How much for a colonoscopy? New price transparency laws in Texas and Tennessee

Recently enacted laws in Texas and Tennessee are giving consumers greater transparency into health-care billing.

The Texas law, which took effect this fall, requires hospitals to provide an itemized bill to patients when billing for medical services. When requesting payment from patients after health-care services are provided, hospitals must:

• Provide the patient with an itemized bill, in either paper or electronic format, of the cost of each service and supplies used during the visit to the provider;
• Submit the itemized bill to the patient no later than 30 days after the provider receives a final payment from insurance carriers for the provided service or supply;
• Include a plain-language description of each distinct health-care service or supply that the provider provided to the patient;
• Include any charges and billing codes submitted to a third party and the corresponding reimbursement from that third party; and
• Calculate the amount due from the patient for each service and supply provided.

The legislation also entitles patients to obtain an updated itemized bill from the provider upon request at any time. Providers will not be permitted to pursue debt collection against a patient for a provided service and or supply unless they have complied with the legislation’s provisions.

The Texas Hospital Association, which opposed the legislation because of its anticipated costs, said it has been working to provide guidance to its members. “Hospitals want to provide the best care and the best information possible for patients,” the association’s Carrie Williams said. “Transparency is everyone’s best interest, and Texas hospitals are fully engaged to ensure their patients have everything they need.”

Under the Tennessee law, which took effect last summer, if a patient negotiates a lower price for a service covered by their insurance, and if the negotiated price is less than the average amount paid by their plan, the patient can submit a receipt to their insurer. The insurer “shall count the full amount that the covered person paid out of pocket toward the covered person’s deductible, coinsurance copayment or other cost-sharing amount.” In short, a patient is free to use any provider that offers more affordable care, and their insurance company cannot discriminate against them for doing so.

An investigation by Forbes magazine found that Nashville residents could pay $541 in cash for a colonoscopy, far less than the $2,400 average rate the three largest insurers in the state negotiated.

Related: Consumers cite affordability as biggest issue when paying health care bills

“In fact, we found at least four providers in downtown Nashville that would charge less if we paid cash instead of using our insurance card,” the report said. “In other words, many Americans are often overpaying for services when they use their insurance. Under this new state law, people are free to access the $541 option and not be penalized by their insurer for going out of network.”

Meanwhile, as states are taking the lead, hospital compliance with federal transparency laws continues to lag, according to recent reports.