Hospitals’ Price Transparency Compliance Is Improving Despite Remaining Low at 36%

Hospitals’ Price Transparency Compliance Is Improving Despite Remaining Low at 36%
Hospitals’ Price Transparency Compliance Is Improving Despite Remaining Low at 36%

It has been more than two and a half years since CMS’ price transparency rule took effect, with only 36% of U.S. hospitals compliant. However, despite the fact that less than half of U.S. hospitals are in compliance, these rates have been steadily improving over time.

This is according to a new report from nonprofit Patient Rights Advocate — it analyzed the websites of 2,000 hospitals and found that only 721 of them were fully compliant with all the rule’s requirements. The 36% compliance rate is significantly higher than the 24.5% rate the nonprofit published in its February report

Progress will remain slow unless CMS can do a better job of effectively enforcing its rule, the report declared. 

CMS began enforcing the rule on the first day of 2021. The law requires hospitals to post their gross charges, payer-specific negotiated charges, de-identified minimum negotiated charges, de-identified maximum negotiated charges and cash prices on their websites in a machine-readable file. It also mandates that hospitals must publish pricing for the 300 most commonly-used services to their website in a consumer-friendly manner.

The majority of hospitals may not be fully compliant with CMS’ rule, but this doesn’t imply a complete failure to publish their pricing information. Instead, the main concern lies in the incomplete nature of most hospitals’ files or the failure to clearly display the payers and plans associated with the listed prices, the report said.

The analysis highlighted the importance of full compliance — by presenting all prices in a straightforward dollars-and-cents format across all data fields, hospitals can ensure both machine readability and easy comprehension for patients, which facilitates clear price comparisons. 

Additionally, the inclusion of minimum and maximum negotiated rates allows for immediate comparison with individual or competitive plan prices, as well as discounted cash prices. This vital information empowers consumers to recognize significant price variations within the same hospital for identical items, services and medications, the report pointed out. For example, the compliant file posted by Rush University Medical Center in Chicago shows that the Aetna International rate for a 100-milligram rituximab infusion is $1,798.67, while the Blue Options PPO rate $1,362.63.

This data also serves as a valuable resource for technology developers, search engines, employers and unions because it allows them to effectively compare prices across various hospitals. With this knowledge at their disposal, all purchasers can leverage competition and safeguard themselves against overcharges. The hope is that this will ultimately drive down the costs of their healthcare and coverage, according to the report.

Compliance differed widely among the largest health systems included in the report. Notably, none of the hospitals owned by HCA Healthcare, Tenet Healthcare, Providence, UPMC, Baylor Scott & White Health, Mercy nor Avera Health were deemed fully compliant by Patient Rights Advocate. 

However, the report noted substantial improvements in compliance for Kaiser Permanente, Community Health Systems and CommonSpirit Health. From February to July, Kaiser’s compliance rate jumped from 7% to 98%, CHS’ rate rose from 23% to 97%, and CommonSpirit’s rate went from 58% to 88%.

The report argued that CMS’ weak enforcement of its rule is a major cause of noncompliance — the agency has fined only four hospitals. CMS issued its first two fines for price transparency noncompliance last June — 18 months after the rule went into effect. Northside Hospital in Atlanta was fined $883,180 and Northside Hospital Cherokee in Canton, Georgia was fined $214,320. Both hospitals came into compliance immediately, the report said.

CMS’ next two fines came this April. The agency issued a $102,660 fine to Frisbie Memorial Hospital in Rochester, New Hampshire and a $117,260 fine to Kell West Regional Hospital in Wichita Falls, Texas. Both hospitals are still noncompliant, according to the report.

Photo: sinemaslow, Getty Images

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