On August 21, Governor McCrory signed into law the “Health Care Cost Reduction and Transparency Act of 2013.” The legislation enhances the transparency of healthcare costs by providing information to the public on the pricing for 140 common medical procedures.
“For too long, North Carolina patients have been in the dark on what they can expect to pay for common medical procedures when they are admitted to a hospital,” said Governor McCrory in a press release. “This new law gives patients and their doctors pricing information so they can make an informed financial decision with regard to their health care.” The Washington Post praised McCrory and the legislature in its recent story “Want to know if your hospital is a rip off? Move to North Carolina.”
Hospitals and ambulatory surgical facilities must now report pricing for commonly performed procedures to the state Department of Health and Human Services, who will be required to make the information available on the DHHS website. The privacy of patient information related to the pricing data reported to DHHS will be protected and cannot be used for commercial purposes.
Hospital officials claim that they are forced to engage in the practice called “cost-shifting” — charging higher prices on some patients and services to cover losses on others — making it very difficult for patients to determine what procedures will cost.1 And since health care consumers are not typically accustomed to this sort of comparative shopping, it will take time for the law to have the intended effect of lowering artificially high healthcare costs. However, Senator Bob Rucho, an advocate for the changes says, “Transparency is a good first step to fixing things.”
A key driver in developing these policies was a joint investigation by the Raleigh News and Observer and the Charlotte Observer that published a series of articles on how the growing market power of consolidated hospital giants has been driven up prices. The reports exposed the substantial revenues flowing into nonprofit hospitals, the seven-figure executive salaries, and the common practice of hospitals suing uninsured patients who have past-due payments on their bills and of turning over past-due accounts to collection agencies without notice.
The Act also addresses questions related to certain hospital billing and debt collection practices, repealing a hospital’s ability to place a lien on residential properties for past-due payments as well as their ability to garnish the wages of patients with outstanding debt.
Charging for healthcare procedures not actually performed will explicitly be made illegal as of December 1, 2013.
Also, charity policies and financial assistance programs for all 112 hospitals in North Carolina must be submitted to DHHS to be published on their website, including eligibility requirements, how to apply for financial assistance and contact information for appropriate hospital staff for helping patients understand how they can apply for free and reduced-cost care.
According to a report “How Charitable are North Carolina’s Hospitals?” by the NC Justice Center, only 41 hospitals post comprehensive charity care policies online.
1. News & Observer: “AG Roy Cooper will seek ways to curb N.C. hospital prices“