FTC Warns Major Healthcare Companies About Lack of Pricing Transparency: Key Questions to Ask Before Procedures

The United States Federal Trade Commission (FTC) has turned its attention to healthcare pricing by issuing warnings to 24 of the nation's largest healthcare companies. These companies have been reminded that patients are entitled to receive clear, comprehensive, and timely cost information.

Announced on October 5 by FTC Chair Andrew N. Ferguson, the warning emphasizes procedures that are routine or non-urgent, which can be scheduled in advance.

The federal agency highlighted that withholding price details, providing incomplete information, or presenting a price that later excludes important charges could be considered deceptive or unfair practices under Section 5 of the FTC Act.

The FTC's official statement explains that a patient might reasonably interpret a quoted figure as the total cost of care, only to later discover additional fees for medical services, facility charges, or other costs not initially disclosed.

Although the FTC did not disclose the identities of the 24 companies that received these warnings, the action is not a penalty nor an assertion that these companies violated the law. The primary goal is for them to review their transparency policies and correct any deficiencies.

Understanding the Full Cost Picture

One crucial aspect of the FTC's warning is that merely providing a single figure before a procedure is not sufficient.

The FTC notes that pricing information can be misleading if it omits significant components of the expected cost. Examples include physician fees and charges for the facility where the procedure is conducted.

This issue is particularly relevant for outpatient surgeries, MRIs, colonoscopies, certain diagnostic tests, or any scheduled procedures involving multiple providers.

Hospitals might bill for using their facilities while other professionals, such as surgeons, anesthesiologists, radiologists, and pathologists issue separate charges.

Essential Questions Before Agreeing to Procedures

Before committing to a medical service that can be planned, patients can minimize financial surprises by asking for the expected cost in writing and clarifying what exactly is included.

• What is the estimated total cost of the procedure?
• Does this include the hospital or medical center fee?
• Are the physician's fees covered?
• Will there be separate charges for anesthesia, radiology, laboratory, or pathology services?
• Are all participating professionals within the insurance network?
• What is the cost for individuals paying out-of-pocket without insurance?
• What would be the approximate patient responsibility after insurance coverage?
• Can a detailed estimate be provided in writing?

For insured individuals, using the cost estimation tool provided by their insurer and comparing that information with details from the hospital or provider can be particularly helpful.

Federal Transparency Rules for Hospitals

The FTC's action complements regulations managed by the Centers for Medicare and Medicaid Services (CMS).

Under CMS's federal hospital price transparency rules, most U.S. hospitals must publish their standard rates online.

Besides a comprehensive price list, hospitals are required to offer consumer-friendly information on at least 300 shoppable services or all services if they provide fewer than that number.

However, the FTC made it clear that compliance with CMS rules does not automatically shield companies from the FTC Act. Even if a company meets certain technical publication requirements, it could still face scrutiny if the consumer information provided is misleading, incomplete, or inaccurate.

Options for Uninsured Patients

Additional protections are available for those without health insurance or who choose not to use it for a service.

CMS mandates that when medical care is scheduled at least three business days in advance, these patients can request a good faith estimate of expected charges.

This document should outline anticipated services and may include items like hospital or facility fees. CMS advises keeping this estimate for comparison with the final bill.

If a provider or facility charges at least $400 more than the good faith estimate, the patient may be eligible, if other requirements are met, to initiate the federal dispute resolution process. The general timeframe to start this process is within 120 days from the initial bill date.

These protections do not automatically apply to every discrepancy between an estimate and a bill, nor do they function the same way in medical emergencies.

A Special Tool for Florida Residents

Residents of Florida also have access to a state tool for comparing costs before certain procedures.

The Agency for Health Care Administration (AHCA) in Florida offers the Florida Health Price Finder, which allows users to check and compare healthcare costs using insurance claim data.

This information serves as a reference and does not necessarily represent the exact amount each patient will pay, as the final cost depends on factors such as insurance coverage, deductibles, copays, coinsurance, providers involved, and actual services used.

Increasing Federal Pressure on Hospital Pricing

The latest FTC warning does not occur in a vacuum.

In June, it was reported that over 500 hospitals received warnings or requests related to compliance with federal price transparency rules.

That process was mainly linked to CMS regulations. The FTC's involvement now adds another dimension: ensuring not only the availability of price information but that it is not incomplete or misleading to consumers.

On the same day, October 5, CMS, alongside the Departments of Labor and Treasury, announced new rules to enhance the precision, accessibility, and comparability of price data published by health plans and insurers.

The combination of these measures increases pressure on hospitals, healthcare companies, and insurers to provide patients with a clearer understanding of potential costs before agreeing to scheduled medical care.

For consumers, the practical advice is straightforward: for any procedure that can be planned, don't rely solely on a verbal quote. It's advisable to inquire about what is included, request the information in writing, verify potential separate charges, and compare available data before receiving care.