Outcome Is Unclear for Legislature’s Transparency Push

March 7, 2018
Health Care Costs
Legislation and Policy

The first of a handful of bills this session attempting to remove the mystery around health care — and perhaps some of the cost in the process — is showing strong momentum.

Senate Bill 146, which requires freestanding emergency departments to give written notices to customers about the costs of procedures and their rights as health care consumers, sailed through the Senate and has been assigned to the House Health, Insurance & Environment Committee. Similar efforts have failed every session since 2014.

Supporters say this bill could lower confusion among patients, especially those who may think they are at a less-expensive urgent care clinic, while helping them avoid unexpectedly high bills. Representatives from the American College of Emergency Physicians and the National Association of Freestanding Emergency Centers testified against it. The Colorado Hospital Association testified that some of the reporting requirements would be duplicative.

Colorado is a national leader in the number of freestanding emergency departments. Under this bill, freestanding emergency departments will be required to give a written statement to any potential customers saying they will be screened and treated regardless of ability to pay and that they have the right to ask questions about treatment options and costs, among other requirements.

The freestanding emergency department must also post a sign saying whether it accepts patients enrolled in Medicaid, Medicare, Child Health Plan Plus or TRICARE. It must also specify which plans will be in-network and which will be out-of-network and the prices for the 25 most common health care services it provides.

The sponsors are Sen. John Kefalas (D), who has unsuccessfully sponsored similar bills in the past, along with Sen. Jim Smallwood (R), Rep. Lang Sias (R) and Rep. Jonathan Singer (D). The bill’s bipartisan backing says good things about its chances.

What's the Cost?

Requiring more transparency in health care prices, prescription drug costs and billing practices is an idea that has picked up steam, often with enthusiasm from lawmakers on both sides of the political aisle. That’s because the inability to shop for health care based on price and quality is often blamed, at least in part, for the high cost of care.

Supporters of transparency look at it like this: Would you leave your car at the repair shop without getting an estimate? Would you fill your grocery cart with unpriced items? Would you buy an airplane ticket if you don’t know how much it cost? Probably not, unless your name happens to be Bill Gates.

But in many cases, this is exactly what happens to health care customers. They have no idea how much procedures cost, and no way to find out.

The main opposition has come from hospitals and pharmaceutical companies, who worry about the reporting burden or say the data legislators are requesting is either unhelpful or already available publicly.

A handful of so-called transparency bills have popped up so far during this legislative session, an early theme that we’re seeing here at CHI.

Before we highlight those bills, though, we should point out that Colorado health care consumers do have some existing transparency tools.

Republican Sen. Kevin Lundberg and Democratic Sen. Irene Aguilar led a successful bipartisan push during the 2017 session for a law requiring public transparency of the “cash-pay” rate for some common procedures. UCHealth, for example, posts prices for uninsured customers on its hospital websites for the 50 most common inpatient services, 25 most common outpatient services and emergency department visits.

Colorado also has the All-Payer Claims Database, operated by the Center for Improving Value in Health Care, that offers some comparison shopping. And the Colorado Hospital Association last fall published its first report on the financial health of the state’s hospitals.

Despite this momentum, transparency bills have been a hard sell at the Capitol in years past. Rep. Joann Ginal (D) has tried unsuccessfully during the past two sessions to increase transparency around drug prices. She’s trying again this session with House Bill 1260 and again is drawing strong opposition from the pharmaceutical industry. Other transparency efforts, including several backed by the governor’s office, failed last session.

The transparency bills that have been introduced so far fall into two categories, one that focuses on information for consumers and a second that targets systemwide reporting to help policymakers as they struggle to address the high cost of health care.

Consumer transparency bills

Prescription Drug Price Transparency (HB 1260): The bill would require manufacturers to give a 90-day notice if the price of a prescription drug is going to increase more than 10 percent. The manufacturer also would be required to explain what is driving the price increase. Insurers would be required to submit information to the state Division of Insurance about the prices and costs of covered prescription drugs that were dispensed.

A survey by Healthier Colorado, which supports the bill, found that 83 percent of respondents said prescription drugs cost too much, with six percent saying the prices are just about right. When asked if the public should have the right to know the factors that go into the pricing of prescription drugs, 94 percent agreed. (The survey of 503 likely voters was taken between January 16 and January 18. It was weighted for voter affiliation, with 36 percent Republican, 33 percent Democrat and 31 percent unaffiliated. The margin of error is plus or minus 4.38 percentage points.)

So far, no Republicans have signed on as sponsors — which could doom the bill in the GOP-led Senate.

  • Sponsors: Sen. Joann Ginal (D), Rep. Dominique Jackson (D), Sen. Dominick Moreno (D)
  • Status: Assigned to the House Health, Insurance & Environment Committee. A is scheduled for Thursday, March 8.

A bill to prohibit price gouging on prescription drugs, sponsored by Sen. Irene Aguilar (D) and Rep. Susan Lontine (D), met a quick death in the Senate State, Veterans & Military Affairs Committee, which voted 3-2 against it.

Systems Transparency Bills

Hospital Financial Transparency Measures (HB 1207): Would require the state to prepare an annual report on hospital expenditures. Each hospital in the state would be required to provide cost reports, annual audited financial statements, staffing information and uncompensated care costs, among other data.

  • Sponsors: Rep. Chris Kennedy (D), Rep. Bob Rankin (R), Sen. Dominick Moreno (D) and Sen. Jim Smallwood (R)
  • Status: Assigned to the House Health, Insurance & Environment Committee. A hearing is scheduled for Thursday, March 8.

Diabetes Drug Pricing Transparency Act 2018 (HB 1009): This bill notes that about 300,000 Coloradans have been diagnosed as diabetic and another 110,000 are likely undiagnosed. Annual medical costs total nearly $4 billion, with about $700 million going to prescription drugs, according to the bill. It seeks to require drug manufacturers and pharmacy benefit managers to submit annual reports to the state board of health about prices of essential diabetes treatment drugs, including profit levels. The sponsor, Rep. Dylan Roberts, lost his 22-year-old brother, Murphy Roberts, to a low blood seizure several years ago. Murphy Roberts, a college junior, was diagnosed with Type 1 Diabetes when he was 10.

  • Sponsors: Rep. Dylan Roberts (D) and Sen. Kerry Donovan (D)
  • Status: Assigned to House Health, Insurance & Environment Committee. A hearing is scheduled for Thursday, March 22.

Hospital Community Benefits Reporting Requirements (SB 155): This bill would have required tax-exempt hospitals to publicly report on the tax benefits they receive and the community benefits they provide. Critical access hospitals would be exempt from the requirement.

  • Sponsors: Sen. Irene Aguilar (D) and Rep. Brittany Pettersen (D)
  • Status: Failed in Senate State, Veterans & Military Affairs Committee by 3-2 vote.

Voters may have a chance to weigh in on the transparency issue thanks to BrokenHealthcare.org, led by David Silverstein and Andrew Graham. Their group hopes to get a broader health care transparency measure on the November 2018 ballot.

Find Deb Goeken on Twitter: @CHI_DebGoeken 

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