Early results from our California crowdsourcing project on MRI prices are in. Payments range from $255 to $2,925.15. MRI pricing is a complete mystery: What should you pay? Can you ask for a discount? We’ve been looking at health-care prices for three years, so if we say it’s a mystery, we can imagine what it looks like to you.
How much should you pay? Well, one person was told the price is $1,850, but if you pay up front, you can save almost $1,300.
The note on our form, shared by our community member: “I was told procedure would be 1850. I have a 7500 deductible. So I talked to the office mgr who said if I paid upfront and agreed not to report the procedure to Blue Cross, that it would be $580.”
On our Facebook page, one contributor wrote, “I was going to be billed $830 through my PPO for an MRI. The cash price? $500.”
This is the second part of our crowdsourcing project in California with KQED public radio in San Francisco and KPCC/Southern California Public Radio in Los Angeles. We have been asking people to share pricing information for MRI’s, especially of the back; last month we collected mammogram pricing.
A note: We are often asked in this crowdsourcing prototype project if we believe what we are being told by people who fill out our online form at the PriceCheck page. The answer: yes, we do. Though some of our community members have said their bills are confusing, or the coding they see on the bills doesn’t match what we’re collecting, we believe our contributors’ shares. We have seen wide variations in health-care pricing.
So: here are early results.
Lower-back MRI: $255? $602.85? $973.25? $1,660?
Eight identical MRI’s, and eight vastly different payments.
No. 1: We heard from one Kaiser member, who received an MRI of the lower back, without contrast or dye (CPT code 72148) at the Kaiser Antioch Medical Center on Sand Creek Road in Antioch, Calif. This person was charged $973.25 and paid $973.25; insurance paid nothing.Comment: “This price was the contracted amount through my insurance. Deductible had not been met so I was responsible for all charges. This does not include the two office visits required to obtain and analyze the results.”
No. 2: Same kind of MRI, code 72148, at Radnet Medical Imaging at 3440 California St. in San Francisco. This person was charged $1,660 and paid $1,660, out of HSA funds. (Note: Our ClearHealthCosts pricing survey included that Radnet location, and they did tell our survey agent that their cash price is $1,660.)
No. 3 and No. 4: Two of our community members sent in prices for that same MRI of the lower back (CPT code 72148), both at a Health Diagnostics location at 325 Sacramento St. in San Francisco.
One a Medicare recipient, was charged $2,450, and Medicare paid $255. There was no patient payment.
The other was charged $602.85 and paid the full $602.85. Comment: “I had to pay the full price since I had not yet met my deductible. For some reason Blue Shield of CA said it would have only been $65 if I got it done in a lab instead of a center, not sure what that means.” No email was given, so we can’t follow up for comment.
Also one of our community members sent in a pricing sheet for imaging procedures from Health Diagnostics (see below). It lists a $575 cash or self-pay price for an MRI. We could not find it on the Health Diagnostics website, so we are reproducing what was scanned and sent here. We are also attaching spreadsheets for several other imaging facilities that have posted prices online or made price lists to give to patients. Cash rates here seem to range from $399 to $3,388, though the specifics are not always clear, and some providers call their posted prices “estimates.” (See a bit below for our ClearHealthCosts pricing survey information.)
The Health Diagnostics website does not seem to have the Sacramento Street location. It does have one California location, in Alameda.
No. 5: Provider, Providence St. Joseph Medical Center in Burbank: insurer, Medicare and Blue Shield Medigap.
Charged price $2,266; Medicare paid $201.07, and Blue Shield Medigap paid $133.42; you paid $0.
Comment: “The scan and 3D radiology was $2266.00. Medicare paid $201.07 and Blue Shield Medigap pays $133.42. The 3D radiographic procedure (76376) was $338.00 and included in the $2266.00 amount.”
No. 6: Provider, Vallejo MRI on Glen Cove Marina Road in Vallejo; insurer, Blue Cross.
Charged price, $580; insurance paid, $0; you paid, $580.
Comment: “I was told procedure would be 1850. I have a 7500 deductible. So I talked to the office mgr who said if I paid upfront and agreed not to report the procedure to Blue Cross, that it would be $580.”
No. 7: Provider, Palo Alto Medical Foundation; insurer not named.
Charged price, $2,650; insurance paid, $0; you paid, $2,650.
No. 8: Provider: Kaiser Permanente Medical Center on West McArthur Boulevard in Oakland; insurer, Kaiser Permanente.
Charged price, $2,785; insurance paid, $2,785; you paid, $10.
Comment: “Service delivered on 7.19.14; ‘hospital’ bill activity summary arrived on 7.29.14. charges showed as $2,785 and activity summary shows I paid $10 at time of visit. However, values listed above came with a ‘pending’ notice – pending ‘paid by insurance/adjustment’ and pending ‘amount I owe.’ so the total charges seems to be $2,785. What portion of that I owe may go up from the $10 I paid at time of service.”
Oakland prices: Two Telegraph Avenue providers
Update, 7/31/14: More recent community shares include two Oakland MRI’s. Here they are: Both paid cash.
No. 1: Provider: Magnetic Imaging Affiliates at 5730 Telegraph Ave. in Oakland. Procedure: MRI 72147, chest spine MRI with dye.
Charged price, $3,163; insurance paid $0; you paid $3,163.
Comment: “High deductible so paid the whole thing and then found out I could have had it done for *HALF* the price only blocks away. My first foray into individual insurance and it sucked. Need to shop around assuming can even get a price quote.”
No. 2: Provider: Norcal Imaging at 3200 Telegraph Ave. in Oakland. Procedure: MRI 72141, upper back MRI without dye.
Charged price, $1,000; insurance paid, $0; you paid, $1,000.
Comment: “Discount for paying day of service. ”
A different MRI, but same wild price disparities
We also got reports from three lower-back MRI’s, both with and without contrast or dye: this procedure (CPT code 72158) uses an injection of contrast material to better visualize what’s going on under the skin.
No. 1: Provider, Marina del Rey (Unclear; Marina del Rey Radiology? Marina del Rey Hospital?); insurer, Anthem Blue Cross (California).
Charged price, $319.92; insurance paid, $223.72; you paid, $96.20.
No. 2: Provider, North Bay MRI Center in Pinole, Calif.; insurer, Medicare and Anthem Blue Cross (California).
Charged price, $466.69; insurance paid, $459.03; you paid, $0.
Comment: “Medicare paid 365.73 and Anthem paid 93.30. ”
No. 3: Provider, Stanford Medical Center, on Pasteur Drive in Stanford; insurer, Aetna.
Charged price, $5,647; insurance paid, $2,925.15; you paid, $0.
Comment: “Aetna did not actually pay $5,647. The Aetna adjusted member rate was $2,925.15.”
Upper-back MRI: $305? $1,984? $2,294?
Here are reports from two other very similar MRI’s, an MRI of the cervical spine or upper back without contrast or dye (CPT code 72141). This is very similar to the one coded 72148, and usually the prices are comparable.
One person, at Imaging Healthcare Specialists in San Diego, was charged $1,984, insurance paid $0, and the patient paid $305. The comment: “Insurance paid $0 because deductible not yet met.”
Another person, at Kaiser Permanente Medical Center on MacArthur Boulevard in Oakland, who is insured by Kaiser, was charged $2,294 and is being billed for $2,294. The comment: “At the time I was billed for this procedure, Kaiser Permanente did not have on record that I was covered under COBRA. I believe this is the price KP would charge an uninsured person. COBRA should pay for this eventually, once everyone’s paperwork gets caught up. (This is another issue – I’ve been covered under COBRA for nearly 6 months, but this information was not communicated to KP’s MRI Department, despite my numerous calls to KP and the COBRA insurer. It’s taken me months to sort this out! A single payer plan would eliminate all of this paperwork, wasted time, angst, and headaches.”
This explains a lot. I need an MRI annually on a Brain tummer. I have a deductible but get denied by my insurance. every other year. They are charged over 3 000 by the facility and the insurance carrier knocks it down to 800, I pay the difference as my deductible had not been met yet.On the off years I am told by the facility that if I pay it up front, since it is denied by the insurance that I can have it done for 580, cash. One year I had the MRI done after I had been ill and used up my deductible. The insurance co only paid 360 dollars.
Thanks for the Information
Healthinsuranceexchangeonline.com. online quote system can provide you with the latest rates from Kaiser health insurance, Kaiser health plans, Kaiser insurance and Kaiser insurance California.
Few years ago I was having MRI every few months on full spin e and brain done broken up not at same time,they would do 3 MRI’s total on me.Anyhow Insurance was covering it and INSURANCE payed 1250 per MRI..However after my 3rd MRI insurance decided they would drop me cause I was ‘high risk’ so here I was NO INSURANCE company would touch me.I got a few more MRI’S got bill and POTTIED Myself the 1250 that insurance was paying jumped to 7500 for a uninsured person,GREEDY GUTS Hutchinson ks hospital.
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Couldn’t agree more. Everything we need to know about the lack of integrity in this area is:
1. The whole situation is summed up in Uwe Reinhardt’s 2006 paper “Hospital Pricing in America: Chaos Behind a Veil of Secrecy.”
2. In the 8 years since, nothing much has changed about it.
Yes, we need regulation, as you say. But the situation is SO corrupt, SO far out of control, with the money-makers in charge, you’re right: only crowd-sourcing from the grass roots will go around the perverted structures.
Prediction: watch for a move to prohibit crowd-sourcing of price data, complete with assertions that the resulting conclusions would be unreliable. That sounds like it would pretty much match why they got Medicare to stop reporting “never events.”
We do need regulators, because a fair amount of medical care is involuntary.
Also, we get medical care episodically in our lives for the most part.
In other words, we cannot threaten providers with not buying care, and we cannot threaten them with never going back again if we are ripped off
It is a unique industry that needs unique regulations.
As you know, I’ve long called for special rules that govern how much hospitals and doctors can charge for care that must be delivered under emergency conditions, especially for patients who are either uninsured or find themselves out of network. It’s also important to note that roundly 50% of inpatient hospital admissions come through the emergency room. That’s a lot of care.
I think there is room for patients to communicate bad experiences regarding both care itself and its cost through social media. Negative word of mouth commentary can be pretty powerful if there is enough of it and it’s persistent.
Also, people need to better understand that accessing care through the most cost-effective high quality providers will mitigate health insurance premium increases and reduce the crowd-out effect on employers’ ability to raise wages. This is a big reason why we need both price and quality transparency tools for patients and referring doctors.
I just recently read of an experiment by some of the Blue Cross insurers that made actual contract rates for MRI’s available to patients in some markets but not others to see what would happen. Patients incurred no penalty for choosing a high cost center and quality was deemed to be comparable no matter where they went. Patients in markets that had access to the price information were much more likely to choose lower cost centers. For more complex procedures like heart surgery, credible quality information is also critical but the transparency movement appears to be gaining some momentum albeit slowly. Longer term, I’m optimistic about this.
Oops, sorry if I misspoke.
I completely agree, we need regulators. But I don’t know that the current regulatory system can be counted upon to solve the problems we’re discussing!
Thanks Jeanne, you have done a great job throughout the exchanges on this blog.
You can call it health courts, or you can call it consumer protection, or you can call it Rumpelstiltzkin…………but some entity must rise up to slap down places like Bayonne.
In way too many sectors of health care, the more you bill, the more you make.
In the non-health economy, if you bill too much you cut off some of your customers. This leads to strategic decisions. If a firm decides to send huge bills to non rich customers, they go broke
But in America we have decided (more or less passively) to let hospitals act as independent economic entities — rather than regulated public utilities.
This was caused in part because counties and cities wanted desperately to get out of the hospital business in the 1980’s, and so quasi-public institutions were sold to private firms.
Reading about Bayonne makes me long for national price controls on emergency care.
Thank you, Bob.
You know much more about this industry than I do, but …it’s not clear to me that we can look to legislators or regulators for the solution, as much as we might hope salvation lies there.
We’re placing a bet on the people — for example, the people who have flooded to our PriceCheck app to talk about their outrage.
Power to the people, we say. My friend ePatient Dave de Bronkart talks of this as a moment at the dawn of social movement, like civil rights or feminism.
It will take all of us together, don’t you agree!?
We must use our knowledge and our willpower — especially those of us here at THCB, with so much knowledge — and work together to elevate the good in this industry, of which there is much. And we must also shine a very clear light on those who enjoy ill-gotten gains and play money medicine, harming patients and tarnishing the reputations of the good people who are here to help.
Barry I would be delighted with the regulatory changes that you propose. At this time I do not know who will supply the political pressure to get them enacted, however.
The uninsured are not a voting bloc, that has been shown over and over. Maybe a Nader-like consumer rights movement can move the dials.
I still think that health courts could be like a nuclear option that is not enacted, but is threatened so that some action does take place. Rather like the situation in postwar Europe, where the Communist party was a real threat and the parties in power enacted many social benefits so as to keep out the Communists.
As many more people gain health insurance coverage under the ACA, including Medicaid expansion, I think there is a reasonable prospect that politicians, especially liberals, will turn their attention to costs and prices. There is also the possibility of state level action. Among those running for governor in Massachusetts this year, for example, is Charlie Baker, former CEO of Harvard-Pilgrim Healthcare and a strong believer in price transparency. Also, I note that the late economist, Herb Stein told us that if a trend can’t continue, it will stop.
Just yesterday, I read a story on Yahoo about a man here in NJ who damaged his finger with a hammer. He waited a few days to see if the injury would heal by itself but it didn’t so he went to a nearby emergency room at Bayonne Medical Center. They basically bandaged his finger and gave him a tetanus shot and sent him a bill for $9,000! The hospital blamed it on the fact that his insurer, United Healthcare, didn’t have a contract with the hospital because it wouldn’t pay them enough. United ultimately paid $6,640 and because of the publicity in the media, the hospital wrote off the patient’s liability. The service they provided, even within a higher cost ER structure, wasn’t worth more than a few hundred dollars at most in my opinion. I wonder how hospital executives would feel if they were presented with such a bill and then hounded by collection agents to pay it and I also wonder how the hell they sleep at night.
By the way, I’m a strong supporter of specialized health courts to handle medical disputes instead of juries who can easily be swayed by emotion. I don’t see why hospitals can’t be sued for dealing in bad faith in some of these egregious pricing cases. When patients agree to be financially responsible for care, they are implicitly agreeing to pay a fair and reasonable sum, not sum outrageous amount pulled out of the air which is what chargemaster prices have become.
Here in Colorado, I went to my regular dr’s office with a painfully stubbed toe. He used a cautery needle to pierce the nail and drain the hematoma and sent me on my way. I thought the $700 price was high when I got the bill. Imagine the shock a week later when I got the bill for $2,300 for the “facility fee”. Because, you guessed it, at the time my doctor’s office was the “Family Physician” center arm of the big academic medical center, and my treatment crossed some invisible line which triggered “big greedy hospital pricing” instead of the “normal dr pricing” I was accustomed to from this dr.
And here’s the kicker: I am insured. That $3,000 bill for a stubbed toe was the price AFTER the insurer took their discount. Had I been uninsured, they would actually have tried to bill me more.
Did you challenge the $2,300? We hear quite often that bills are sent in error, and that when people call either the provider or the insurer, the response is “Oh, never mind, you don’t have to pay that.”
It all depends on the situation, but it’s far from uncommon.
The hospital was absolutely immovable on the $2,300 facility fee. If you really want the gory details…
It was billed under an incorrect procedure code. Although their billing sheet used by the doctors correctly describes it, the code used is actually for draining via incision not by cautery needle. Hospital billing of course insisted that the code was correct, because of course I could not possibly know that, could I? Neither the hospital nor the insurer would tell me what the charge would be if the correct procedure were billed.
The hospital billing people actually slipped up once and referred to “your admission” and believe me, I tore into them over the fantastic claim that when the primary care dr walked back into the exam room with a cautery needle, that this constituted a hospital admission. But wait, there’s more. In the exchange of data from their satellite clinic, they “updated” the clinic’s records with a very old address from hospital records when they recorded my “admission”. This eventually resulted in a $17.25 charge from the clinic being sent to collections, while I was still trying to get them to correct the charges, without them ever even sending a bill to my correct address for that amount. Yet, the hospital records got updated from the clinic with the correct address, so I got those bills.
(Yes, they recalled the $17.25 from collections. I actually spoke to multiple people. The first one was nice, she figured out the error in the address and how it happened, but it stayed in collections. Then she was gone, and the next person in billing was quite insistent that they had sent all those $17.25 bills to the correct address. She was also insistent that they would never recall it from collections. I ordered her to. Literally, I yelled at her that “You WILL recall this bill from collections. And you WILL send me a bill at my correct address. And then I will pay it.” By god, I got a bill from them 3 days later. And paid it.)
Anyway, I wrote the dr a letter complaining about the charges, got a call from a nurse saying that he agreed the charge was unfair for what was done. And then I was never billed again. Ever. Not for $1. No EOBs, no communication at all on the subject. I suspect that the dr, knowing how screwed up his employer is, simply “corrected” my medical record and deleted the encounter. Yeah, there’s all kinds of things wrong with that, but I think that’s what he had to do in order to avoid such a gross abuse of his pt. (I’ve never been back to him. After that experience I decided to find a dr who was in independent practice. I now realize that it is important to me to have a dr who is in control of his billing.)
For the record, had the dr not done that for me, I would not have paid $3,000. I would have gone to court with it, arguing that the charges were fraudulent and abusive.
When I’ve had disputes in the past with hospitals, insurers or large companies in general that I was unable to resolve through normal channels, I’ve written a polite letter to the CEO summarizing the facts and my preferred remedy. Usually, the letter gets forwarded to the appropriate department in the organization and it just about always gets resolved to my satisfaction on a timely basis. If you have a similar issue in the future, writing to the hospital CEO is worth a try.
My favorite resolution actually involved a colleague of mine who received hospital and doctor bills totaling about $20K that our employer’s health insurer initially refused to pay following an inpatient surgical procedure because she failed to notify them after she went to the ER late at night. With my help, she drafted a well written and well organized letter to the insurer’s CEO. She was later told that the matter was “sent upstairs” for further review and was ultimately paid in full except for an $800 bill for an assistant surgeon that the insurer didn’t think was necessary but her hospital required.
I once had a dispute involving much less with my local hospital that left me exasperated. I finally sent a letter telling them that while I’ve never sued anyone in my life, I was considering suing the hospital for dealing in bad faith. A couple of days later, I got a call asking where I would like the check to be sent.
Yes, Massachusetts is wrestling with price-fixing. IT will be interesting to see if they can make that happen, given the political and logistical problems.
Also, New Jersey: Ah, that hospital. That’s their business model (insert deep and gusty sigh)
I have proposed the creation of specialized Health Courts.
These would be federally funded, placed in about 100 locations, staffed by
a mix of judges and doctors and citizens.
Anyone who felt cheated by a health care bill could come before such a court. They would pay a fee of $100 perhaps. All collection activity on such a bill would cease until the court had made a decision on fairness.
The court’s opinion would be binding. If they set the amount at the Medicare rate plus 15%, that would be all that the health care provider could collect.
The proceedings would be on the public record.
The goal would not be to have thousands or even millions of transactions tied up in the courts. The goal would be to scare providers into treating people fairly.
Bob Hertz, The Health Care Crusade
Bob, these courts would be flooded with cases if no one had any idea what constituted being “cheated”. Small claims (at least in this state) now is hard to navigate for most people as lawyers ban any guidance by filing clerks on the process.
Bob, I respect your opinions but think this one is just a wacky idea for something that should be unnecessary if these providers were regulated properly.
I’m inclined to agree with Peter on this one. So-called price gouging affects mainly the uninsured and people who need care under emergency conditions and find themselves out of network. I think the following regulatory changes could fix this: (1) for uninsured patients, limit charges to 115% of Medicare regardless of the patient’s income and assets and (2) if an insured patient is out of network and needs emergency care limit charges to the insurer’s in network rate.
This issue of out of network providers used to come up all the time in hospitals with radiologists, anesthesiologists, pathologists and ER docs, none of whom the patient usually has any role in choosing. I’ve been told, however, that most hospitals now require non-employee doctors who practice in the hospital to be members of the same insurer networks that the hospital itself participates in.
To foster price transparency, regulators or legislators need to eliminate the confidentiality agreements between insurers and providers that currently preclude the disclosure of actual contract reimbursement rates. That way, both patients and referring doctors can much more easily identify the most cost-effective high quality providers in real time.
We also need to get rid of the requirement that providers bill everyone, including Medicare and Medicaid, at the same rate which is the artificially high full list price or chargemaster rate in the case of hospitals. Medicare and Medicaid then pay their administered (dictated) price and insurers pay their contract rate less the member co-pay and deductible, if any. For insurers that haven’t already done so, they should negotiate their contract rates as a percentage of Medicare rather than a discount from chargemaster which I think most of the larger hospital systems and provider groups already do.
Boy, I think it is about time that people start taking back health care. I am an RN, but unfortunately for the past 7 years I have been fighting insurance companies for reasonable health care. I was pretty vocal about it and was even invited by some organizations to speak/be interviewed. IMHO, I am not the greatest speaker, however, but I do have a love for writing. I write about health care as much as i can. First off, I am under wc (workers compensation) now for my back, and although my case is moving towards settlement (finally), the third-party insurers for my former employers, have refused to approve almost all the treatment my doctors have asked for the care of my not-so-good lumbar spine. Sometimes they say the claim is denied, other times they ignore what tests show. Now they continue to contend that I have “chronic non-specific pain”, which is actually new-onset nerve damage, that is not so new now because it started 14 mo after my last lumbar surgery, which was Aug, 2011, My doctors think it is ridiculous that their requested treatment has been denied.. Since Feb, my pain doc (an anesthesiologist) has been requesting a CT Myelogram, where a radiologist injects dye into the spine and takes a CT after. I have had an MRI but it was inconclusive, because I have artificial discs in my spine that are stainless steel, which means they produce artifact on plain MRIs and CTs and that limits what the radiologist can see. WC did pay for an MRI, after several months of my doctor asking, but at the time, the case adjuster told me, “they really shouldn’t be approving this test”. So back in Feb, my doc wrote a prescription for the myelogram, thinking it was approved, I called the place for an appointment, and they called back a few days later, saying the test was denied by wc, so I asked the cash price and was quoted minimum $5,000. Their test is done in the hospital and the patient is kept afterwards on what is called a short-stay visit, which means less than 24 hours. After numerous denials, living with increased pain and symptoms, recently, I asked my doc what would a radiology center charge me as a cash patient and his answer was around $850. This was after waiting over two months for what they call an Independent Medical Review (IMR), sent by my doctor because I was being denied the myelogram, PT, injections, medication, etc.. I received a letter from the state wc entity that they were requesting missing info from the wc company they needed to determine the IMR. They had 15 days to respond or they would be fined $4,500 and I might be granted the IMR. This week, I received the second cc’d letter that the state people sent wc, giving them another 15 days. Yesterday, I went to a radiology center and signed a lein against my future wc settlement and got the test done. They did not have me stay for four hours after the test, which most places recommend to check for side effects of the test and the dye they inject into the spine, but I am fine. I am following the center’s orders to stay in bed, except for bathroom breaks for 48 hours. This is so the small hole in the spinal canal the radiologist made heals and I do not get what they call a spinal headache, which sometimes requires more medical intervention. I am thinking two things: Soon I should have more definitive proof what is compressing my spinal nerves and I should have done this months ago but i didn’t because I thought the cost would be prohibitive. I have missed months of life and have been living with moderate to severe pain everyday because of wc. Now, I hope I can get this fixed or at least better. Prior to wc I fought my private insurer (starts with a B) for back surgeries, which I got, but with them or wc, there is a common thread: they do not play by any rules and they do not have the patients best interests in mind. (I should say that I am not the only one who knows I have nerve compression, I did get what they called an EMG which showed I have nerve compression at two spinal levels, with it being moderate at one, where I have lost some nerve axons. This is the test that wc continues to deny I have done, although it was done last September. They call this an objective test, although wc doctors have said in denial letters that I have no objective evidence of nerve compression.)
I’ll add that imaging lends itself especially well to reference pricing. For example, an insurer could tell its members it will pay $500 for CPT-4 code 72146 and here is a list of 10 hospitals and independent imaging centers in the region that will do the test for that price. If the patient wants to go to a more expensive facility, he or she will be responsible for any additional cost above the reference price so call ahead for firm pricing.
Barry, thanks for your expertise. I am a huge fan of your work!
Our heretical notion: make it possible for the people to disclose those confidential rates, without waiting for state legislators, insurers, providers and all the other parties to come to an (improbable) agreement on disclosure, making such an agreement moot.
We may be crazy, but it looks to us like people are Incensed About The Prices and excited to open up their bills.
Beyond that, two thoughts to your points:
1. On pricing, if it’s always someone else’s money, then will they go ahead and buy the expensive equipment and make me/my employer/Medicare/someone else pay for it? What if the market just said “$500 is a good price for an uncomplicated MRI,” with no emergency or complicating factors….
2. On reference pricing. i so want to love the idea, but it seems like old wine in new bottles. Who establishes the reference price? If Reference Price A and Reference Pricer B differ, who’s the judge? Isn’t it still opaque?
We want full transparency — and let the market make the rules. If my neighbor wants a $6,000 MRI, she should have it — just don’t make me pay for it!
I applaud what you’re doing and I’m quite sure that people find it very helpful.
I would still like to see the confidentiality agreements abolished so that referring doctors can identify the most cost-effective high quality providers in real time no matter what care they need and direct their patients to them. My own primary care doc is a member of an ACO. I presume he is eligible for a bonus if he can keep costs for his patient panel below a targeted level. One of the best ways for him to do that is not to withhold care but to ensure that his patients receive necessary care from a cost-effective high quality provider and not have to send patients to an expensive hospital system where contract rates are high because of market power and not care quality.
On reference pricing, CalPERS in CA had some good success using this approach for hip and knee replacement surgery. Prior to reference pricing, it was paying between $15,000 and $110,000 for these operations in Southern CA with no discernible difference in care quality. It set a reference price of $30,000 and 46 of the 110 hospitals in the region agreed to do the surgeries for that price. Within a short time, another dozen or so agreed to the price so as not to lose business. As more and more patients are subject to high deductible health insurance, price sensitivity is increasing.
Regarding MRI’s, about five years ago, I was referred to an imaging center in New York City for a brain MRI. I asked my referring neurologist what it would cost but he didn’t know. The list price turned out to be $1,800 but my insurer’s contract rate was $495 of which my share was 20% or $95. It would be enormously helpful if this information were readily ascertainable in a systematic way in real time. By the way, non-hospital owned imaging centers are just about always significantly less expensive than hospitals and hospital owned stand alone facilities.
We agree about the confidentiality piece. It’s hard to defend that from any perspective, if you ask me.
Of course, we’re journalists, and so we firmly believe that sunlight is the best disinfectant!
The biggest impediment, by far, to true price transparency in healthcare are the confidentiality agreements between insurers and providers that preclude the disclosure of actual contract reimbursement rates. State legislators and/or insurance regulators need to stand up to the special interests and outlaw these confidentiality agreements. It would be extremely helpful if both patients and referring doctors could easily ascertain contract reimbursement rates in real time for all the regional providers of a particular service, test or procedure. That way, patients could more easily and consistently be directed to the most cost-effective high quality providers.
As for the pricing of MRI’s, the biggest cost for the imaging centers or hospital imaging departments in the capital cost of the expensive equipment. The machine and the personnel involved don’t really care whether the image is of the stomach, back, liver, brain or whatever. The price charged should be a function of how much machine and staff time is required to perform the test. If the machine needs to be operated for, say, 10 hours per day and generate $1,000 per hour to cover costs, including the cost of capital, then a procedure that takes 30 minutes should cost $500 and one that takes 45 minutes should cost $750. It shouldn’t make any difference whether contrast is used or not. It doesn’t need to be complicated and it shouldn’t be arbitrary.
I’m guessing Paul’s experience in not being able to negotiate a discount because a bill had already been submitted to insurance was due to the now largely discredited practice of using “most favored nation” clauses (which meant that payors got the benefit of the deepest discount given to ANY other individual or organizational payor). With such clauses in place, providers couldn’t offer discounts without having the discounted price applied to a whole lot of their volume, and so they were loath to do so. Over the past few years the DOJ has brought suit against payors for using this tactic, and many states have enacted laws prohibiting it.
My guess is that MFN has become a convenient pretext for providers.
“Sorry we must fleece you, otherwise we’d be breaking the law.”
David, thank you so much for shedding light on this. Do you have a white paper or blog post we could refer people to when they ask this question? We know what you say anecdotally, though would love case law and/or authoritative voices like yours to point to. thanks!
Here’s one example: DOJ brought an antitrust action against BCBS of Michigan re: MFN clauses and then dropped it when the state legislature banned MFN clauses. — http://shrd.by/65VExK
Also, DOJ and the FYC held a joint seminar on the subject a couple of years ago: http://shrd.by/tRc7F7
As of 3 years ago, I believe about 20 states had MFN clause bans on the books.
“I’m guessing Paul’s experience in not being able to negotiate a discount…”
David, what would be your basis argument for wanting a “discount”? Just because, I’m poor, I have other bills due this month, you guys are making too much money?
The point of the “discount request” is precisely because there is such a wide disparity between “actual cost” and “billed charges.” While this may be distasteful, it is the practice that has been in place. It is why I shake my head daily about the “line item type of cost cutting” that regulators seem to do when they attempt to “control” health care costs. They don’t understand or see the simplicity of eliminating this strange phantom billing practice that exists everywhere, in favor of a more one-to-one billing practice employed by many companies when they offer a product up for sale. When you go to the store to buy a toothbrush, computer, car, you have an idea how much negotiation (or discount requesting) room there is. Why? Because you know that it costs X to make and produce each “widget” and you inherently agree/acknowledge that a certain profit has to be allowed in order for the company to 1-stay in business, 2-pay its employees and costs and 3- make a reasonable profit to develop further products (etc). Why should health care be ANy different? The main impediments, as I see them, are individual greed, insurance company middlemen, and the widespread perception that health care should be free. I think that last one is changing rapidly. But the former two remain as issues to overcome.
The phantom billing practice exists because the feds require providers to bill all patients and their insurers the same amount which is the artificially high full list price or chargemaster rate in the case of hospitals. So, even Medicare and Medicaid get billed at full list and then they pay their administered (dictated) rate and commercial insurers pay their contract rate if they have one.
It seems that this crazy system could be fixed by allowing providers to bill patients and insurers the rate that the insurer has agreed to pay or, in the case of the public insurers, their administered price. People without insurance could be billed at some reasonable percentage above Medicare which I would define as 115% and perhaps a bit more for outpatient services for which Medicare tends to underpay more than inpatient services. NJ requires hospitals to limit charges to 115% of Medicare for uninsured patients with income below 500% of the federal poverty level (FPL) which currently translates to about $120K for a family of four.
Meanwhile, the confidentiality agreements between insurers and providers need to be eliminated so both patients and referring doctors can easily learn the insurer’s contract payment rate before services are rendered.
“The main impediments, as I see them, are individual greed, insurance company middlemen,…”
Hence my question above about what does it costs in other industrialized countries that have much more government control – there is no need to individually negotiate, especially based on, “just because”, the government does the negotiating and keeps costs at about half what we pay. However the insurance industry will argue they make less than 5% profit, so they’re not to blame.
“…and the widespread perception that health care should be free.”
At these prices it’s not free. But the “let the patient pay use reduction movement” will argue that if patients are paying more then they will use less. Don’t these high prices cause less use – isn’t that good?
Do you want the government to determine when you need an imaging study or lab test? Or would you rather discuss that issue with a physician, who is preferably free of financial attachments to said study/test?
Do you think that the costs of services in other countries are good benchmarks for services and goods provided in the USA? If so, on what economic basis do you feel that way? The suggestion that physicians should make the same, lab tests or imaging studies should be similar, or goods and services such as bread, cars, toothbrushes, etc., should cost the same in the USA as in Australia, Russia, South Africa, France, etc., is just not based in economic reality.
Paul, there is a trade off for cost and access. In those countries docs determine the “need” while some restrictions on access is required for the cost. Is triage making some wait in line unethical? Do docs call for more tests when they own the lab?
Am I entitled to know what you pay for supplies, overhead and labor so I can “negotiate” a better price with you? How is the costs here good “benchmarks” on the true cost of health care?
The cost in other countries is reflective of more government control. As a doc I expect you not to want that for obvious reasons.
Do you think the contracted price insurance pays to hospitals/docs to be public knowledge?
How much does an MRI cost in Japan, France, Spain, Germany, Canada.
OOPS! Sorry…..”for the PATIENTS’ well being”.
It is interesting that on the largest physician only internet forum (SERMO) how paranoid docs are about sharing prices. Everyone posts under a pseudonym and no one needs to know where you practice, and yet if you even hint at a price for a service you are virtually shouted down with warnings that you are breaking the law. As with malpractice, it really doesn’t matter what the technical reality is, it only matters what the perception is. And consultants cost money, a lot of money, hence they only tend to be hired when why is trying to make more money, not less.
No, transparency has to come from changes in the system (the way we pay for services) or from non-governmental groups that step up to inform the public.
We’re here to help!
And that is why physician’s malpractice insurance prices as well as the settlements for malpractice are still going through the roof. There is an article on this very site today, 8-7-14, that you are 400 times more likely to die of medical staff mistakes than you are of EBOLA VIRUS. When it comes to health care in the U.S.A., the patient’s needs come LAST and profit comes first. There is always someone more desperate to take the last patient’s place in line for the $2500 MRI that costs the medical facility $250. MRI’s are NOT new, nor are IV image enhancements. The problem goes much deeper…it is systemic. My proof? When was the last time you heard of an insurance company going under? When was the last time you heard of a for profit hospital that went under? If they were close to going under, they were bought up by a larger for profit entity and higher prices were the rule. Doctor’s have to be certified to practice at a hospital. Many hospitals will not certify doctors to practice at that hospital. Why does this condition exist? Doctors should be able to walk into any hospital and perform any procedure that is necessary for the patience well being.
It’s great someone is comparing prices since is it illegal for the providers of the services to share their prices – oh wait – that would be yet another example of the unintended consequences of unreformed government regulation.
We’ve heard that about providers sharing prices, but …. can’t providers hire “practice management” services who will help in billing? I don’t know much about them, but have heard of several. I take it that they consult and develop data/info and then sell it to practitioners. Do you know anything about them? We’re eager to learn!
Fantastic idea. Keep going. The result of all this gaming that has been going on for years is that patients paying out of their own pocket have been royally screwed. Long overdue concept. Best case scenario is that open and fair pricing will evolve.
Open and fair pricing must evolve. This is the last remaining big opaque marketplace. Think what happened to airline ticket sales, real estate sales, car sales when transparency came.
It’s happening here, too.
In all fairness…it’s not just asking the question…it’s also in HOW you ask the question…and how nice you are to the billing people…
Not saying that will necessarily gain you anything…but if you are a billing person, you probably get a lot of crap all day long from patients…
One day I had to have my car towed…and just being nice and caring about the tow truck driver got extra miles and a fee waived…(and no, it is DEFINITELY not because I’m a blonde bombshell or anything like that…I am an archetypal “silicon valley nerd.”…I was just nice, asked questions, tried to be helpful, and cared. It WAS around rush hour as well, as I recall.)
Being nice is a salve which can be applied on a lot of hurting functionaries who have to deal with angry unhappy customers all day long…think of it as a kind of healing you can give THEM…
We are all in this together, and the billing people — and the docs, the hospital administrators, the Big Pharma folks, the insurance phone bank folks — are patients too at some point.
And being nice is, well, nice.
I’m in Florida. Thanks for the kff link. Helpful information!
Paying the bill isn’t the biggest problem. The problem is knowing that you are paying the fair amount for services rendered. As a physician, I know too well that billing seems disjointed and without logical reason, although there is method to the madness.
Clearly, though, there needs to be better billing transparency so that people know that, in the majority of cases anyway, it is not that doctors are greedy. It is a matter of insurance reimbursement why billed amounts are so apparently haphazard.
Totally agree. All the prices should be posted. That way, if somebody wants the $6,000 MRI, he or she can have it. Or the $600 one.
One caveat, though: if someone’s getting a $6,000 MRI, he or she should pay for it — not me, my employer, my insurance company or any other third party!
My daughter needed some dental work. The bill was submitted and some percentage was reimbursed. We received a bill for the remainder. When I asked the administrator for a discount, as any normal person should do when it comes to health care bills, I was told that no discount could be offered as the bill had already been submitted to insurance and “a discount of the remainder wasn’t allowed.” I apologize for not looking up the regulations but I’ve heard that comment twice now from different offices. (The other one was a pediatric cardiologist). I would, however, be interested to know if there is actually such a regulation. Sorry for the lack of definitive evidence on this point.
Our notes crossed on the site. What state are you in? And was this an in-network provider?
I like the notion that any normal person should ask for a discount with health-care bills, Paul! You’re a man after my own heart!
We often suggest that people ask Before The Fact “what will that cost? what will that cost ME” because it tends to be easier to do it before than After The Fact for many reasons (insert gusty sigh).
The billed amount is a game played at the request of insurance companies who reimburse a percentage (typically 1/2) of the billed amount. So in order to stay in business, imaging centers will bill “twice Medicare,” to use typical jargon.
If, however, you are a cash paying customer, and the bill is therefore not submitted to an insurance company, then the “vendor” may (and should) agree to bill cost plus fair profit.
Once the bill is submitted, however, the “patient responsibility” becomes apparent and you are on the hook for the non-reimbursed amount, thanks to insurance fraud regulations. I have personally been hit with this issue with my daughter’s dentist bill. I couldn’t even get a discount on that remainder amount.
I advocate that ALL imaging studies be billed at cost plus fair profit percentage. But until the insurance reimbursement game is under better control, doctors and patients will continue to suffer this massive price gouging confusion.
“insurance fraud regulations. I have personally been hit with this issue with my daughter’s dentist bill. I couldn’t even get a discount on that remainder amount.”
Paul, could you explain this regulation?
Thanks, Paul. I am sorry to hear about your daughter’s dentist bill.
We have heard everything from “I called them and they said I didn’t have to pay” to “they negotiated it after the fact down to a really modest sum” on up to “they insisted on getting the full $6,000 for the stupid MRI.”
I’m with Saurabh Jha on the question about insurance fraud, though. Is this an Office of the Inspector General issue, or an issue of insurance company regs? There are also some state regulations on balance billing that are supposed to protect people; here’s a handy Kaiser scorecard. http://kff.org/private-insurance/state-indicator/state-restriction-against-providers-balance-billing-managed-care-enrollees/
I agree Casey…but when they say they don’t know … you’re up a creek without a paddle.
Which is why I am VERY excited about this initiative.
Walking into urgent care and being required to sign what in essence is a cart blanche responsibility for the costs…without even knowing the vaguest estimates of what those costs might be…
Heck, they don’t even let the people who repair your automobile get away with that!
Why I delight in informing the clinicians I interact with on how to find out “how much” – I was uninsured/self-pay for five years post-cancer. I’m an expert at finding out, and sharing, price information. Jeanne and I are colleagues in this effort, so I always hit up her database as part of my hunt for an answer, and I advise all – patients or clinicians – to do the same. Knowledge is power, get some. That’s my philosophy =)
Man, I love this idea, Jeanne.
Couple of questions for you. What’s to stop somebody from gaming the system? You touch on this in your essay but would be very interested in what steps you’re taking to validate the data you’re collecting?
As you grow I imagine this will problem, as it has with many of the review sites. That’s not to say this isn’t a good idea: I’m all for it: just thinking this is a built in issue you’ll have to look at
Number two: would love to see a infographic highlighting the range of options you’ve found!
Validating: Heck, we’re journalists. We care deeply about good data.
At clearhealthcosts, we have been collecting cash or self-pay prices on 30-35 common procedures for about 3 years now, in 7 metro areas. We use those as context for what our community members share. So: We put our hand-collected survey prices in the database first, in both SF and LA areas: that’s the data that you can see that doesn’t have the “crowdsourced” flag. (We have 4 MRI’s in our standard survey.)
We are also asking community members who share to give us email addresses, so we can back-check. Some info we have corrected, as in misplaced decimals and suchlike.
So far we don’t see much gaming of the system: we’ve been at this for a while now, and we think the people who want to fix the problem far outnumber those who want to game the system. If we find someone gaming, we’ll name and shame.
Infographic: we’re working on that. Some of the preliminary results from our WNYC pilot project in 2013 can be found here; this blog post links to others in the pilot series, with an idea of what infographics we hope to replicate with #PriceCheck.
Thanks for shining the light! Finally people can have a sense of what prices are in the ballpark and the information they need to shop around.
Thanks! We’re excited to be able to not just point at the problem of pricing disparities, but also to give people something they can do about it:
–share your prices in our database
–ask questions about prices
–be aware of how the market works, and feel empowered to take actions
This is why I’ve been saying for a couple of years now that, as part of every single medical encounter, people-commonly-called-patients MUST ask “how much is that?” before making any decisions about treatment with their care team. Really. It’s only when we, the end users, start grabbing the reins that the system will shift. So … TAKE BACK THE BILLS. Just like Jeanne said.
Thank you so much. Transparency warriors, come on over!
I tried like heck to get a price on a colonoscopy before having the procedure, thought I had it all nailed down. Then in a conversation the day after, I was told something different–that the price I was quoted did NOT include the facility and that there would be a separate fee. (But that the taking of the biopsy would be bundled as a single colonoscopy with biopsy fee, whereas before I had been told it would be colonoscopy + colonoscopy with biopsy.)
Now what’s really interesting here is that they were not being greedy or trying to screw me–this turned out to be an extremely competitive provider. What they billed the insurance for the procedure was not quite $700. What they billed separately for the facility was $0, for the anesthesia $0. So <$700 total to the gastro, + $130 to the pathologist.
And what I had to pay turned out to be $0, instead of 40%. So, right now, even a well-inentioned, competitive provider who really should be bragging loudly about their prices, cannot give a straight answer.
Interesting story. Where do you live? Our California price range is from $1,200 to $7,800 charged, and payments from $593 total to $7,800 total.
1. was it a regular preventive colonoscopy? Those are supposed to be 100 percent covered under the ACA (though we are learning that they are not always — quite often people are asked to pay a portion as deductible or co-insurance). If it was preventive, why were they telling you you need to pay 40 percent?
2. I have a friend who’s a competitively priced provider. His group feels that they’re being shut out of the ACO market because they never inflated prices — unlike their high-priced competitors up the road, who, in his view, are fully engaged in reaping ACO benefits because they are shaving back their bloated prices.
So i wonder: are other competitively priced providers feeling left out in the cold?
Interesting story. Where do you live? Our California price range is from $1,200 to $7,800 charged, and payments from $593 total to $7,800 total.
I live in Colorado, the provider is in Denver.
“1. was it a regular preventive colonoscopy? Those are supposed to be 100 percent covered under the ACA (though we are learning that they are not always — quite often people are asked to pay a portion as deductible or co-insurance). If it was preventive, why were they telling you you need to pay 40 percent?”
They told me BEFORE that it would be 40 percent, and then after I was billed nothing. So although they made a mistake, it was not of the nature of springing unanticipated charges on me after the fact. It was a regular colonoscopy, they snipped a polyp for biopsy, and it wound up being covered 100%. So my insurer did not try the “oops, it’s not preventive anymore, now it’s diagnostic” crap 😉 And, FYI, he billed $696 and was paid $590.29. The pathologist billed $311 and was paid $130.
“2. I have a friend who’s a competitively priced provider. His group feels that they’re being shut out of the ACO market because they never inflated prices — unlike their high-priced competitors up the road, who, in his view, are fully engaged in reaping ACO benefits because they are shaving back their bloated prices.”
I have no gastro issues, no reason to see one other than the “you’re 50 have a colonoscopy” standard screening. So I have no idea whether his practice is thriving with referrals because of his fair pricing, or if he’s being squeezed by some peculiarity of the market.
When you say ACO, are you referencing Accountable Care Org? ‘Cause that’s more about coordinated care for Medicare beneficiaries. If you’re talking ACA Marketplace insurance plans, then you’re talking coverage ins’n’outs.
I used to think the military and broadcast engineering was addicted to acronyms. Then I started covering healthcare and getting involved in healthcare policy, and realized that the medicos win the acronym game hands down. HIE, HIT, EMR, HITECH, ICD-10, HL7, E I E I O.
Yes, Casey, ACO: They looked at the requirements and rewards for forming an Accountable Care Organization in their practice.
The reward for being proven accountable is that you get to share in cost savings.
Their costs are so low, my friend said, that the added requirements of proving their accountability would swallow any rewards they could produce from cost savings.
What a cluster, forgive my French.
And how refreshing it is to see ordinary citizens achieving what regulators and government failed to achieve.
Thank you so much! It’s like the “Take Back the Night” movement among women — only this time, it’s “Take Back the Bills.”
Yes but for every success story there are a hundred failures. People too sick to “shop around”, too poor to pay even $500, too overburdened by previous medical bills, too overwhelmed by grief, disappointment, pain and the endless hoops one must jump through. Every citizen should have demanded of their elected gov’t. representatives single payer health insurance. There was a 70% public approval but Harry Reid, Republican thugs and the insurance industry (Aetna took the lead) lobbied just hours before the bill was voted on. Guess who won? Well, it wasn’t the patient or you!
There are a hundred failures, but even though the law is deeply flawed, it’s really moved the ball quite a bit. Also, given gridlock in Washington, single-payer would never have passed. Do you agree?
And, irony of ironies: a friend who’s a health economist says that some European nations with variations of single-payer are looking to private enterprise to save them from the effects of rising health costs on their government health outlays. He says they don’t want to believe that private enterprise can be pernicious in this regard. Yikes.