TOPEKA — Seeking to cut down on medical “sticker shock,” the Kansas Senate on Tuesday advanced a bill to require insurance companies to give patients a cost estimate before services are provided.
Supporters of House Bill 2668 say it would give consumers information they need to cope with changes in the health care system that require patients to shoulder a larger share of the cost and the decision making than a few years ago.
The bill would apply when the insurance company requires pre-approval of charges for medical services.
In those cases, the insurer would be required to provide the consumer with the following information:
• The amount the consumer will have to pay out of pocket, including any deductibles, co-insurance and co-payments.
• The amount the health care provider and/or institution will be paid.
• Whether any payments will be reduced or increased from regular fee schedules and, if so, why.
The bill is needed because health care consumers are increasingly expected to shop around for health care but without the information they need to make good decisions, said Sen. Jim Denning, R-Overland Park, who carried the measure on the floor.
“We’re asking patients to be more and more responsible for a higher portion of their health care bill,” he said.
In addition, he said, the federal Affordable Care Act will bring people into the system who have not previously been insured and who may not understand what insurance requires of the patient when it comes to cost sharing.
Denning also said that because of the act’s requirements for electronic medical record-keeping, nearly all insurers have or soon will have the ability to provide a patient’s out-of-pocket cost up front. In most cases, it’s as simple as activating a feature of standardized medical billing software that nearly all providers already use.
Denning said a study by the Legislative Research Department projected that more bills will go unpaid and uncollected if patients don’t know what the charges will be in advance.
“With the high deductibles in place (and) because patients do not know what their out-of-pocket costs will be, they are estimating the private practices and hospitals will pay an additional $20 million write-off annually because of the lack of transparency,” Denning said.
Denning was briefly challenged by Sen. Caryn Tyson, R-Parker, who questioned whether the state should require the cost estimates or leave it to the market.
“Wouldn’t it be much simpler for doctors and hospitals to post the prices of their services and then individuals could decide … instead of mandating it?” she asked.
Denning replied that a lot of states are trying to build price directories and that he sees it as a step in the right direction. But it goes only so far, he said.
“With (varying) co-insurance and deductibles, there are probably a hundred different variations,” he said.
In a nod to the insurance industry, the estimates would be nonbinding and could change if it turns out the patient needs more complicated and costly services once treatment is underway.
In addition, a Senate committee amended the measure to take effect in January 2017 rather than 2015, as the original bill would have required, records show.
The bill was advanced on a voice vote pending a final formal vote by the Senate on Wednesday. If passed, the bill would go to the House for consideration.