Hospital compliance with price transparency rules remains below 50%

Compliance with recent hospital price transparency rules varies widely by state, from 25% or lower in some states to 75% or higher in others. Overall, more than half of hospitals were not compliant with the new federal rule that went into effect January 1 this year, according to research by the Johns Hopkins Bloomberg School of Public Health.

The study ranked publicly available hospital compliance information for all 50 states, the District of Columbia and 305 geographic regions. The researchers based their analysis on files from more than 3,500 U.S. hospitals in the first five months of 2021.

At least three-fourths of hospitals were compliant in the District of Columbia, Hawaii, Rhode Island, Indiana and Michigan. By contrast, 25% of hospitals at most were compliant in Delaware, Maryland, Washington and Louisiana. A hospital’s compliance status was strongly associated with the average compliance level of peer hospitals in the same regional market. A hospital would be 42% more likely to be compliant if all other hospitals in the same geographic region were compliant as well.

“The findings suggest that hospitals do not make decisions in isolation; rather, their decisions reflect market pressure from their peers,” said Ge Bai, Ph.D., a professor in the Department of Health Policy and Management at the Bloomberg School and senior author of the report. “If the average compliance status in the same region is high, a hospital is more likely to comply.”

The Hospital Price Transparency Rule, managed by the Centers for Medicare and Medicaid Services, requires individual hospitals to provide clear pricing information online about the services they provide. The information must be posted in a file format that can be imported or read into a computer system. Hospitals also must include standard pricing for at least 300 services, ranging from colonoscopies to CAT scans. Hospitals are not required to disclose prices for emergency services under the new rule.

The rule is designed to allow consumers to compare prices and estimated cost of services. It also can help patients make more-informed decisions about care, increase hospital competition and potentially drive down costs. Non-compliant hospitals can face penalties of up to $2 million a year until they share pricing information in compliance with the new requirements.

A hospital’s health information technology preparedness, defined as the proportion of a hospital’s fixed assets devoted to health IT purposes, also is associated with greater compliance. “Interestingly, hospitals that have invested more in health IT are more likely to post their pricing information online,” Bai said. “This could be because they have more financial resources and personnel to mitigate the cost for implementing the Price Transparency Rule.”