Revealing secrets: Find out a raft of health-care prices in Texas

Filed Under: Costs, Health plans, Patients

Texas health cost price list

Texas health cost price list

CHCTexasPricingTool2

SUMMARY: Online health-cost pricing tools pop up every day, a reflection of the changing marketplace, and the way transparency in costs is rolling over the industry like an irresistible force. Some are better than others. We were interested, then, to see this Texas pricing tool.

 

 


The tool reflects average billed charge, average contracted rate and average rate paid to the provider for hundreds of common procedures, both in-network and out of network.

The Texas Department of Insurance created this, and it’s pretty impressive. It’s built on 2012 data.

These prices are not attached to the names of providers. Also, they are averages. But they might be quite useful — for example, an uninsured patient or an out-of-network patient can get an idea of rates.

Other states have tools as well. Minnesota has a good search tool, covering mostly hospitals. The New Hampshire one was pretty good, but as of January 2014 it has a note that data collection failures have made updating impossible. {Update: It’s now back up and running, as of July 2014.) Maine has one but it’s kind of limited. [Update: It sometimes delivers error messages, as of July 2014.]

For one of our common procedures, the MRI of the lower back without contrast, we were interested to see Dallas rates, so we searched and got not just Dallas rates but also statewide rates.

In network

Dallas: Charged, $2,129; contracted $630.28; paid $266.01.

Statewide: Charged, $2007.55;  contracted $625.59; paid $265.51.

 

Out of network

Dallas: charged, $3,471.00; allowed amount, $1,226.82; paid, $405.98

Statewide: Charged, $3,586.48; allowed amount, $1,249.73; paid, $468.07.

In some ways this confirms what we all know from our insurance bills: The charges are really high, the payments from the insurance company or government are low.

The people who pay the full freight? The uninsured  and ill-informed – or just plain average people who assume the price charged for a procedure is what they should pay.

What our surveys found, or, the missing $2,000

We have done a lot of price surveying at clearhealthcosts.com, so we were interested to compare our data with theirs.

For example, in our Texas survey, we collected cash prices as low as $325 and as high as $2,432 for that same MRI.

In Houston, Medicare pays $433; in Dallas, it pays $438.

Why some providers accept $325 is obvious: it’s higher than the average in-network rate from the insurance company. That’s lower than the Medicare rate, though — so listen up the next time you hear someone complaining that the Medicare rate is the lowest rate in the marketplace. It’s not.

Who’s paying the cash price of $2,432? People who don’t know that they can get a better price.

What is the extra value of paying $2,000 more for your MRI? Well, we’re interested to hear why that MRI is $2,000 better.

Our data also differs from the state data in that we name the providers and give you contact information.

The Texas data also confirms what we already knew: our survey prices of cash or self-pay rates pretty much mirror the range of paid and charged prices for a procedure.

Why does this matter?

It matters  for a lot of reasons.

“The floodgates of health data are starting to open, even in some unexpected places,” said Robert I. Field, an expert on health-care business and policy, is a professor of law and public health at Drexel University and author of the recent book “Mother of Invention: How the Government Created ‘Free-Market’ Health Care.  “This is good news for all of us as health care consumers.  Knowledge is power.”

The Frequently Asked Questions page  has a few important points:

“How should I use this guide?

“There are lots of ways this guide might help you make decisions about medical procedures and insurance.

  • An uninsured consumer may be able to get an idea of the cost of services before having a procedure done, and may even opt to have it in a different region, depending on the difference in costs.
  • An uninsured person may use the average amounts as a baseline to shop among providers.
  • An uninsured consumer may also be able to get an idea of how far down the providers come from the billed amount by looking at the difference between the billed, contracted, and paid amounts. An uninsured person may then be able to negotiate a lower amount to pay with the provider, similar to the way that insurance companies negotiate lower rates.
  • A patient with insurance may be able to determine an estimated coinsurance amount.

“Why was this guide created?

“This consumer information guide is the result of Senate Bill 1731, 80th Legislative Session. The idea behind the bill was that cost transparency would reduce costs for consumers. The law requires the Texas Department of Insurance (TDI) to collect data from health plans to determine how much they pay doctors and hospitals for specific medical services. It also requires TDI to combine all responses and present summary information based on the 11 Health and Human Services regions in Texas. This guide currently contains 2012 reimbursement rate data, and TDI will update this information annually.”

The part about “allowed amounts” for out-of-network providers is particularly interesting: to see how much going out of network and billing at a higher rate can benefit a provider, and how it can punish a patient.

Contracted rate:

“The average dollar amount health plans agree to pay to in-network providers as reimbursement for a specific procedure or service. This amount only applies to in-network claims, and it is usually established by contract between health plans and providers. This amount includes the patient’s cost-sharing requirements, and it is presented on a per-claim basis.”

Allowed amount:

“The average maximum amount health plans will consider for payment to out-of-network providers as reimbursement for a specific procedure or service. Since no provider contract is in place, the health plan determines how much it is willing to pay based on an internal formula. The provider may ‘balance bill’ the patient for the difference between the provider’s billed charges and the amount paid by the health plan.”

How and why did Texas collect this information?

Jonathan Hortman, from the Texas Department of Insurance, wrote by e-mail that the state’s authority to collect it comes “from Texas Insurance Code Chapter 38, Subchapter H, which is available at http://www.statutes.legis.state.tx.us/Docs/IN/htm/IN.38.htm#H.  Our collection rules are found in 28 Texas Administrative Code, Chapter 21, Subchapter KK, which is available at http://info.sos.state.tx.us/pls/pub/readtac$ext.ViewTAC?tac_view=5&ti=28&pt=1&ch=21&sch=KK&rl=Y.”

He added,  “the web page dedicated to this data collection effort is probably the best resource for getting an idea of what we collect and how we collect it.  You can visit this page at http://www.tdi.texas.gov/health/reimbursement.html.”

Why pay an extra $2,000 for an MRI? Good question.