Price transparency noncompliance rampant, especially in concentrated markets, rural areas

Hospitals located in more concentrated healthcare markets, rural hospitals and those with higher per patient-day revenue could require “greater scrutiny” to ensure compliance with federal price transparency rules, according to a new analysis.

The warning comes alongside yet another review of hospital websites finding low industrywide adherence to the mandate, which requires hospitals to post the prices for their most common procedures as well as a patient-friendly tool to help shop for 300 common services.

Across 5,239 hospital websites evaluated six to nine months after the Centers for Medicare & Medicaid Services' (CMS') Jan. 1, 2021, effective date, roughly 51% of hospitals did not adhere to either price transparency requirement, researchers wrote in a JAMA analysis published Tuesday. 

Almost 14% had a machine-readable file but no shoppable display, and 30% had a shoppable display but not a machine-readable file. Less than 6% of hospitals were compliant with both components of the mandate, the analysis found.

In addition to the big-picture compliance numbers, the researchers’ review painted a picture of which types of acute care hospitals were more often in line with CMS’ requirements.

For instance, hospitals located in moderately concentrated or highly concentrated healthcare markets were significantly less likely to be transparent with their prices, according to the study.

Hospitals located in urban areas were significantly more likely to adhere to CMS’ rule, researchers found, as were hospitals in the lowest quartile of revenue received per patient day when compared to those in higher quartiles.

“Greater scrutiny of hospitals without these characteristics may be needed to ensure hospital price transparency,” researchers wrote in the analysis.

Other hospital characteristics such as total gross revenue, size, emergency service capabilities and ownership type were not associated with a facility’s adherence to the mandate, they wrote.

The team acknowledged that their count of adherent hospitals could be an underestimate as some may have updated their websites within the study’s three-month data collection window.

Yet the low tally is roughly in line with other price transparency analyses from the past several months., for instance, found 5.6% compliance with both price transparency components at the six-month mark and 14.3% as of one year past the final rule’s effective date.

Of the new study’s findings, the association between low compliance and high market concentration is likely to ring the most warning bells for those already concerned about widespread consolidation. Research suggests that hospital mergers result in less competition and subsequent increases in the cost of care.

Hospitals and health systems have defended their low adherence to the price transparency rule by citing the high cost of implementation. They’ve also struggled with the language of the requirement, which they say is vague and difficult to interpret.

“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 Research wrote in an April report polling 66 hospital revenue cycle leaders on price transparency compliance.