When the Affordable Care Act (ACA or “Obamacare”) was enacted in 2010, one of its major provisions was requiring hospitals to “make public in accordance with guidelines developed by the Secretary [of the Department of Health and Human Services] a list of the hospital’s standard charges for items and services provided by the hospital” and to update this list annually. While a few hospitals started to reveal some of their charges, the vast majority waited for the “Secretary” to publish those guidelines. It took 11 years of negotiation with the health-care industry, a lawsuit and numerous changes, but finally as of January 1, 2021, all US hospitals are required to make available online or upon request a list of at least 300 common services provided by the hospital and the price of those services.

Hospital price transparency has been a boiling issue for decades. Studies have found there often is a wide disparity in one hospital’s charges for a procedure versus another’s, even just blocks away from one another. In addition, health ­insurance companies have been able to negotiate enormous discounts off what a hospital claims are its actual costs. The more patients an insurer sends to a hospital, the bigger the discount. Plus, Medicare and Medicaid generally pay substantially less than even private health insurers. But virtually none of those prices or discounts has been made public.

What you will find: Hospitals are now required to publish five different charges for each service—what they claim is the actual cost, the discount they give to cash customers, payer-specific negotiated charges (such as the price they charge to each specific insurer including Medicare and Medicaid) along with the lowest negotiated and the highest negotiated deals they have struck with a third-party payer. If that sounds confusing, it is! And to make matters worse, there is no mandatory/­standardized format in which prices are published. Each hospital can present the information in its own way. So the usefulness, at least for now, is minimal for most consumers.

However, if you are seeking a hospital service that is not covered by insurance (such as most cosmetic surgery), the cash-discount entry for services needed gives you a point to start negotiating. Or if you have a high-deductible health insurance ­policy, knowing what your insurer’s discount is will help you gauge your portion of the bill. For the time being, the most useful benefit of this price transparency structure is the pressure it puts on hospitals to rein in their prices.

What you will not find: Unless the doctor who is performing a procedure is employed by the hospital, that fee will not be listed. And freestanding out-
patient surgical centers are not covered by the transparency rules. Since outpatient surgery is more common than inpatient procedures and many are done at freestanding facilities—even if owned by a hospital—you may not find cost data.

Better strategy: In anticipation of these new rules, many hospitals have started giving estimates of the cost of a procedure you are considering or scheduled to have. Smart strategy: Contact the hospital, and request an estimate, based on what you need and what type of insurance coverage you may have. If you seek the same information from more than one hospital, you may be able to negotiate all or specific charges, such as recovery room fees, inpatient physical therapy charges and even physician fees if the doctor is employed by that hospital.