Just 5.6% of hospitals are compliant with price transparency rule

Photo: John Fedele/Getty Images

More than 94% of the nation's hospitals are not in full compliance with the price disclosure rule mandated by the Centers for Medicare and Medicaid Services, according to new data from PatientsRightsAdvocate.org.

Implemented on Jan. 1, the rule is intended to make hospital pricing information more accessible to patients so they can compare costs and better inform their care; this means hospitals have to post negotiated rates, and display prices, for virtually all items and services.

Yet in the almost seven months since the rule's implementation, only 5.6% of hospitals are fully compliant. And 80.6% of hospitals didn't publish payer-specific negotiated charges "clearly associated with the names of each third-party payer and plan," as required by the rule.

In addition, 51.6% of the 500 hospitals surveyed did not publish any negotiated rates at all, while 39.6% did not publish any discounted cash prices.

WHAT'S THE IMPACT

The findings not only demonstrate hospitals' lack of compliance but underscore Americans' general support for such rules, and suggest that failing to follow through on price transparency requirements could alienate a large swath of a given health system's customer base.

The numbers bear this out: 85% of Americans believe that cutting costs and improving quality by making healthcare prices, quality metrics prices, quality metrics and outcomes more transparent should be a priority for lawmakers, the data showed.

Also, 82% support the federal government requiring hospitals to make their prices readily available to the public. Seventy-seven percent support increasing the penalty for hospitals that don't comply from a $300 per-hospital, per-day fine to $300 per hospital bed per day.

Meanwhile, 56% of adults feel like they or a close family member were overcharged when seeking medical care.

Based on the research, general public sentiment and the push from the White House, PatientsRightsAdvocate.org recommends stricter and higher penalties for noncompliance, along with robust enforcement of the rule; actionable pricing data standards to unleash all actual price information to consumers, technology innovators and search engines to usher in online shopping tools; the posting of all actual and complete prices of shoppable services at both the discounted and negotiated prices; and advance notification and posting of prices at the point of care, as well as online, to ensure consumers have access to pricing data.

THE LARGER TREND

The results are in line with earlier findings, published in June in the Journal of the American Medical Association and the American Journal of Managed Care, showing that most hospitals are not compliant with the price transparency rule.

JAMA's report analyzed 100 random hospitals and found that 83 were noncompliant with at least one major requirement. Only 33 reported payer-specific negotiated rates and 30 reported discounted cash prices in a machine readable file.

The Centers for Medicare and Medicaid Services required that, starting on Jan. 1, all U.S. hospitals publicly display the cash price and negotiated charges for 300 shoppable services. 

Hospitals must display price data, including expected out-of-pocket costs, for shoppable services that can be scheduled in advance in a consumer-friendly manner that facilitates hospital comparisons.

The penalty for noncompliance is a maximum of $300 per day, but the JAMA study said that the cost of disclosure of negotiated rates could be greater than any fines.

The American Hospital Association has argued that the disclosure of privately negotiated rates does nothing to help patients understand what they will actually pay for treatment. It also accelerates anti-competitive behavior among commercial health insurers and hinders innovations in value-based care delivery, the AHA said.
 

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com