Majority of largest hospitals ‘unambiguously noncompliant’ with revealing prices online: report

Dive Brief:

  • A majority of the largest hospitals are not complying with the price transparency rule that went into effect Jan. 1, according to an analysis in Health Affairs.
  • Researchers examined compliance among 100 of the nation’s largest hospitals by bed count and found that 65 were “unambiguously noncompliant,” while just 22 hospitals appeared to be in compliance or exceeded it, researchers found.
  • Twelve of the 65 noncompliant hospitals did not post any pricing files online or provided links to databases that lacked the ability to allow researchers to download the data, Health Affairs found. Fifty three of the 65 failed to post payer-specific negotiated rates that clearly defined the payer and plan associated with specific prices, or were non-compliant in another aspect.

Dive Insight:

Given the considerable industry opposition to the price transparency rule and an ongoing lawsuit against it, researchers originally suspected compliance could be “less than perfect,” but were still discouraged by their findings, the Health Affairs report published Tuesday said. 

The price transparency rule forces hospitals to unveil the secret prices they negotiate with insurers to ultimately curb the cost of healthcare. The theory is that with better pricing data consumers will shop for the best price, particularly those with high-deductible health plans, though some experts are skeptical whether that theory will play out due to the complexity of how medical care is paid for in the U.S.

Either way, the aim of the rule is dependent on hospital compliance, which many researchers in the U.S. have already pointed out is lacking — at least in their spot checking of hospital websites. The Health Affairs researchers themselves noted in their brief assessing compliance isn’t straightforward, and they had to rely on their own intuition to discern whether hospitals were posting all relevant items and services for all their payers and plans.

Though compliance is clearly not universal, the new public data illustrate the variability of medical costs across the country and even within the same hospital. A Healthcare Dive analysis of the hospital prices released Jan. 1 shows significant swings in prices for the same procedures within the same facility. 

To those steeped in healthcare, the findings may not be shocking. But experts said it offers an opportunity for employers to get serious about healthcare savings by kicking out high-cost providers. 

Hospital lobbies have fiercely opposed efforts from Washington to enact more price transparency, including the rule requiring them to reveal insurer prices that have long been kept a secret. CMS first proposed the rule, which would dramatically expand the amount of price data hospitals would have to make public, in August 2019 before finalizing it in November that year.

In a last ditch effort against the regulation’s implementation, the American Hospital Association filed a motion for an emergency stay in late December, arguing that hospitals were overwhelmed by the pandemic response and would have to divert resources from those efforts to come into compliance. 

The courts were not swayed and denied the motion, and AHA ultimately lost its challenge against the rule in appeals court.