A controversial price transparency rule that went into effect in January was intended to enable consumers to comparison shop for certain healthcare services.
But a new study from Kaiser Family Foundation discovered that such comparison shopping is difficult among different providers. The study, published Friday, also found that few hospitals are giving out payer-negotiated rates, a key requirement of the rule.
“Among the few hospitals in this analysis that do provide payer-negotiated rates, the markets in which the payer operates is not always clear,” the study said. “And, due to a lack of standardization, comparing process across hospitals is problematic.”
The study found that the data provided by compliant hospitals could allow for comparisons of prices within that facility.
However, the price estimates for a service from one provider “might not be comparable to the price of the same service for another provider, even when presented by billing code,” the study added.
Part of the reason it is so difficult to do a comparison between one provider and another is that few hospitals distinguished the price difference between inpatient and outpatient care.
Another issue is that it isn’t clear if the estimate includes a professional fee.
“While some hospitals included both facility and professional fees (e.g., for physician services) in their estimate, others opted to just include the facility fee in their total price estimate,” the study said.
The rule does require facilities to name the price and main service alongside any ancillary services and professional fees, but Kaiser found such ancillary services were rarely listed.
“The results from implementation thus far demonstrate a wide range in interpretation and compliance with the hospital rule and may suggest similar challenges with implementation of the insurer-focused rule in 2022 if standardization is not enforced,” Kaiser said.
The group looked at the websites of 102 nongovernmental adult hospitals across 50 states and the District of Columbia.
The rule requires hospitals to post charges for at least 300 shoppable services on their website that is accessible via a consumer-friendly tool. The charges must include the description of the health service or item and the billing code used for Medicare reimbursement. Hospitals that don't comply could be fined $300 a day.
“Price information must be searchable by service description, common billing code and payer,” Kaiser said. “The tool must specify the location at which the shoppable service is provided, and whether the rates apply to an inpatient setting, outpatient setting, or both.”
However, Kaiser and several other studies have shown a dearth of compliance across most hospitals.
Kaiser found most of the 102 hospitals it examined included some price information like the gross hospital charge, but “Many did not provide the public with payer-specific negotiated rates.”
The study found that only three hospitals in the sample gave payer-negotiated rates on their consumer tools “without requiring a patient to provide personally-identifying information.”
Another 35 hospitals gave payer-negotiated rates in a machine-readable file, and it was unclear whether all payers were included in those files.
“We found significant inconsistencies in how the files are formatted, the level of detail in payer names and markets, which billing codes are used, and what the measurement of price is,” the study said. “Anyone attempting to make comparisons across hospitals using these data should therefore exercise caution.”