Most states flunk pricing transparency test

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Only two states received a grade of A for having laws that advance transparency of healthcare pricing. More than half the states in the union earned an F for failing to ensure consumers have access to pricing information.

The Health Care Incentives Improvement Institute and Catalyst for Payment Reform collaborated on the report "Report Card on State Price Transparency Laws". For the analysis, they reviewed state-specific laws that addressed the transparency of healthcare prices.

Based on their review, they identified varying levels of price information and of access to that information. Price transparency fell into one of four categories: information reported to the state; information made available upon request of a consumer; information in a public report; and information posted on a public website. For scoring criteria, they looked at scope of the price (charges, average charge, amount paid by the insurer, etc.); and the scope of providers affected by the law (hospitals, physicians and surgical centers).

They devised a scoring system based on points for price transparency and the scope of the price, services and providers, and then evaluated each state law. Each level was scored separately and then added for a total score that could not exceed 100.

“Within each of the four levels of transparency, we allocated higher points to the broadest scope of price, services and providers,” the authors wrote. “For instance, releasing information specific to both what was paid for a service and what was charged for that service is more meaningful than only releasing what was charged. … Similarly, releasing pricing information for all inpatient and outpatient services and for all hospitals and providers, rather than just the most common services or a subset of providers, is more meaningful to the consumer.”

States were graded on a curve and assigned a letter grade: A for 60 to 100 percent; B for 50-59 percent; C for 40-49 percent; D for 30 to 39 percent; and F for 0 to 29 percent.

Only Massachusetts and New Hampshire received an A. B states included Colorado, Maine, Minnesota, Virginia and Wisconsin; C states were Illinois, Iowa, Kentucky, South Dakota, Nevada, Utah and Vermont; D states were Florida, Louisiana, Ohio, Texas and West Virginia; and all other states scored an F.