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NY Times probe reveals huge cost disparities for same service

by John R. Fischer, Senior Reporter | August 27, 2021
Business Affairs Insurance
Price disparities for the same medical service can be huge and vary by hospital, insurer and health insurance plan
A patient with UnitedHealthcare’s HMO plan can expect to pay $1,093 for an MR scan at Aurora St. Luke’s in Milwaukee, as opposed to a patient with its PPO plan, who will pay over $4,000 for the same service. While previously unknown, such disparities are becoming public knowledge following the passage of the Hospital Price Transparency Rule that requires hospitals to disclose rates they negotiate with insurers for their services.

To better understand the full extent of these disparities, The New York Times, in collaboration with the University of Maryland, investigated medical costs at 60 different hospitals for services ranging from pregnancy tests to X-rays and CT scans.

Among its findings was the fact that certain services may be cheaper for uninsured patients. For instance, the University of Mississippi Medical Center charges Aetna patients $2,144 for a colonoscopy and Cigna members $1,463. Meanwhile, uninsured patients only pay $782. Additionally, those with high deductibles who have reached their deductibles may still have to pay out-of-pocket.

“It’s not just individual patients who are in the dark,” Martin Gaynor, a Carnegie Mellon economist who studies health pricing, told The Times. “Employers are in the dark. Governments are in the dark. It’s just astonishing how deeply ignorant we are about these prices.”

In addition, small health insurers can sometimes secure better deals than top insurance companies, and a single insurer may have a half-dozen different prices within the same facility, based on individual plans, according to the Times. Even simple procedures can have price disparities that amount to thousands of dollars.

This results in patients struggling to pay medical bills and winding up with higher premiums, especially when they are not aware of different rates charged at different hospitals for the same service. At Intermountain Health in Utah, patients pay $1,800-$6,400 for a rabies shot, while at U-Florida Health Shands, the price ranges from $5,200-$13,100.

Introduced under the Trump administration in 2019 and supported by Biden, the Hospital Price Transparency rule is designed to help patients make smarter financial decisions about their health. Insurers and hospital groups that oppose the rule claim the complex nature of medical billing will only “confuse and frustrate” consumers and potentially lead to delays, higher prices and avoidance of necessary care.

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