Large number of hospitals not complying with price transparency rule

The CMS rule on hospital price transparency went into effect Jan. 1, 2021, and requires hospitals to make public a machine-readable file containing a list of all standard charges for all items and services. The idea behind the rule is to empower patients with better information and drive down costs as they seek out low-cost providers. The rule was opposed by the American Hospital Association and faced heavy industry criticism.

The journal Health Affairs conducted an audit of the largest 100 hospitals in the U.S. to determine compliance with the regulation. Of the 100, 65 were unambiguously noncompliant and:

• 18 percent did not post any files or provide links to searchable databases that were not downloadable
• 82 percent either did not include the payer-specific negotiated rates with the name of payer and plan clearly associated with the charges or were in some other way noncompliant.

Of the remaining 35 hospitals in the sample, at least 22 appeared to be compliant and some exceeded the regulations in terms of the amount of information shared.

To be considered compliant by Health Affairs, hospitals’ files need to be machine-readable and should contain the gross charge, discount cash price, payer-specific negotiated charges, de-identified minimum and maximum charges, and descriptions of, and codes for, the items and services provided by hospitals. For the payer-specific negotiated charges, hospitals must reveal both the name of the payer and plan.

Hospitals are calling on the Department of Health and Human Services to exercise enforcement discretion with respect to the hospital price transparency rule because of the COVID-19 pandemic until the end of the public health emergency.

The authors state: “We strongly believe that hospitals should be required to adhere to this regulation. As the final rule notes at several points, hospitals already have all of this information in their electronic medical record and claims processing systems; while assembling and posting these required files entails some costs, it should not be insurmountable. Moreover, hospitals were already granted a one-year extension for this regulation.”

They noted that 22 hospitals managed to clearly comply, suggesting that industrywide, structural barriers are not preventing hospitals from posting their standard charges.

Currently, noncompliant hospitals can be penalized $300 per day for noncompliance. Health Affairs says it will continue to monitor compliance rates of hospitals and urges all of them to follow the regulation to benefit patients.