An Extra Measure of Confusion for the No Surprises Act and Price Transparency Regulations

Given that they share similar names and themes, it is easy to conflate Price Transparency and the No Surprises Act, but while they are both significant federal provisions that attempt to help consumers understand healthcare pricing, they are quite different.

I fear that an Executive Order dated Feb. 25 may augment that confusion.

First, I want to be clear that while I have sniped at some of the details of both the No Surprises Act and the Price Transparency provision, I wholeheartedly endorse the concept of improving the clarity of medical pricing. I don’t believe pricing constitutes the industry’s shining moment.

But I also understand how confusing the provisions can be, and I worry that this Executive Order will add to the problem. After discussing Price Transparency at some length, the Order says that it will “require the disclosure of the actual prices of items and services, not estimates.” But the Price Transparency provisions already require actual prices and not estimates. Estimates are found in the No Surprises Act.

Let me try to explain the differences.

Price Transparency only applies to hospitals. At the risk of oversimplifying things a bit, it imposes two basic requirements. First, for all services, each hospital has to create machine-readable files that essentially list every negotiated charge with every third-party payer for the service.

Each hospital also must specifically identify the highest and lowest charge. The second requirement is that hospitals create a user-friendly, public-facing list on their websites of shoppable services that are available.

Both requirements specifically use the word “charge.” The machine-readable file and the website are to list your charge. To the best of my knowledge, the word “estimate” doesn’t appear in any Price Transparency discussion.

If you’re thinking about all of the discussion we have had about good-faith estimates, that is part of the No Surprises Act. Good-faith estimates may make pricing more “transparent,” but they are not part of the Price Transparency Act.

The No Surprises Act is arguably more complicated than Price Transparency, because it applies in many different settings and circumstances. First, it applies to all emergency care provided at hospitals and via ground ambulance. It also applies when a patient goes to an in-network hospital, emergency department (ED), or ambulatory surgical center (ASC) but receives care from an out-of-network medical professional. Finally, it also creates a duty to provide good-faith estimates at a long list of facilities and professionals that probably include almost all of our readers.

One of my frustrations with the provision is that it defines the word “facilities” differently for the two requirements. The limits on out-of-network professionals only apply to hospitals, freestanding EDs, and ASCs, while the good-faith estimates apply nearly universally to hospitals, labs, imaging centers, and probably to skilled nursing facilities (SNFs).

In each case, the rule refers to the covered parties as “facilities.” They all must give estimates to people who are not using insurance to pay for their care. And in the future, they will have to provide estimates to everyone.  So, it is the No Surprises Act, not Price Transparency, that calls for estimates. Is the Executive Order conflating two different provisions? I’m not sure, but it seems like it is. Hospitals need to be sure that they are providing information about their charges to meet the Price Transparency requirements.