Medical Price Transparency Law Rolls Out: Physicians Must Help Patients Estimate Costs

Massachusetts physicians and hospitals are now required by law to provide cost information for procedures and services to patients who request it.

The new price transparency regulations became effective for physicians and hospitals on January 1, 2014.

Health insurers have been required to provide information on cost estimates for office visits to physicians and specific tests and procedures since October 2013.

Additionally, the provider must give patients any information—such as CPT codes—that their insurer needs to calculate what their out-of-pocket costs will be.

The new requirement is part of an ongoing rollout of Chapter 224, sweeping payment reform legislation passed in August 2012 that seeks to improve health care quality while reducing costs through various strategies, including alternative payment methodologies and increased price transparency.

What Physicians Need to Do •	Provide the patient with the CPT codes for all anticipated services and procedures. Patients will provide those codes to their health plan to obtain the contracted costs for the professional services, facility fees, and out of pocket costs related to the request. Patients should also be given the phone number of the facility’s billing office, which may be able to provide additional information about facility costs. •	Cooperate with health plans’ requests for further information in a timely fashion, to help the health plans make the most accurate estimates possible for your patients.

State officials have said they hope the new rules will transform the health care industry by allowing patients to easily obtain medical cost information and comparison shop for their care.

The law states that if asked by a patient, a health care provider must disclose the allowed amount or charge of the admission, procedure or service, including the amount for any “facility fees” required within two working days. The law defines “allowed amount” as the contractually agreed amount paid by a carrier to a health care provider.

The law also compels providers who participate in networks to provide “sufficient” information about the proposed procedure or service to allow a patient to use the network’s toll-free telephone number and website established to disclose costs.

According to guidelines to carriers issued in mid-December by the Division of Insurance, insurers are expected to communicate with providers, after securing patient permission, to obtain enough information to determine price information and cost data.

“It is anticipated that providers will cooperate with carrier requests to provide such information to consumers and carriers should endeavor to give providers a reasonable time within which to provide the information,” the memo said.

The Massachusetts Office of Consumer Affairs and Business Regulations has compiled a directory of websites and phone numbers at the health plans to help consumers  get the precise estimates of the total of a specific service or procedure, including out of pocket costs.

The MMS has developed a sample information form that physicians and practice staff can fill and give to patients, which can then be given to insurers.

Although the new law has dramatic implications, many consumers seem so far unaware of their new rights to cost information.

Blue Cross Blue Shield of Massachusetts has been averaging less than three a day, according to Bill Gerlach, director of member decision support. Physicians may experience a similar trickle of requests, but as the law becomes better known among patients and more of them move to high deductible plans, that may change, say some observers.

Many physicians are also just learning about the new requirement and wonder how it will work on a day-to-day practice level.

Partners In Internal Medicine’s George Abraham, M.D., worries that patients will get so frustrated by the multiple phone calls they’ll have to make to gather the various cost components that they’ll just give up.

“On paper it looks great. We’ve increased transparency, but in reality it’s mired in red tape,” said Dr. Abraham. “It could take days for patients to get all the information they need. It’s not user-friendly.”

Atrius Health said it hopes its providers—and patients—will have a fairly easy time getting health care cost information. It has implemented a software program that gives providers easy access to not only their own charges, but also information from the insurance company about patients’ out-of-pocket costs.

“It provides a one-page report for patients that tells them how much we typically get reimbursed by the plan and what the deductible and co-pay would be—and where they are in their deductible—based on the insurance product,“ said Chief Medical Officer Richard Lopez, M.D.

There are a few caveats, to the Atrius system, however. It is populated with insurance data from only the state’s largest insurers and, as with other practices, lacks cost information for providers outside the Atrius organization. He conceded that most physician practices do not have the resources to implement something similar.

Bruce Leslie, M.D., of Newton Wellesley Orthopedic Associates, said he supports the intent of the new price transparency law, and even sees a potential upside for community practices like his.

“We suspect our costs are less than [those] at the big academic centers so this could be a good marketing opportunity for us,” said Dr. Leslie.

Vicki Ritterband, Vital Signs Staff Writer

  1. Trang Tran says:

    interesting to know, what is the exact schedule?

  2. Thank you MMS for bringing this to our attention
    In order to contiue to help for the compliance of this Medical Price Transparency Law
    “The law states that if asked by a patient, a health care provider must disclose the allowed amount or charge of the admission, procedure or service, including the amount for any “facility fees” required within two working days. ”
    What physician need to do as you proposed above would be tough for providers and consumers to get information in the time allotted .
    Perhaps MMS should provide the names of Provider relation manager -their contact and the President of the insurance company and have them send amemo to all the health care providers how and what to do for consumers as well as health care providers including facilities and free standing places like MRI etc
    Hopefully this can be done for the intertest of all

  3. MMS says:

    Dr. Morse: A pdf of the DOI’s memo to insurers is available for download at

  4. Bob Hertz says:

    In the long run I think this law will have a major impact on hospital outpatient revenues.
    There are so many procedures which are greatly overpriced to cover hospital overhead, while the procedure can be done much cheaper off-site.

    I do hope that the outrageous facility fees are the first to go. These are price-gouging fraud in many cases.

  5. Steve Kagen M.D. says:

    Dr MacMillan did not understand the Transparency in All Health Care Pricing idea. Each physician, hospital, pharmacy or other caregiver must determine their own fees they accept as payment in full and openly disclose them at all times, including on the Internet, except for government sponsored programs that mandate specific prices.

    In America, we should be allowed to pay the same price for the same service or product at a given business… It’s called Equality and its the American Way.

    Patients want to know, “How much is it, really? What’s the lowest price you have accepted as payment in full?

  6. abraham morse says:

    Erica, can you include a link to the actual regulations please. I can’t seem to find them

  7. Frank MacMillan Jr MD FACG says:

    I agree with most of my colleagues except for the “same prices for everyone”, not because I fault the reasoning, but my lack of trust in someone else determining what I can charge, and then enforce that to all payers. Sounds like a race to the bottom, and an end to independent practice and professionalism.

  8. Steve Kagen M.D. says:

    IMO any one (insurer, employer, hospital or clinic administrator, family member, government program) or any thing (computer drop down list/menu) that comes between a patient and their physician is just getting in the way.

    Soon, either by law or public outcry, the lowest price accepted as payment in full by a given health care facility for all of their medical services and/or products will become everyone’s price – and that lowest price will always be openly disclosed to the public on the Internet.

    In doing so, elected officials at all levels of government will realize that payments to physicians and hospitals for government sponsored programs, such as Medicare and Medicaid, are below operating costs, which causes “cost shifting” to everyone else.

    Our goal must be Equality, where all patients are treated equally and at the same price for the same service or product.

  9. Joe Heyman says:

    How will the MMS be helping us to comply? Is there a central website where we physicians can go to see the allowable fees for our CPT codes from different insurers? Is MMS working with insurers on a solution for this problem? I have no idea what each insurer pays me for each patient with a different plan within the same insurer for each CPT code. Half the time I can’t even figure out their correct copay, let alone their exact deductible.

    Thanks for the information, though.

  10. Erica Noonan says:

    Yes, Thank you Dr. Sands, it has been corrected. – Erica Noonan, MMS

  11. Robert L D'Agostino, MD says:

    What is a fee schedule? We get paid whatever the insurance company wants. BTW just had United Health Care bounce a $47 check with my bank charging me $20 Fee. Can’t wait to see how long that takes to sort out.

  12. Thomas A. Morris, M.D. says:

    What my fee is for office visit and what insurance covers and what is the patient’s responsibility are three different amounts. How am I supposed to communicate this to the patient? This is a construct forced upon physicians by the insurance industry and the government that we can’t reasonably comply with. It has nothing to do with transparency but everything to do with tyranny.

  13. Mark A Latina, M.D says:


    This should be the insurers problem, not the physician!! We a fee schedule, but what the insurer reimburses or covers is completely different. The law needs to be changed to put this into the insurers side.
    For instance surgical procedures include – Physician cost, hospital cost, anesthesia costs etc. – So what will a procedure cost ? Who knows? As far as patients with deductibles, we will tell them our usual and customary charge and they will be responsible for a minimum 50% upfront payment at the time of service.

  14. Danny Sands says:

    Great post. Thanks for bringing our attention to this new law.

    I think you have a typographical error that will change the meaning of a sentence:

    “including the amount for any “faculty fees” required”

    Did you mean to write “facility fees”?


  1. […] -Vicki Ritterband, Massachusetts Medical Society Blog. The post goes on to characterize some of the limitations and patient burdens of the new transparency requirements. […]