A call for fair hospital billing

Published September 29, 2023
David Merritt

Author: David Merritt

Too many families and businesses continue to struggle with rising health care costs, from the patient who can’t afford their medication...to the employee who struggles to pay for a trip to the doctor...to the business that can’t hire more workers. We need real solutions that deliver real affordability. That’s why Blue Cross and Blue Shield companies are working hard to advance commonsense solutions that can improve care and lower costs. We’re committed to tackling the key drivers of rising costs — one of the biggest drivers being hospital billing. Because as hospital prices rise, consumers pay more.

The problem

For years, we’ve seen a growing trend of corporate hospital systems taking over independent doctors’ offices. Often after the hospital takes control, what was a doctor’s office is now called a hospital outpatient center. And with the name change, the hospital can charge higher rates. That means when a big hospital system buys up a physician practice, patients can receive the same care in the same room from the same doctor – but at much higher prices, on average a 14% increase.

The result? Higher hospital prices mean higher premiums for consumers and higher out-of-pocket costs for patients. A national analysis of tens of millions of actual claims shows the costs for common, everyday procedures, like mammograms or colonoscopies, were in some cases, more than twice as much as when they were performed in a doctor’s office. These higher hospital prices mean higher costs to consumers.

The solution

No patient should pay more for a service simply because the facility is now owned by a hospital. Bipartisan lawmakers in Congress agree. The Site-based Invoicing and Transparency Enhancement (SITE) Act, introduced by Sens. Maggie Hassan (D-NH) and Mike Braun (R-IN), would crack down on hospital outpatient departments charging patients more while masquerading as physician offices. Some health systems — but certainly not all — use a loophole in the law to do this. The SITE Act aims to eliminate that exemption, which our analysis shows could save Americans nearly $500 billion over the next decade.

Additionally, the Facilitating Accountability in Reimbursements (FAIR) Act, introduced by Reps. Kevin Hern (R-OK) and Annie Kuster (D-NH), would require hospitals’ billing and claims forms to accurately reflect where a patient’s care was delivered — not just where the reimbursement rate is higher. This clarity will help insurers apply the correct payment rate and patient cost-sharing. This commonsense solution prioritizes patients by promoting fair and transparent billing. No one should pay more for health care because a hospital is gaming the system. The Blue Cross Blue Shield Association supports these important bills so that Americans can receive the high-quality health care they deserve at a cost they can afford.

We look forward to working with Congress to pass these bipartisan solutions as a critical step toward making health care more affordable for patients, businesses and taxpayers.

The Blue Cross and Blue Shield Association is an association of independently owned and operated Blue Cross and Blue Shield companies. Read more about how BCBS companies are promoting affordable health care.