Indiana's health care transparency laws get failing grade

Back to TopCommentsE-mailPrintBookmark and Share

Indiana’s laws requiring hospitals to release price information are woefully inadequate, according to a report by two health insurance reform groups.

Indiana was among 29 states to receive an ‘F’ grade in an analysis of all 50 state statutes by Catalyst for Payment Reform, a California-based employers group, and the Health Care Incentives Improvement Institute, a Connecticut-based group formed by employers, doctors and health plans promoting new ways to pay for health care.

The report, issued in March, is yet another stinging criticism of hospital prices. In February, Time magazine published the longest article in its 90-year-history, detailing a series of cases in which hospitals pushed “aggressive markups” onto patients—charging $1.50 for one Tylenol pill, $8 for a box of tissues, and $283 for what is normally a $20 chest X-ray.

High hospital prices are increasingly borne by consumers as the percentage of them with high-deductible health plans rises every year.

“In this environment, it is only fair and logical to ensure that consumers have the necessary quality and price information to make informed decisions about where to seek health care,” wrote Suzanne Delbanco and Francois de Brantes, the respective executive directors of the two employer groups, in an introduction to their report.

The report gave only two A's—to Massachusetts and New Hampshire—in part because those states require hospital information to be reported on a public website, not just in reports to a state agency, as is the case in Indiana.

Some Indiana hospitals report their “chargemaster” rates on their own websites, but these are of marginal use to consumers, since, as the Time article demonstrated, the charged rates bear little relationship to the cost of those services or even to the prices charged to health insurers.

For years, hospitals raised their chargemaster rates annually in an effort to win higher reimbursement rates from health insurers. But the practice fell hard on uninsured patients because most hospitals gave no more than a 20-percent discount to the uninsured.

Beginning last year, IU Health began offering 40-percent discounts to uninsured patients in order to comply with new rules that were part of the 2010 Patient Protection & Affordable Care Act.

Still, huge numbers of patients pay much larger bills than their insured peers or pay nothing and risk having their credit records damaged when the hospital turns over their accounts to collection agencies.

There is little legal pressure at this point on Indiana hospitals to disclose more information. In December, the Indiana Supreme Court sided with Clarian Health—now called Indiana University Health—in a case against it by two uninsured patients who received care at the IU North Hospital in Carmel.

Abby Allen and Walter Moore complained that IU Health billed them for its chargemaster rates simply because they signed a contract pledging to pay reasonable prices for the care they were about to receive. The contract did not include a specific reference to a price.

But the Indiana Supreme Court said the contract’s language was sufficient.

“Many courts have addressed contracts similar to those of patients’ and most have held that price terms in these contracts, while imprecise, are not sufficiently indefinite to justify imposition of a ‘reasonable’ price standard,” Justice Robert Rucker wrote in the case titled Abby Allen and Walter Moore v. Clarian Health Partners Inc.

The American Hospital Association, in response to the Time article, said its prices on any individual item—like a Tylenol pill—include costs for all the staff and facilities needed to provide those services. It also called for greater transparency to fix the “broken system” of incentives created by government and private insurance plans.

“It’s important to keep in mind that what is charged and what is eventually paid are two different numbers,” wrote Rich Umbdenstock, CEO of the American Hospital Association. "Because nearly all of a hospital’s payments are set either by government, which pays less than the cost of caring for patients, or through negotiations with private insurance companies, the vast majority of patients do not pay what is listed on the hospital bill – which is why one in four hospitals operate in the red.

"What is most important and relevant to patients is how much they will pay out of pocket. Because insurers determine how high their customers’ out-of-pocket rates will be, customers need insurers to provide real-time information.”


  • Indy hospitals get F
    Indiana hospitals get F for billing transparency
  • Keep demanding Transparency
    If the public and the employers keep asking for it, eventually the insurance companies and hospitals will need to do a better job. One problem is that contracts prohibit making the negotiated rate public! We need an Indianapolis (and Lafayette, Muncie, Ft Wayne, etc) version of "Bitter Pill"
  • Room for improvement
    Opportunity for iSolus?
    Just try and call your doctor's office before your next visit and ask ahead of time how much it will cost - they can't give you that information. How about waiting until you or a loved one is at death's door and you have to go to the nearest hospital - think you are going to quibble over signing a "contract" about reasonable pricing or shop around for another hospital? The Time article referenced above should only be read if you are in good health because it will make your blood boil. It is outrageous what the hospitals get away with - but I guess that is what billions spent lobbying will get you.

Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. Angela IS the best RD

  2. We are a nation of speed. All of our younger lives are filled with deadlines, quotas and bottom lines. We start to ease out of the pressured rat-race when we finally see "retirement." The most enjoyable travel on the planet is passenger rail service. Indy to Chicago does not beat Megabus or Southwest Airlines in speed. Passenger rail however has the best seating, mammoth legroon, seat backs that recline to more than 45 degrees and employers that really want you to return as a customer. Indiana municipalities need to maintain subsidies to support this transportation mode. Losing it is loss for all of us.

  3. Good day! I just want to testify how i got my loan from Mr. Eric Lefkofsky after i applied several times from various loan lenders who claimed to also testify right in this forum,i thought the testimonies where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan. Until a friend of mine introduce me to this popular Mr. Eric Lefkofsky who promised to help me and indeed he did as he promised without any form of delay. I never thought there are still reliable loan lenders until i met Mr. Eric lefkofsky who indeed helped me with the loan and changed my belief. I promised to share this testimony after I got my loan. I don't know if you are in any way in need of a genuine and urgent loan,free feel to contact Mr. Eric Lefkofsky via their email{grouponfunding@hotmail.com}

  4. Its a THUG issue. Bleecker Street and NYX are thug bars. They attract thugs of all races. Places that attract thugs need to be kicked out of Broad Ripple. Ain't nobody got time for that!

  5. Hello everyone, My name is Marian Gareth, I am from the Texas, United State, am here to testify of how i got my loan from Mr Andre Frank {frankloancompany@yahoo.com} after i applied Two times from various loan lenders who claimed to be lenders right in this forum,i thought their lending where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan.Until a friend of mine introduce me to Mr Andre Frank the C.E.O of Andre Frank Loan Company who promised to help me with a loan of my desire and he really did as he promised without any form of delay, I never thought there are still reliable loan lenders until i met Mr Andre Frank, who really help me with my loan and changed my lief for better. I don't know if you are in need of an urgent loan, free feel to contact Mr Andre Frank on his email{ Frankloancompany@yahoo.com} for help