While hospitals post a mixed record on complying with a major price transparency rule, the Biden administration has not announced how they are going to keep facilities in line.
Several studies and analyses have shown that larger health systems have not done a good job fully complying with the rule to post payer-negotiated rates online. The results come as the Centers for Medicare & Medicaid Services (CMS) has not announced major enforcement actions against hospitals not meeting the controversial rule’s requirements.
“So far with the current administration, we haven’t seen the agency put out any information on the auditing process or changes to the reporting requirements or changes to the penalties for noncompliance,” said Caitlin Sheetz, director and head of analytics for consulting firm ADVI, in an interview with Fierce Healthcare. “Unless that changes, I don’t think we are going to see large shifts in hospital behavior.”
The payment rule went into effect Jan. 1 and requires hospitals to publish a machine-readable file outlining their payer-negotiated payment rates and another website that should enable consumers to search for 300 shoppable medical services. The goal of the rule is to enable consumers to find the best price for shoppable procedures.
But compliance among hospitals has been mixed.
A March blog post in Health Affairs found that of 100 large hospitals analyzed, 65 were “unambiguously noncompliant.”
Of the remaining 35 hospitals, 22 appeared to be compliant, and several facilities exceeded the regulations.
An analysis, released Friday from consulting firm Milliman, looked at 55 health systems representing more than 600 hospitals from Jan. 1 through March 3. It found that 68% of the health systems reviewed posted a file containing at least one of three categories: standard charges, payer-specific negotiated rates or gross charges.
But Milliman found a “high degree of diversity” in how hospitals posted their charges “with everything from very ‘wide’ flat files to very complex hierarchical structures.”
Milliman’s analysis isn’t the only one to discover that hospitals have taken a scattershot approach to compliance.
Most hospitals “have pieces of the rule but not both the components in terms of the shoppable services and then reader-friendly format as well as the list of all the prices of all hospital services,” said Sheetz.
ADVI did its own analysis in mid-January that found less than 50% of 20 of the largest hospital systems were fully compliant.
At the same time, CMS has been coy on how it is going to enforce the rule, which has a $300 a day penalty for noncompliance.
The agency told Fierce Healthcare on Jan. 8 that it is auditing a sample of hospitals to determine compliance. It is also investigating complaints from the public. The agency planned to put out additional information as it becomes available in the future.
However, the agency has not said what actions it is going to take nor has it announced any hospitals that are noncompliant since President Joe Biden was inaugurated Jan. 20.
A CMS spokesperson told Fierce Healthcare late last month that it expects hospitals to comply with the rule and “will enforce these rules to make sure Americans know the cost of their healthcare in advance.”
One reason could be that CMS is “going the route of letting others put the pressure for them,” said Chris Severn, CEO of Turquoise Health, a company working on software solutions to compare prices.
Severn points to a recent Wall Street Journal article that included data from the company. The article said some hospitals have blocked their price information from showing up in web searches.
“I wonder if CMS is giving a little bit of grace, acknowledging the PR side doing this work and then start enforcing next year,” he said.
Experts are also questioning the role of the pandemic in compliance. COVID-19 has been an enormous strain on hospital resources as patient volumes have plummeted due to the virus.
CMS may not want to “burden hospitals further given the public health crisis that is happening,” Sheetz said.
While some larger systems ended 2020 in the black due to increased access to liquidity and diversified revenue portfolios, staff in some systems were laid off or furloughed. This could have shifted resources away from getting the systems ready for compliance, Severn said.
“Now I don’t think there is any excuse getting into April or May of 2021 for hospitals to not put something up,” he said.
Severn added he is “glass half full” on compliance, noting that large systems like the Mayo Clinic and Banner Health recently got their act together.
“We definitely have enough of the acute care hospital market that this disclosure will have its intended effect,” he said.