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Most States Fail on Price Transparency Laws

Only New Hampshire gets an ‘A’

States are slowly enacting laws on health care price transparency, but consumers lack adequate access to meaningful price information in most states, according to an article posted on the HealthLeadersMedia website.

The only state with health care price transparency laws in place that effectively allow consumers to find the cost of medical procedures before selecting a hospital is New Hampshire.

The New England state was the only one to receive an A for transparency on a “report card” released in early July by two nonprofit organizations, Catalyst for Payment Reform and the Health Care Incentives Improvement Institute (HCIII).

Meanwhile, neighboring Massachusetts dropped from a B last year to an F. It has lots of company at the bottom; 45 states flunked.

The only other states that passed were Colorado and Maine, which received Bs, and Vermont and Virginia, which received Cs.

The report card reviewed “whether states had passed laws or regulations requiring health care price information be made public and examined how well those laws were being put into action by providing residents with access to meaningful price information through public websites and the use of all-payer claims databases (APCDs) as data sources for those sites.”

Despite the states’ dismal showing, Francois de Brantes, executive director of the HCIII, expects better grades in the next couple of years because legislation in favor of transparency laws has been introduced in numerous states.

“It is not just wishful thinking,” he said. “The states that passed new laws just need time to implement them.” For example, Connecticut passed legislation in June with aggressive language seeking more health care price transparency.

This is the third report card released by the two nonprofits. De Brantes believed the previous cards spurred the flurry of legislation. All states should look to New Hampshire as an example of how to do it right, he said. In one the year, the state rebounded from a grade of F to an A.

“The state’s new website, NH HealthCost, is now a prime example of a price transparency website built with consumers in mind,” the 2015 report states. “The site accounts for both insured and uninsured patients and provides great details on the methodology in consumer-friendly terms.”

Massachusetts lost its previously high rating because “in 2014, legislation went into effect that placed the responsibility of transparency on health plans, and the government mandated website went dark.”

The reluctance of insurance companies, hospitals, and health systems to release pricing information is preventing many states from achieving full transparency, de Brantes said.

New Hampshire didn’t need approval from insurance carriers or providers to develop NH HealthCost. It was created by a state statute to make health care data available as a resource for insurers, employers, providers, purchasers of health care, and state agencies. In addition, payers and providers more easily accepted transparency because the website’s methodology uses bundled rates, which do not allow the website user to know everything about the underlying fee schedules or the payer-provider contract terms.

Sources: HealthcareLeaders Media; July 31, 2015; and Report Card; July 2015.

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