Price Transparency Rule Compliance is Growing But Needs More Oversight

More than two years after the hospital price transparency rule went into effect, provider compliance is increasing, according to a report from Turquoise Health.

The software company’s Price Transparency Impact Report for Q1 2023 examines how price transparency compliance has changed since October 2022.

More than 84 percent of hospitals have published pricing data as of Q1 2023, compared to 65 percent in Q4 2022. Over 5,300 hospitals had a machine-readable file, up from less than 2,000 during the first quarter of 2021.

Among 6,394 hospitals, 73.6 had negotiated rates posted and 70.6 percent had cash rates. Around three in four hospitals had surgery rates and imaging rates publicly available.

Turquoise Health determines hospital compliance using its price transparency scorecard.

Five stars indicate that a hospital has a complete machine-readable file that contains cash, list, and negotiated rates for a significant quantity of items and services. Four stars recognize a hospital with a mostly complete machine-readable file that shows a clear effort to address the requirements but has room for improvement.

Three stars indicate a partially complete machine-readable file that has some useful information but is still missing crucial elements, and two stars signify an incomplete machine-readable file with data that would not be useful to patients.

Almost 60 percent of hospitals received five stars and 24 percent received four stars. Only 7 percent of hospitals were issued three stars and 12 percent received two stars.

Despite the report showing progress with price transparency compliance, other research has emphasized that many hospitals are still not following the requirements.

A report from Families USA offered recommendations to CMS and Congress on improving hospital price transparency rule compliance.

CMS should ensure price transparency data is useful for consumers by establishing and requiring a standardized data format. Specifically, CMS should require hospitals to use actual prices in dollars and cents, a standard format for machine-readable files that can be analyzed by machines and people, a standard code format for services, and a standard format for payer information.

CMS should also require hospitals to publish prices for a determined set of high-cost, high-volume services provided in inpatient and outpatient settings and require quality data to be disclosed with pricing data. In addition, price transparency information should be available in languages other than English to increase accessibility.

The report also recommended that CMS improve enforcement and oversight strategies. For example, the agency should issue civil monetary penalties to non-compliant hospitals and remove the $2 million cap on fines.

CMS should prevent hospitals from posting a price estimator tool instead of posting actual negotiating rates to help limit consumer confusion. Additionally, the report suggested CMS provide quarterly updates on the number of warning letters, corrective action plans, and penalties issued with hospital names.

The report called on Congress to conduct hearings and oversight activity to identify low hospital compliance. Congress should also codify a hospital price transparency rule into law that incorporates the recommendations to CMS.