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Health insurers are now required to post prices they pay to hospitals

MELISSA BLOCK, HOST:

Health insurers are now required by the federal government to publicly post the prices they pay to hospitals and doctors. The new rule took effect yesterday. It's another step toward more transparency in our complicated, convoluted health care system. Julie Appleby is a reporter with our partner Kaiser Health News, and she joins us to talk about this development. And first, Julie, explain why this decision on health insurance price transparency could be such a big deal.

JULIE APPLEBY, BYLINE: You know, this is a big deal because these prices have long been a big secret, right? People don't know how much they're going to pay for health care before they go and actually access that care. Even employers who are, after all, paying the bills, a lot of times - they don't know what their insurers have negotiated at various places. So the fact that this is going to be posted and that everybody can see it is a really big deal. And it's not just hospital prices. This is going to be prices for just about everything that an insurer contracts for - so the hospital, the clinics, the imaging centers, even the doctors. So this will be one more step towards shining a light on what has been a very opaque system.

BLOCK: Now, as I understand it, hospitals already had to post information about prices. Is that right?

APPLEBY: You're right. Starting last year, they were required to post their negotiated prices with insurers. Many of them have, but many of them have not posted their prices at all. Some of them have posted something called charges, which are amounts that most people don't pay. They just haven't posted the negotiated rates that they negotiate off those charges. So many hospitals have not complied. But now guess what? You know, insurers are going to come in, and they are going to post those hospital prices that they've negotiated. So that information is going to be out there as well.

BLOCK: Well, this is a requirement now for health insurers under this new rule. What teeth does it have? How will it be enforced?

APPLEBY: You know, this does come with some penalty fines, and they can add up pretty fast because it's $100 a day per violation, per affected enrollee. So let's say you're an insurer or a self-insured employer with 10,000 members, say, so do the math. I mean, that can add up pretty fast. So that's the teeth in this. We'll see how that plays out. There were fines for hospitals, for example, that were less. They were about 300 bucks a day, although the government has recently increased that to 5,500 bucks a day. But for the most part, the government has sent warning letters and has only fined two hospitals so far.

BLOCK: OK, so if I'm a health care patient and I want to know how to use this information from my insurance company, what do I do?

APPLEBY: You know, initially this may be a little difficult because these are really big files. So you're going to have to dig into it and really look at what's going to cost you. But right now, as we speak, there are a lot of companies, entrepreneurial companies, companies that are already out there that are downloading this information. They're going to put it in more consumer-friendly formats, and it'll be in there so that you can look up, say, a price of a procedure that you need. Let's say you need an X-ray. So you'll eventually be able to figure out, hey, it's going to be 250 bucks at the hospital near me. It'll be 75 bucks at the imaging center across the street, for example. And if you go to your doctor's office, it might be 25 bucks. So you'll be able to see that kind of difference and decide how you want to spend your money.

BLOCK: So comparison shopping, essentially, and that all sounds pretty straightforward.

APPLEBY: It is. But it's going to be complicated because there may be additional things that come with that X-ray or that MRI. There may be some things that aren't included in the cost. So it may not be as easy initially to decipher, but it is going to be helpful for consumers.

BLOCK: OK. Julie Appleby - she's a reporter with our partner, Kaiser Health News. Julie, thanks so much.

APPLEBY: Thank you.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

As special correspondent and guest host of NPR's news programs, Melissa Block brings her signature combination of warmth and incisive reporting. Her work over the decades has earned her journalism's highest honors, and has made her one of NPR's most familiar and beloved voices.