Medicare To Publish Its Fees on the Web

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IN A FEW WEEKS, the Centers for Medicare and Medicaid Services (CMS) will publish its reimbursement prices for common procedures on its Web site at The objective is to allow consumers to see the fees Medicare currently pays to hospitals and physicians and allow uninsured patients to negotiate comparable discounts for services provided to them.

This is not the only step that federal healthcare officials will take to make the prices they pay for healthcare services accessible to the public. Within a few months, federal Web sites will publish the negotiated prices for healthcare services provided to the Department of Defense, the Federal Employees Health Benefits Program, and private health plans in six communities.

These actions have a common goal: to create transparency in the discounted prices federal agencies pay for healthcare and to allow consumers to use this information to make informed decisions about their care. Health and Human Services (HHS) Secretary Mark Leavitt has dubbed this initiative “payer power.” During the next couple of years, his agency plans to require hospitals to publically report data on mortality and outcomes on a variety of diseases, ranging from heart attacks to infection. It is expected that consumers, including senior citizens, will use price and outcomes data to shop hospitals and physicians in advance of elective surgeries and other procedures.

I hope most of you grasp the implications of this development. Federal healthcare officials are irrevocably moving the American healthcare system towards a “consumer first” environment. As Leavitt told the press, the immediate goal is to give patients the same full range of information avail- able to them as when they go out to buy a car or a refrigerator.

Consumer-directed health plans give patients a powerful economic motive to know all the costs of their care–and negotiate discounts in advance of elective services. In my view, as the federal government puts healthcare prices paid by Medicare, the Department of Defense and the Federal Employees Health Benefits Program into the public domain, it won’t be long before labs and pathology groups get these types of phone calls from customers. For this reason, it is timely and smart for laboratories to develop policies and procedures to meet the needs of price-shopping consumers.


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