Few hospitals comply with price transparency rule, study shows
Less than 6% of hospitals are fully compliant with the federal requirement that health systems publicly disclose the prices they charge for medical care, according to a newly published report.
More than 80% of 500 randomly selected hospitals did not publish the charges negotiated with third-party payers, half didn’t disclose any negotiated rates at all and around 40% did not disseminate discounted cash prices, according to a Patient Rights Advocate analysis conducted from May to July. The overwhelming majority of hospitals did not post all payer-specific and plan-specific negotiated rates.
While many hospitals have seemingly taken a wait-and-see approach to the rule amidst the leadership change at the White House, President Joe Biden reinforced President Donald Trump’s price transparency rule in a recent, broad executive order that aims to boost economic competition.
“As President Biden said, ‘Capitalism without competition isn’t capitalism. It’s exploitation,’ and that is exactly what hospitals are doing to American consumers by obfuscating prices and refusing to comply with the price transparency rule,” Cynthia Fisher, founder and CEO of Patient Rights Advocate, said in a news release. The hospital price transparency rule, which took effect Jan. 1, has the potential to shift power away from hospitals and into the hands of consumers, she said.
Ideally, publishing payer-specific negotiated rates along with the chargemasters, discounted cash prices, and minimum and maximum negotiated rates would allow consumers to be better healthcare shoppers, incentivizing providers to lower prices. Hospitals that don’t comply also face a $300 daily fine if they don’t disclose the rates for 300 “shoppable services in a consumer-friendly form, .
Hospitals contend that consumers largely don’t use existing price estimators, high-deductible health plans haven’t spurred more healthcare “shopping” and that disclosing payer-specific rates could ultimately raise prices as the lowest-cost providers adjust to the average. Meanwhile, economists and policy experts say the tools or data haven’t been readily available to facilitate price comparison and that high-cost providers would be forced to justify steep price variation.
Several other studies have identified hospitals’ noncompliance, but not to the extent of the Patient Rights Advocate analysis. Just 17 of 100 randomly chosen hospitals had posted their prices, researchers reported in the Journal of the American Medical Association last month. Around two-thirds of health systems did not meet the rule’s requirements, according to a Health Affairs study of 100 providers surveyed through February.
CMS started auditing websites and reviewing complaints submitted to the agency shortly after the rule took effect. In April, the agency issued its first round of warning letters to hospitals and gave the facilities 90 days to comply.