Large hospitals and systems take a scattershot approach to complying with price transparency rule

A stethescope and money
Hospitals have taken an inconsistent approach to complying with a major rule to post payer-negotiated rates online, an analysis found. (Valeriya/Getty)

Large hospitals and health systems have been inconsistent in their approaches to compliance with a major new rule that requires them to post payer-negotiated rates online, and experts warn this could cause confusion for consumers.

Hospitals had to post the payer-negotiated rates for 300 shoppable services online starting Jan. 1. But while some hospitals have posted spreadsheets with their rates, others have relied on online cost estimator tools. 

The controversial regulation prompted a legal challenge from the hospital industry that eventually failed in the courts.

Consulting firm ADVI Health reviewed the websites for 20 (PDF) of the largest hospitals in terms of bed size and found that the largest hospitals all posted some type of pricing information online. But many of the hospitals did not provide healthcare common procedural codes for the services, according to the analysis, which did not list the hospitals.

“Many institutions didn’t use the codes, which makes it difficult to make comparisons across facilities,” said Caitlin Sheetz, lead author of the analysis and head of analytics for ADVI.

Inconsistencies on terms and price

Hospitals also used different terms to label the pricing information, such as price charges, fees and negotiated rates. This could cause confusion if one hospital refers to price and another is using charges or negotiated rates, according to the analysis.

“Our assessment was this was so new and every hospital seems to be doing it a little differently,” Sheetz said.

Part of the problem was a lack of uniformity from the Centers for Medicare & Medicaid Services (CMS), which said the services had to be presented in a user-friendly format but did not identify a specific method, according to the analysis.

Some hospitals have taken to posting spreadsheets that outline the shoppable services and list the various payer prices. Kaiser Permanente, for example, has a downloadable spreadsheet of the payer-negotiated rates on each of its hospitals’ websites, the health system told Fierce Healthcare.

Some hospital systems have offered price estimator tools instead of the list of payer-negotiated rates. CMS allowed hospitals to comply with the rule if they already had a cost estimator tool, but only if the tool included the shoppable services.

The Mayo Clinic has had an online price estimator tool for years, but so far it does not include payer-negotiated rates.

“We are working diligently to compile information on our negotiated rates and expect to post that information in early 2021,” Mayo Chief Financial Officer Dennis Dahlen told Fierce Healthcare in a statement.

Providence Health, for instance, told Fierce Healthcare it offers a price estimator that gives patients out-of-pocket estimates tailored to their insurance and preferred hospital.

The system added that its tool goes beyond the shoppable services it is required to list and includes “information for many common procedures a health consumer can schedule.”

Posting the rates also highlighted the variation in the cost of some procedures, ADVI's analysis found. For instance, a high-volume radiology code ranged from $90 to $2,033 among hospitals.

MedStar Georgetown's list of shoppable services offers an example of some major differences among its payers, according to a review from Fierce Healthcare. For instance, the repair of superficial wounds to the neck, scalp or hands and feet has a negotiated charge of $505 for CareFirst but $4,138 for Cigna, according to the hospital's spreadsheet.

Compliance crackdown?

It remains unclear how CMS will handle the discrepancies among hospitals and crack down on the hospitals that have yet to fully comply, especially as facilities continue to fight the COVID-19 virus.

The agency is auditing a sample of hospitals for compliance, a spokesperson from the Trump administration told Fierce Healthcare earlier this month. CMS is also reviewing any complaints received on its website on hospital compliance, they said. Fierce Healthcare has reached out to CMS under the Biden administration for an update.

If a hospital is not compliant, the agency could request a plan to get the facility in line. A hospital could be fined $300 per day and be placed on a CMS website if it continues to not comply.

CMS did not say which hospitals are a part of the audit. Sheetz said that there could be high variability of compliance based on the type of facility. A larger medical center, for instance, may have been better prepared as they are more aware of the incoming regulations.

“Smaller critical access hospitals may have been more surprised because they are not as up to date on CMS policy,” Sheetz said.