Ohio hospital pays patients for bills from competing facilities

Alliance Community Hospital wants to see what other area facilities charge and what insurers reimburse, then post that information online.

By Emily Berry — Posted May 19, 2008

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An Ohio hospital is soliciting help from its patients in putting together a comparison shopping tool showing not just what competing hospitals charge, but also what insurers are paying them for care.

In exchange for submitting a copy of a bill from a competing hospital and the corresponding explanation of benefits form from certain insurers, Alliance Community Hospital will pay patients $100.

"We don't want any personal information -- only the costs of a medical procedure," a hospital ad announcing the program said. The ad said the hospital plans to post compiled prices and reimbursements on its Web site.

The offer of cash for EOB forms is the latest effort toward pricing and quality transparency at the Alliance, Ohio hospital.

A state law that took effect in November 2006 requires Ohio hospitals to post prices for common procedures on their Web sites and make hard copies of price lists available to patients, but Alliance CEO Stan Jonas wants to take things a step further.

"It's our belief that educating the public on how to comparison shop for health care services, as they do for other major life investments (i.e. cars, homes) will benefit them by helping to clarify their best choices for quality and value," Jonas wrote in an e-mail to AMNews.

"In our own interest, we hope that a majority of the consumers who do this research will ultimately wind up at our front door."

Because health plans negotiate discounts and keep reimbursements largely confidential, there is still an element of mystery to health care prices, said Ohio State Medical Assn. spokeswoman Lisa Hackley.

"Transparency is important to Ohio's physicians," she said. "However, as this situation demonstrates, if our system were truly transparent with both pricing and reimbursement, facilities would not have to pay patients for their information."

Antitrust repercussions?

Antitrust laws would prevent physicians from doing the same thing under some circumstances. But if the information were collected by a third party as part of a survey, if the information were at least three months old, and if the disseminated results were aggregated, it would be acceptable, according to U.S. Dept. of Justice guidelines published in 1996 setting out an "antitrust safety zone."

The 2006 Ohio law is intended to keep hospitals and doctors from working together to set prices in an anticompetitive spirit.

To qualify for the $100, the hospital bill must be from one of three competing facilities -- Salem Community Hospital in Salem, Mercy Medical Center in Canton, and Robinson Memorial Hospital in Ravenna -- and show what the patient's insurance paid for an emergency department visit, MRI scan, CT scan, inpatient stay or physical therapy treatment.

Alliance is looking for EOBs from Cigna, Anthem, UnitedHealthcare, Medical Mutual, AultCare or Summa Health, which operates hospitals and a health plan.

Within a week after newspaper ads were published in April, said Alliance CEO Jones, patients had submitted about 500 forms. Only about two dozen had met the hospital's specifications and qualified for the cash.

"We have no problems with hospitals doing this," Cigna spokeswoman Gwyn Dilday said. "We just doubt that this will provide any meaningful or actionable information to consumers."

She said the company's answer would be the same if it were a physician rather than a hospital paying for copies of patients' EOB forms.

Summa Health spokesman Michael Bernstein said the company had no plans to start collecting EOB forms from patients at its hospitals but had no objection to its competitor collecting information about what the Summa Health insurance plan pays.

"The EOBs are the property of the patient, and we have no concerns if they choose to share them publicly," he said.

Ohio Hospital Assn. spokeswoman Tiffany Himmelreich said the organization didn't know of any other hospitals in the state offering patients cash for EOBs.

"Alliance Community Hospital is doing what a lot of hospitals are doing -- looking at creative ways to offer benefits to their community by putting out different types of health information," she said.

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