinical changes and no dispute resolution pathway,” the statement said. 

Increased Competition

Champions of this legislation are convinced it will spark competition in the healthcare industry, which will then lower prices. 

“A hundred and eighty million Americans have amazing purchasing power,” Hickenlooper said on July 22, speaking of those covered by self-insured employer plans.

“This bill will lower the cost of healthcare by $1,000 a month for a family,” Marshall told The Epoch Times. “[It] will do more to lower the cost of living than anything else sitting out there.”

Sen. Rand Paul (R-Ky.) disagreed. “I think that it mistakes the problem for being transparency, and the problem is actually that prices are fixed,” Paul told the committee on July 22. He added the bill would do nothing to change the prices for Medicare and Medicaid, which are set by federal formulas.

Marshall told The Epoch Times he believed the bill would reach the floor for consideration but had not yet spoken with either the Majority Whip or the Majority Leader about the timing.

“Hopefully, before the midterms,” he said.

Nathan Worcester contributed to this report.