New laws should help consumers find out what they’ll pay for healthcare services, but many available tools are still works in progress.

Because our researchers consistently find huge price differences from company to company for the exact same products and services, we constantly urge you to shop around. But with medical care, it’s nearly impossible to identify lower-cost providers that might save you money.

Medical costs should become more transparent due to new federal regulations and laws that provide hospital patients with price protections, and require facilities and private health insurance plans to disclose fees. (Since, after meeting their annual deductible, Medicare beneficiaries don’t pay additional medical costs, many of these new rules and protections don’t directly affect them.)

It’s about time. Since 2003, traditional health plans sponsored by large employers have shifted more of the cost-sharing burden to policyholders through higher deductibles and other coinsurance obligations. This may alleviate skyrocketing healthcare costs if patients seek out low-priced providers, but consumers have seldom been given any tools to do that shopping—or even a way to find out in advance what they’d get charged for their care.

Despite the new laws, healthcare price tools currently available to patients are still works in progress. Many we checked were clunky, glitchy, and not very useful. Still, some were promising, and the avalanche of medical service price data becoming available to consumers, analysts, and digital entrepreneurs is powerful info—meaning price-comparison tools should improve and greatly help consumers.

Elimination of Surprise Medical Bills for Emergency Care

On January 1, 2022, the No Surprises Act became law, providing critical protections for patients when they seek emergency medical care. For those covered by group and individual health insurance plans, the law eliminated the potential nightmare of thousands of dollars in unexpected medical bills from out-of-network providers.

Patients usually select providers that participate in their health insurers’ networks. That’s because those doctors, hospitals, and other in-network providers have typically agreed to charge lower rates to the insurance plan and its members, usually resulting in lower out-of-pocket costs for patients compared to out-of-network providers. After your copay, annual deductible, and other cost-sharing obligations are met, insurance pays the rest of the bill—but if you use an out-of-network provider that charges more than the plan is willing to pay, you’ll have to cough up the remaining balance.

It’s especially important that consumers are protected from huge fees when they use hospital emergency departments or urgent care facilities. In these situations, you can’t shop around to obtain price quotes from several ERs.

Before the No Surprises Act went into effect, many patients got hit with big bills, even after using emergency rooms at hospitals that participate in their insurers’ networks. The hospital might be in your plan, but its anesthesiologists, radiologists, pathologists, and other physicians may not be. As a result, consumers were often charged thousands more for care.

In these cases, payments made by patients’ insurers covered only part of the out-of-network providers’ tabs. Consumers had to pay the remaining balances, a practice called “balance billing.” According to the Centers for Medicare & Medicaid Services (CMS), these surprise charges can often be 10 times higher than the typical anticipated bill.

These surprise medical bills weren’t uncommon. From 2010 through 2016, almost 40 percent of emergency room visits at in-network hospitals produced out-of-network bills, according to a study published in Journal of the American Medical Association (JAMA) in 2019. Another study published in JAMA found that from 2012 to 2017, 20 percent of patients who had seven common surgeries by in-network surgeons at in-network facilities were billed by other out-of-network clinicians.

The No Surprises Act largely bans this type of balance billing. Most out-of-network providers can no longer charge more than stipulated under facilities’ in-network cost-sharing agreements. In addition to most emergency care, the Act covers nonemergency care in hospitals, hospital outpatient departments, and ambulatory surgery centers if they participate in your insurance plan’s network, plus air ambulances. (The Act does not cover bills from ground ambulance services.)

The law also gives uninsured patients the right to Good Faith Estimates (GFEs) of costs before they receive care.

Hospitals Are Now Required to Disclose Pricing

Starting on January 1, 2021, the CMS Hospital Price Transparency rule requires hospitals to provide consumer-friendly online price tools showing charges for at least 300 “shoppable” nonemergency services that can be scheduled in advance. Although hospitals could decide which of 230 services to include, the remaining 70 were specified by CMS and include procedures such as hip or knee joint replacement without complications, routine obstetric care for cesarean or vaginal delivery, and surgical removal of the prostate and surrounding lymph nodes with an endoscope. Hospitals were also required to post online computer-readable files listing their prices for all items, services, and service packages they offer.

Lawmakers hoped this would provide the public with easy-to-access price info for most common procedures. These tools might help rein in rising medical costs by empowering consumers and employers to compare costs between specific providers before receiving care and, in turn, put downward pressure on health care prices and encourage providers to compete on price and quality.

Because byzantine billing schemes have created myriad possible prices for the same item or service, the rule requires each hospital to disclose its “standard” gross charge (the hospital’s “list” price, which few if any insurers or patients pay); discounted cash price (what uninsured patients usually pay); payer-specific negotiated charges (prices various insurers have agreed to pay); and minimum and maximum negotiated charges (the lowest and highest negotiated rates).

But so far the rollout has been a mixed bag.

“We saw mass noncompliance,” said James Gelfand, executive vice president of public affairs for the ERISA Industry Committee (ERIC), which represents large employers on benefit issues.

Last year employers and other transparency advocates pushed CMS to impose higher penalties for noncompliance, and in November the Biden Administration raised the maximum annual penalty from about $110,000 to more than $1.2 million. Gelfand said that is pushing more hospitals toward compliance, but problems persist.

“The presentation of information is not standardized. Shoppers at some hospitals may have to look at an Excel spreadsheet with a series of numbers and procedure codes, and it’s not always clear what you’re looking at,” said Krutika Amin, associate director at the Kaiser Family Foundation (KFF).

Checkbook also found that cost estimates seldom include doctor fees—the rule doesn’t require them if they’re not employed by the hospital—but sometimes they do.

“The American Hospital Association [AHA] supports price transparency and believes patients deserve the best possible information about what they should expect to pay for a scheduled service,” said Ariel Levin, AHA’s director of coverage policy, without addressing our findings. “Hospitals and health systems are working to help patients access useful information about their costs, including through the use of price estimators and other tools.”

We have not yet done an extensive analysis of local hospitals’ consumer tools. But our test drives of several found considerable room for improvement.

For example, when we searched the M Health Fairview University of Minnesota Medical Center’s price estimator for its negotiated prices for a total knee replacement, we found its tool wanting. It was difficult to find, requiring clicking and scrolling through multiple pages before we could type “knee replacement” into the search field.

That let us price out “Arthroplasty, total knee replacement, inpatient, hospital,” with the Current Procedural Terminology (CPT) code 27447 used in medical billing.

Our specific insurance plan wasn’t listed, so we sought pricing for a generic Blue Cross and Blue Shield plan, entered our details, and the site spit out $60,389 in hospital charges and $4,319 in physician fees. It told us our insurance would cover almost all of that, except for our $900 copay.

We called the helpline listed online for a more accurate estimate. The customer service agent gave us significantly different costs for the knee replacement directly from our specific insurance plan: $33,060 in hospital charges and $3,842 in surgeon fees. Again, the insurer would pay most of the bill, but our out-of-pocket was smaller, only $410.

Why the difference? “The online tool isn’t really taking some of our contractual adjustments into account because those are not public-facing,” the agent explained.

The CMS transparency rule also sought to provide employers and health insurance plans with info on real-world pricing.

“When a hospital has humongous list prices, it negotiates what looks like lower prices with the insurance companies. The insurers know the list price is nonsense, but they tell the employer and member that price is real and that they negotiated 50 to 60 percent off the list price,” Gelfand said.

The CMS transparency rule also sought to provide employers and health insurance plans with info on real-world pricing.

“When a hospital has humongous list prices, it negotiates what looks like lower prices with the insurance companies. The insurers know the list price is nonsense, but they tell the employer and member that price is real and that they negotiated 50 to 60 percent off the list price,” Gelfand said.

The new rule should enable employers to compare what various insurance plans are paying for medical services to see which plans are paying a lot more than others for the same services.

“It’s not Joe Employee who will reduce healthcare prices by shopping at the point of purchase for medical services, it is giant companies that insure hundreds of thousands of employees who will do that on the front end of the insurance purchase,” said Gelfand.

Insurance Plans Soon Will Be Required to Offer Cost Estimators

The CMS Transparency in Coverage Rule requires that health insurers eventually make available to the public detailed pricing information for all covered in-network services and procedures. By July 1, 2022, computer-readable files must be available to consumers, researchers, and third-party app developers. By 2023, plans must have online tools that let policyholders see their personalized out-of-pocket costs and the underlying prices for 500 shoppable covered items and services. And by 2024, these web tools must expand to include all covered items and services.

According to America’s Health Insurance Plans (AHIP), a trade association, “77 percent of commercial health plans already make a cost calculator tool available to their policyholders, which checks most of the boxes required for the new rule.” According to Kelley Schultz, AHIP’s executive director of commercial policy, “One hundred million covered lives already have access to this information, and it’s important for consumers to know these tools are available and how to use them.”

We found some plans already have tools sharing useful price intel with their members. For example, we checked the tool offered by CareFirst, a Blue Cross and Blue Shield company that provides coverage to Checkbook staff, for “knee” and quickly found a section for total knee replacement surgery.

The website then produced a list of four in-network hospitals within a 25-mile radius of downtown Minneapolis, ranked by default from lowest- to highest-cost, and an estimate of our maximum cost for each: $900 for the copay and remaining annual deductible.

Abbott Northwestern Hospital wasn’t among the top CareFirst results. When we checked on it, the tool gave us an estimated cost of $38,079 (but, again, our cost would remain $900, with the insurance company picking up the rest).

While looking at Abbot’s profile, we got a popup window that requested, “Help us save on your knee replacement [and]…help control healthcare costs for everyone,” and pointed us to two hospitals where CareFirst could save $2,500 to nearly $5,000. It reported that M Health Fairview Ridges would charge the plan only $33,163, and Mercy Hospital would charge $35,546.

CareFirst’s tool also includes some quality measures. For example, it reported that Abbott and Mercy have earned The Joint Commission’s Gold Seal of Approval, and that all three hospitals have earned the insurer’s Blue Distinction Specialty Care recognition for excellence in delivering safe and effective treatment for knee and hip replacement.

So, overall, CareFirst’s tool gave us helpful information to maybe prefer a lower-cost (from the insurer’s perspective), high-quality choice.

We also sat for a demonstration of the tool offered by Blue Cross and Blue Shield of Illinois, which has been providing information on costs to its members since 2010, when it launched a price-comparison website.

Its tool provided similar info to that of CareFirst, but it further encouraged cost-cutting by offering up to $750 as a reward when policyholders use low-cost providers.

“In any other industry, when you shop for value, you get that value,” said Rania Bollegar, senior director of product solutions at Health Care Service Corp., which operates the plans for Blue Cross and Blue Shield of Illinois, Montana, New Mexico, Oklahoma, and Texas. “But when you shop for healthcare, you may or may not realize a portion of the claim savings. We pay benefits exactly as structured, but then, separately, we reward policyholders who help us save.”

Creating a Path for Useful Price Comparison Tools

The wealth of price information liberated by new laws and regulations is spawning websites to analyze these data and provide price estimates. Several already promise to provide cost comparisons. But, like the hospitals’ websites and those offered by some insurance plans, we found these companies don’t yet provide consumers with much actionable info.

For example, we signed up for a HealthcarePriceTool.com subscription, for $9 a month. The site said it collects prices from insurance claims data and therefore obtains the actual costs that insurers and real patients were billed by each provider. The website claimed it aggregates the prices of more than a million doctors, hospitals, and other providers around the U.S., and presents the average price charged by each provider for each procedure.

When we searched the tool for knee replacement surgery, it produced a sortable list of 18 Twin Cities area hospitals, with prices ranging from $26,763 (Park Nicollet Methodist Hospital) to $58,341 (Hennepin County Medical Center).

These prices represent only the average out-of-network fees paid by those without insurance and are of little practical use to the vast majority of consumers with private health insurance.

We also tried out another web tool offered by Turquoise Health, which said it gets prices from disclosures required by CMS.

Our search for knee replacement surgery turned up 20 providers within 25 miles of downtown Minneapolis, but didn’t have any negotiated rates for our insurer. It did provide cash prices for five hospitals, ranging from $18,327 to $48,697. Turquoise said it didn’t list information for four hospitals because it couldn’t find their data or the hospital didn’t comply with CMS’ publication requirements.

Turquoise also provided cash prices for three other hospitals, ranging from $23,530 to $36,156. And it listed six other facilities but didn’t have cash prices or our insurers’ rates for them. Turquoise said it didn’t list information for 18 other hospitals because it couldn’t find their data, or the hospital didn’t comply with CMS’ publication requirements.

Some states—including Colorado, Maryland, Massachusetts, New Hampshire, and Washington—are also offering consumers online healthcare cost estimate tools for common shoppable treatments.

For example, the Maryland Health Care Commission website reports hospitals’ costs of 322 inpatient medical conditions, based on actual claims data that health insurers in the state must provide the government.

We looked for info on knee replacement, and it reported the lowest-cost among 40 hospitals in the state was Doctors Community Medical Center, with an average charge per case of $21,835, and the most expensive was University of Maryland Medical Center, at $124,619. Neither turned up in our searches using HealthcarePriceTool.com or Turquoise Health’s comparison tool.

Maryland operates a second website, WearTheCost.org, that posts cost comparisons and quality indicators for 13 different episodes of service.

Although we greatly appreciate Maryland’s effort, and look forward to further innovation from it, like so many other online healthcare cost tools its websites are not quite there yet. Both sites report only what insurance companies pay, not patients’ significantly lower out-of-pocket costs. “This tool provides a gauge of what costs you can expect,” says Ben Steffen, executive director of the Maryland Health Care Commission. “We think this helps, but it’s not a perfect tool. We recognize that.”

Fortunately, we think existing tools will continue to improve especially as insurance plans comply with new rules, allowing healthcare advocates and others use newly available data to invent comparison tools. We’ll keep you posted as that happens.