Ohio hospitals must now comply fully with the federal price transparency rule that went into effect on January 1, 2021, but was only loosely followed by the nation’s hospitals and not strongly enforced.
Gov. Mike DeWine signed H.B. 49 on January 3, legislation passed unanimously by both chambers on December 18, 2024 and supported by patients besieged with five- and six-figure bills due to surprise billing, murky price schedules, and hidden fees.
“By passing this strong price transparency bill, Ohio legislators ignored special interests and stood up for Ohio healthcare consumers who for too long have been blinded to prices and forced to pay for care with a blank check,” said Cynthia Fisher, chairman and founder of Patient Rights Advocate.org (PRA), in a press release.
Enforces Federal Law
The Ohio law mirrors the federal law in requiring hospitals to post pricing information for at least 500 “shoppable services,” services patients schedule in advance, in a “comprehensive machine-readable file” that conforms with “any template” required by the federal law and can be readable as “plain language without the use of software.”
If Ohio hospitals don’t comply, the state law prohibits them from collecting medical debt from patients and filing negative credit reports against them.
In 2022, Colorado passed legislation that stops hospitals from debt collection if they are not in compliance with the federal law. Ohio is the first state to codify the federal rule into state law.
Biden Rollback
During his first administration, President Donald Trump took the initiative on hospital prices when in 2019 he issued an executive order titled “Improving Price and Quality Transparency in American Healthcare.” That order led to a final rule that went into effect on January 1, 2021.
Compliance has been weak. In its latest semiannual pricing report, PRA revealed a mere 21 percent of hospitals nationwide were in compliance with the rule. Ohio was at 13 percent.
“Enforcement has been almost nonexistent,” Ilaria Santangelo, director of research at PRA, told Health Care News. “During Biden’s four years in office, as few as 17 hospitals were fined for noncompliance.”
In July 2024 the Biden administration changed the formatting requirements, allowing hospitals to post price estimates, algorithms, and percentages instead of dollars and cents.
“We know estimates don’t work because they provide no accountability,” said Santangelo. “Bills can end up being tens of thousands of dollars more than quoted.”
The “pricing tool” required by the rule has also been problematic because it can exclude many costs associated with a service.
Congressional Inertia
Despite hospital price transparency getting significant attention from the public, including a “Power to the Patients” campaign started by the music artist Fat Joe, reform has been slow to gain more traction in Congress.
Two bills, failed to make it through the lame duck session last fall, despite bipartisan support. These were the Lower Cost, More Transparency Act and the Health Care PRICE Transparency Act 2.0.
Hospital financial structures make it difficult to create workable transparency, Matt Dean, coauthor of The Heartland Institute’s American Health Care Plan: State Solutions.
“Hospital systems have struggled with the technical realities of posting prices, given the complexity of their price structure,” said Dean. “Secondly, hospitals do not have a strong history of sharing the pricing arrangements they make with third-party payers, as those have been traditionally regarded as ‘trade secrets.’”
Proof Positive
The Ohio law will make it difficult for hospitals to post one price and bill another.
“We were contacted by one woman who got a $5,500 estimate for a hospital service three times, and when her bill came in it was over $70,000,” said Santangelo.
Posted prices prevent those situations from happening because consumers can go back and document them.
“We helped that woman by comparing the itemized bill she received to the charges in the machine-readable file, and the hospital ended up honoring the estimate they gave her three times,” said Santangelo.
Even generous health plans are no protection because increasingly patients are billed for unanticipated charges.
“Something like 80 percent of hospital bills contain errors, so meaningful price transparency will give patients even more protection,” said Santangelo.
Additional Interest
Hawaii, Oregon, Pennsylvania, and Washington are also considering bills that would codify the federal hospital price transparency rule into state law, says Santangelo.
“Legislators know there has been minimal enforcement, and they know this will go a long way with their constituents,” said Santangelo.
AnneMarie Schieber ([email protected]) is the managing editor of Health Care News.
AnneMarie Schieber is a research fellow at The Heartland Institute and managing editor of Health Care News, Heartland’s monthly newspaper for health care reform.
