KFF Study: Hospital Price Transparency Data Messy, Inconsistent

February 14, 2023 - Hospital price transparency data shared with the public is lacking in quality, challenging the usefulness of the information, according to Kaiser Family Foundation (KFF).

KFF analyzed hospital price transparency data compiled by Turquoise Health to evaluate the quality and usefulness of the information. Patients and researchers are meant to use the data shared by hospitals to compare prices across facilities and payers.

However, the data as it stands now does not facilitate price comparisons, KFF reported. The information shared by hospitals is “messy, inconsistent and confusing,” the organization said.

The study of hospital price transparency data showed inconsistencies in how the data connect specific services with prices, particularly for episodes of care. For example, researchers found that negotiated rates attached to a treatment episode for a hip or knee replacement might correspond to a per diem charge instead of an entire episode of care.

The quality of the data also varied, with some negotiated rates being questionably high or low depending on the service. Additionally, crucial pieces of pricing information were missing, such as contracting method and payer class (i.e., Medicare, Medicaid, or commercial).

 KFF said that the issues with hospital price transparency data are not necessarily from a lack of compliance. The most recent data from PatientRightsAdvocate.org, which has tracked hospital price transparency rule compliance, shows that less than a quarter of hospitals are complying with all requirements.

Instead, KFF emphasized CMS’ hospital price transparency rule’s “shortcomings in facilitating price comparisons.”

“The issues discussed above result primarily from the way the rule is crafted, particularly from the lack of specificity and uniformity about what should be included with each charge in their machine-readable files and how that information should be laid out,” the study stated.

“There are no standards for what needs to be included in the description or whether codes should include commonly used modifiers,” it continued. “Although providers are required to include de-identified minimum and maximum negotiated charges, lack of standardization for how these are labeled in the data result in difficult isolation of these values for use in further analysis.”

Researchers suggested “consistent specification” of certain data elements in order to make hospital price transparency data more useful for patients and researchers. Those elements include “the charge’s applicable hospital setting (inpatient or outpatient), charge type (facility or professional), associated charge modifiers that affect pricing or payment of a service, the time period covered, any bundles the charge is a part of, the health plan type, and how the charge differs from the base rate.”

Hospitals have had to post their standard charges on their websites for the past two years. The charges, which include gross charges, discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges, must be in a machine-readable file, according to CMS. The federal agency also requires hospitals to post a consumer-friendly list of at least 300 shoppable services.

CMS has recently published hospital price transparency rule resources, including data dictionaries and data format layouts for some machine-readable formats. The resources could address the issues uncovered by the KFF study. However, the use of the resources is voluntary, KFF pointed out.

“Until there is more standardization in how machine-readable files are organized and made available, analysis of these data will be challenging. More fundamental issues surrounding what is included in a negotiated charge remain,” the study concluded.