Many hospitals don’t meet price transparency rules
Fines too low to motivate providers
WASHINGTON — A federal rule requiring hospitals to post prices online took effect a year and a half ago, but spotty data and noncompliance have meant the rule has yet to live up to its promise of lowering health care costs, employers and researchers say.
Many hospitals still aren’t fully following the rule, and the federal government — despite threatening larger monetary penalties for noncompliance — still hasn’t issued any fines.
In all, thousands of hospitals are estimated not to be fully complying with a part of the rule requiring they post troves of data online that include information on cash prices for services, rates negotiated with payers, and other information that can be helpful to researchers and people and businesses paying for health care.
The data, which some had hoped would help drive down health care costs, has often been incomplete and difficult to decipher and compare to data from other hospitals.
Among the common deficiencies are blank or missing data fields, not listing rates for all insurers or cash rates paid by the uninsured, providing inaccurate prices or listing payer names and not the associated plan names.
“All of our members and many employers have been trying to make use of this and were looking forward to having this information,” said Bill Kramer, executive director for health policy at the Purchaser Business Group on Health, which advocates for private and public employers that buy health care.
“But, at this point, there are very, very few examples of success,” he said.
The so-called “price transparency” rule, which took effect in January 2021 under the Trump administration, was intended to help consumers shop for care, increase competition and drive down prices, especially in heavily consolidated hospital markets.
While most hospitals have been willing to follow parts of the rule — namely, a requirement that they post user-friendly lists or tools to help patients shop for services — they have been less compliant with a requirement that they post “machine readable” files of standard charges — data that experts say would be far more useful in driving down costs.
It’s not clear how many of the 6,000 hospitals across the U.S. are following the rules. The Centers for Medicare and Medicaid Services, which enforces the rule, has been auditing a sample of hospitals since January 2021 and told CQ Roll Call that, as of this month, it has issued about 352 warning notices for noncompliance.
CMS has also issued 157 corrective action plan requests to hospitals that previously received warning notices, but have not yet corrected deficiencies. Nearly 170 hospitals have received case closure notices after addressing previous citations. CMS has yet to issue any fines. “To date, each hospital that has come under compliance review has resolved its deficiencies, or is in the process of doing so,” said a CMS spokesperson in a statement. “Therefore, it has not been necessary for CMS to issue any penalties.”
A series of studies of sampled hospitals has demonstrated the low compliance. For example, a March study of 89 children’s hospitals showed 51% omitted payer negotiated rates from their machine readable files, and 40% did not include cash rates, which are typically paid by the uninsured. About 98% of the sampled children’s hospitals were compliant with the “shoppable” services requirement, which critics say provides little value to consumers because it may not represent what patients end up paying.
“It’s against their financial interest to disclose the data. That’s why there’s such low compliance,” said Sophia Tripoli, director of Health Care Innovations at Families USA, a consumer advocacy group that is calling for increased fines and enforcement.
Hospitals with more than 30 beds can be penalized a maximum of $2 million annually for noncompliance, which isn’t enough of a fine to motivate providers “flush with cash,” she said.
Hospital leaders have expressed concerns that releasing data on what various payers are paying for services could give insurers more leverage in negotiations.
Turquoise Health, which was formed at the end of 2020 to analyze data, and help providers and payers become compliant with the rules, has found that about 4,500 of the nation’s 6,093 hospitals have posted data files.