Analysis: 30% of providers not complying with CMS' new rule on price transparency

Approximately 30% of hospitals are not complying with a new rule that requires them to post payer-negotiated rates, with a lack of resources the main reason, a new analysis found.

The analysis of more than 1,000 providers across 27 states completed by consulting firm Guidehouse found larger health systems were more likely to comply with the rule that went into effect Jan. 1.

The Centers for Medicare & Medicaid Services (CMS) rule requires hospitals to post prices in one of two ways: a machine-readable file containing all standard charges for the facility’s items and services or a consumer-friendly file that lists 300 shoppable services. A hospital can use a patient price estimator tool to comply with the requirement.

The analysis found 30% of hospitals weren’t complying with either method.

The reasons for noncompliance ranged from a lack of resources due to COVID-19 or other issues, a lack of understanding about the rule and waiting to see what their competitors do.

“Larger hospitals and health systems were most likely to be compliant and are using existing tools (i.e., MyChart) to meet the requirements via the consumer-friendly shoppable services file,” the analysis said.

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Guidehouse found 60% of the providers chose to comply with the rule via the consumer-friendly file, and 48% used the machine-readable file.

The analysis, released Tuesday, also found major inconsistencies with how hospitals are complying with the machine-readable file.

“There is a general lack of consistency in format and content, making it difficult for anyone (e.g. CMS, providers, payers) to scan, consolidate and derive insights without significant data transformation and enhancements,” the analysis said.

Guidehouse noted that its analysis also underscored the “herculean task” CMS faces in evaluating compliance with the rule. CMS can fine hospitals $300 a day for each day they are not in compliance.

The firm believes more providers will comply with the rule as resource constraints, especially those related to the COVID-19 pandemic, lessen and with more clarity on how to comply.

“However, having a strategic plan to mitigate risks and capitalize on the benefits of appropriate compliance is key,” the analysis said.