Only 14% of Hospitals Met Price Transparency Rule Compliance

February 14, 2022 - Less than 20 percent of hospitals are complying with the CMS price transparency rule that went into effect on January 1, 2021, according to a report from PatientRightsAdvocate.org.

The hospital price transparency rule requires health systems to publicly post the costs of their items and services online. The prices must include standard charges for all items and services for all payers and health plans and a standard charges list or a price estimator tool for the 300 most common services.

The policy aims to help consumers compare hospital prices and better estimate their cost of care before a hospital visit. However, compliance with the regulation has been lacking among hospitals since the rule went into effect.

PatientRightsAdvocate.org reviewed 1,000 hospitals and their websites between December 7, 2021, and January 28, 2022, to glean how many hospitals were complying with the rule.

The report builds on the nonprofit’s initial analysis of hospital compliance with the rule in July 2021, which found that out of 500 hospitals, only 5.6 percent were compliant with the rule requirements.

The most recent review found that only 143 of the 1,000 hospitals (14.3 percent) complied with all aspects of the price transparency rule, indicating that 85 percent of hospitals did not meet at least one of the price transparency requirements.

“Unfortunately, the vast majority of hospitals remain noncompliant after more than a year has passed since the hospital price transparency rule took effect,” Cynthia Fisher, founder and chairman of PatientsRightsAdvocate.org, said in a press release. “Hospitals’ omission of comparative price information in advance of care blocks consumers from benefiting from knowing the competition, seeking fair and equitable prices, and having the choice to lower their costs.”

The biggest noncompliance area was posting a complete machine-readable file of standard charges, which 85 percent of hospitals did not do. Similarly, 84.9 percent of hospitals did not provide national drug codes and the associated prices for the drugs and pharmacy items the health system offered.

Just over 600 hospitals did not publish an adequate amount of negotiated rates, while 586 hospitals did not post all payer-specific negotiated charges that the rule requires.

Compliance was slightly higher for the price estimator requirement, with 84 percent of hospitals publishing a price estimator tool. However, 20 percent of these hospitals did not allow uninsured or self-pay individuals to view discounted cash prices, which violates the rule, the survey found.

In addition, only 28 percent of the hospitals posted the 300 most common services in a consumer-accessible way. The majority of these hospitals (216) were still considered noncompliant because their standard charges files were incomplete, the report stated.

Many of the facilities in the largest hospital systems did not comply with the rule. For example, HCA Healthcare—the largest for-profit hospital system in the country—owned 188 hospitals included in the survey, and none of them complied with the requirements. HCA Healthcare, Ascension, and CommonSpirt Health owned a total of 361 hospitals in the survey, and only two of those hospitals complied with the price transparency rule, the report showed.

The CMS CY 2022 Medicare Outpatient Prospective Payment System (OPPS) rule stated that hospitals with less than 30 beds would receive penalties of $300 per day for noncompliance with the rule. Hospitals with 31 or more beds would receive $10 per bed per day, with a maximum daily penalty of $5,500. However, hospitals have yet to receive any penalties for noncompliance, according to the report.

The report noted that the Biden administration might help increase compliance by addressing the penalties for noncompliance, increasing enforcement efforts and public disclosure of noncompliant hospitals, managing the difference between actual prices and estimates, and implementing clear pricing standards.

Further, the Transparency in Coverage Rule, set to take effect in July 2022, will require payers to publicly post negotiated prices for all covered services.

“The Biden Administration has been a huge supporter of competition and transparency in healthcare,” Fisher stated. “The law unleashes the pricing data, which is the foundation of creating a functional, competitive market.  We’re confident they will deliver for the American people, holding hospitals and insurance companies accountable by increasing penalties and enforcement and refusing any additional delays to the Transparency in Coverage Rule.”