Many U.S. hospitals have not been publishing their prices, as required by a new law. Now, a panel of researchers, purchasers and regulators is calling for new measures around increasing compliance and the usability of published pricing data.
“New hospital and health plan transparency requirements have the potential to strengthen the market power of employers relative to consolidated hospital systems and insurers, enhance regulatory oversight and provide researchers with an abundance of information to inform policymaking,” the panel, convened by Georgetown University’s Center on Health Insurance Reforms and funded by the Robert Wood Johnson Foundation, wrote in a recent report.
“However, in their current iteration, the federal rules do not yet support these goals,” the members wrote.
After meeting in June to review and discuss a pricing data analysis conducted by the Wakely Consulting Group, the panel concluded that the Centers for Medicare & Medicaid Services’ (CMS’) current $300 per day maximum penalty “is too low to incentivize widespread compliance.”
But while a recent proposal to increase the maximum penalty to as much as $5,500 per day “could help expand the number of hospitals that publish pricing data,” other efforts will be necessary to ensure the price data published by hospitals are truly accessible and usable by consumers and other stakeholders, the panel said.
Citing the inconsistent reporting and display formats observed among hospital websites so far, the group said that limiting the current rule’s flexibility would be a key first step toward ensuring uniformity. They also called for more explicit guidance on how hospitals (and eventually payers) should be presenting the data, such as by presenting clearer definitions or by offering a template format for organizations to use.
CMS should also begin devoting more of its resources toward conducting and publishing hospital website audits to ensure greater compliance, the panel wrote. However, they said that other entities such as states and large purchasers could be leveraged to exert pressure on providers to supplement federal enforcement efforts.
Recommendations for increased oversight and enforcement came alongside those for increased transparency and access.
CMS’ recent proposal that hospitals publish their data in a way that is accessible through web searches could be augmented by a centralized repository managed by CMS, which the panel acknowledged would be a “significant undertaking” that could pay dividends in future large-scale pricing analyses.
Further, numerous panel participants “felt strongly” that CMS’ decision to exclude Medicare and Medicaid payment rates from the reporting requirements “hinders useful analysis of how commercial insurers are performing in their efforts to extract price discounts from providers.” The group recommended that these payment rates, as well as a hospital’s quality scores, be displayed to inform purchasing decisions.
“Most, if not all of these recommendations could be implemented by CMS without additional statutory authority,” the group wrote. “Ultimately, greater transparency alone will not bring the increasingly untenable costs of our healthcare system under control. But because transparency may be a necessary predicate to more muscular cost-containment measures, improving access and usability should be a priority.
CMS’ hospital price transparency rule took effect Jan. 1. Among its primary requirements for hospitals is the display of machine-readable discounted cash prices and payer-negotiated rates as well as a consumer-friendly tool for searching and viewing the prices of 300 shoppable medical services.
There’s been little shortage of evidence that many hospitals have so far fallen short of the rule’s intentions.
A June study published in JAMA Internal Medicine found that 83 out of 100 randomly sampled hospitals were noncompliant with at least one major requirement as of March, while a July analysis of 500 hospital websites suggested only 5.6% were fully compliant. CMS began sending warning letters to unnamed offending hospitals in April.
A similar price transparency rule for payers is slated to go live July 1, 2022.