Most hospitals not in compliance with federal price transparency rules

The federal Hospital Price Transparency Rule, which went into effect at the beginning of 2021, has limped out of the gate, a new report has found. After three years, only 34.5% of 2,000 U.S. hospitals reviewed were in compliance, a report from Patient Rights Advocate.org (PRA) has found.

If anything, hospitals are going backwards—36% were in compliance in last year’s study by the group. A uniform system of price transparency has long been sought by consumer groups and purchasers of health care, but it has proven very difficult to actually achieve.

“With full transparency, consumers can benefit from competition to make informed decisions, protect from overcharges, billing errors, and fraud, and lower their costs,” the report said. “Employer and union plans can use pricing and claims data to improve their plan designs and direct members to lower cost, high-quality facilities. However, continued noncompliance impedes this ability. The majority of consumers are still blind to see upfront hospital prices, employer-sponsored health care premiums have increased 50% in the last decade, and 100 million Americans are in medical debt for charges they could not know in advance.”

By the numbers

The report found that only 689 hospitals (34.5%) were fully compliant with the federal transparency rule. 1,311 hospitals (65.5%) were not in full compliance with the rule. 87 hospitals (4%) were in total noncompliance.

In addition, none of the hospitals owned by the largest hospital systems were fully compliant. These include system such as HCA Healthcare, Tenet Healthcare, Providence, Kaiser Permanente, the study said. “While 98% of hospitals owned by Kaiser Permanente were found to be fully complying in our last report, Kaiser now posts multiple files for each hospital, instead of a single file as required by the rule, so none (0%) of Kaiser’s hospitals are now fully compliant.” In addition, the study found that 135 hospitals exhibited ‘backsliding,’ that is, had an assessment of Noncompliant in the new report after having been assessed as Compliant in a prior report. There was some good news. The study found substantial improvements among some health systems, including total compliance by 100% of hospitals owned by Community Health Systems (Franklin, Tennessee), 93% of hospitals owned by Christus Health (Irving, Texas), and 84% of hospitals owned by Advocate Health (Charlotte, North Carolina).

Has CMS dropped the ball?

The report puts some of the blame on federal regulators for not enforcing the rule. “These analyses imply that minimal, lenient enforcement by CMS has led most hospitals to continue to disregard the rule, blocking technology developers and consumers from being able to compare prices, benefit from competition, and be protected from overcharges,” the report said.

The study noted that CMS had acknowledge that 30% of US hospitals were not fully compliant, but also said the agency’s review did not include all requirements. “To date, CMS has only issued civil monetary penalty notices to 14 hospitals for noncompliance out of the 1,800 they claimed to be noncompliant, 0.8% of the hospitals that CMS recognized as noncompliant.

“These data suggest that CMS is not strongly enforcing the rule.”

New legislation may be needed

In a letter to President Joe Biden, PRA founder and chairman Cynthia Fisher noted that a recent Marist poll found that 94% of Americans support health care price transparency. A bipartisan group of lawmakers have introduced a bill in the Senate to pass legislation requiring more disclosure and increase annual penalties for noncompliance.

Related: Hospitals charged private insurers 254% more than Medicare paid RAND report

PRA urged Biden to support the bill. “When hospitals don’t post their prices, they can charge whatever they want. We work with patients across the country who are struggling under the weight of unexpectedly high medical bills,” Fisher said. “Fortunately, a bipartisan bill introduced in the Senate by Senators Bernie Sanders and Mike Braun—and cosponsored by several other Democrats and Republicans—would strengthen and expand current healthcare price transparency rules. The Braun-Sanders Senate Health Care PRICE Transparency Act 2.0 (S. 3548) is a bill that deserves the full support of the Biden Administration.”