Even high-revenue hospitals falling short of making pricing information more accessible, study finds

Hospital finance
Inconsistencies in price reporting were common across the board as of early March, but "selective compliance" was most pronounced among high-revenue centers, according to a recent study. (Getty/utah778)

A JAMA Internal Medicine study is the latest in a string of analyses revealing hospitals’ frequent noncompliance with a new federal mandate requiring them to post prices for medical services.

Published Monday, the study found that, as of early March, 83 out of 100 randomly sampled hospitals were noncompliant with at least one of the major requirements of a new rule from the Centers for Medicare & Medicaid Services (CMS). This decreased slightly to 75 in a parallel review of the country’s 100 highest-revenue hospitals.

CMS’ rule took effect on Jan. 1. Among its primary requirements for hospitals is the display of machine-readable discounted cash prices and payer-negotiated rates, as well as a consumer-friendly tool for searching and viewing the prices of 300 shoppable medical services.

Within the random sample of 100 nationwide hospitals, 33 and 30 facilities reported payer-specific negotiated rates and discounted cash prices in a machine-readable format, respectively. Fifty-two of the 100 hospitals supplied consumers with the price estimator tool, among which 23 posted the payer-negotiated rates in a machine-readable file.

Compliance was slightly more common for the 100 hospitals with the highest gross revenue as determined by CMS data for 2017.

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“Hospitals exhibited selectively higher compliance with the requirement of a price estimator for patients to view personalized out-of-pocket costs for shoppable services; a smaller proportion made their data fully accessible to the public by posting a machine-readable file with payer-specific negotiated rates,” the researchers wrote.

Among these, 35 posted payer negotiated rates and 40 reported discounted cash prices in the machine-readable format. Eighty-six offered consumers a price estimator tool; however, only 34 hospitals posted payer-specific negotiated rates in a machine-readable file.

“Selective compliance was especially pronounced for the 100 highest-revenue hospitals, a low proportion of which fully disclosed their negotiated rates despite high compliance with the price estimator tool requirement," the researchers wrote. "Because patient-oriented price estimator tools make prices visible only for a given patient and insurance plan and not to payers or the public, selective compliance may fail to expose abuses of market power, affect price negotiations, or support broad analysis of price variation to the extent intended by the transparency initiative."

The researchers noted that the overall low compliance could be tied to CMS’ relatively low penalty of $300 per day for noncompliance. They also floated the COVID-19 pandemic as a potential road bump for some of the facilities.

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“The rule was finalized well before the pandemic, however, and the effective date was set in November 2019,” they wrote. “Compliance may increase over time, but the early selective compliance suggests reluctance that may persist.”

This week’s study follows others published by The Hilltop Institute and Milliman that described roughly similar rates of noncompliance. The latter review also highlighted a “wide degree of diversity” in how hospitals were presenting the information to consumers, which hospital executives have told Fierce Healthcare in the past is due to the ambiguity of CMS’ final rule.

Since it was first proposed a few years back, the price transparency rule endured a gauntlet of legal challenges from professional organizations such as the American Hospital Association that were ultimately rebuffed in federal courts. The rule has now been in effect for more than five months, allowing the government agency to send out its first wave of warnings to hospitals that weren’t up to snuff.