KLAS: Hospitals say price transparency remains too confusing and pricey to implement

Hospitals and health systems believe a price transparency rule, while well-intentioned, is far too expensive to implement and is confusing, a new report found. 

The report released Thursday from the health IT firm KLAS Research underscores major compliance issues surrounding a landmark rule that requires hospitals to post payer-negotiated rates for certain services in an easy-to-understand format. Compliance with the rule has been scattershot since it went into effect last year. 

“There are concerns about cost, data accuracy and patient options of pricing tools; some respondents worry about patients’ ability to understand the displayed pricing data, and today, most patients are unaware online pricing information exists,” the report said. 

Hospitals must offer clear pricing estimates for at least 300 shoppable hospital services and could face fines for each day of noncompliance.

KLAS spoke with 66 revenue cycle leaders to get a sense of how hospitals feel about the shift towards price transparency and the nuts and bolts of implementing the rule more than a year after its compliance deadline.

“Many hospitals comply only because they are required to by law and because they want to avoid monetary penalties,” the analysis said. “Additionally, organizations struggle to find resources to help with compliance because of the financial burden of investing in a regulation that doesn’t provide a return on investment.”

Throughout 2023, respondents say they are going to have to continually invest in new employees and technology to meet the mandate. 

Among those surveyed, 52% said that the rule requires a significant number of resources to comply while 40% put resource requirements at a moderate level and 8% at a small number. 

Many of the respondents lashed out at two parts of the rule: the requirement that facilities use machine-readable files for the pricing information and that they put online a master list of rates. 

Respondents cited problems with “software used to publish the pricing information. Some say the published rates mainly benefit payer and provider organizations instead of patients.”

KLAS also explored how hospitals are looking to comply with the rule.

Third-party vendors were the most popular option, employed by 36% of respondents, while 28% who relied on their electronic medical record vendor. Only 18% relied on internal services and 18% were unsure. 

The vendor that respondents most used for help was Epic, used by 16 of the revenue cycle leaders, followed by Experian Health with eight. 

“Some who currently use a third party say they will consider moving to their EMR vendor’s platform in the future to further consolidate systems,” KLAS’ report said. “For example, some Epic EMR customers who use a third party for price transparency intend to move to Epic’s offering once it becomes more robust.”

A report released back in February showed that one year after the rule’s implementation only 14.5% of hospitals are fully compliant with the rule. CMS has warned more than 300 hospitals about non-compliance.

And more than a year after it went into effect, KLAS’ survey shows that confusion around the rule still reigns. 

“Many organizations are not investing beyond the bare minimum requirements, and they don’t plan to do more until there is further clarity around the regulations and the expectations going forward,” KLAS wrote.

Respondents say they don’t know what types of resources are going to be required in the future as “price transparency rules evolve or are interpreted differently.”