Hospital Price Transparency Compliance Lags Nearly 20 Months Later

Just 16 percent of 2,000 hospitals reviewed as part of PatientsRightsAdvocate.org’s Semi-Annual Hospital Price Transparency Report are complying with the regulation requiring all hospitals to post their charges, including payer-specific negotiated rates.

The Hospital Price Transparency Rule went into effect on January 1, 2021. Under the Rule, hospitals must provide a single, machine-readable digital file containing standard charges for all items and services provided by the facility. The charges include gross charges, discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges.

For full hospital price transparency compliance, hospitals must also display a consumer-friendly list of at least 300 “shoppable” services, which are services consumers can schedule in advance. The list is consumer-friendly because it should be in plain language and group procedure with ancillary services.

The Hospital Price Transparency Rule aims to “establish a functional, competitive market in healthcare allowing consumers to benefit from competition and through choice lower their costs of both care and coverage,” according to PatientsRightsAdovocate.org. However, the Rule is falling short of its goals since compliance remains so law, the latest Semi-Annual Hospital Price Transparency Report indicated.

Hospital price transparency compliance has slowed significantly, the Report showed. While 16 percent of hospitals are complying nearly 20 months after the Rule’s implementation, that percentage is only up from 14.6 percent in February 2022, which was about a year after the rule’s implementation, and 5.6 percent in July 2021, about six months after implementation.

Out of the hospitals reviewed for the Report, PatientsRightsAdvocate.org reported that 5.1 percent did not post any standard charges file and were in total noncompliance with the Rule.

Additionally, none of the hospitals owned by the largest hospital systems in the country—HCA Healthcare and Ascension Health—were complying at the time of the review.

More hospitals part of the CommonSpirit Health system, however, are complying with the Rule. The Report found that 40.5 percent of the hospitals part of the second largest hospital system in the country are complying, up from just 1.14 percent in February 2022. One hospital received a $214,320 fine and the other an $833,180 fine. Depending on the hospital’s size, CMS calculates the fines based on $10 per bed per day, with a minimum penalty of $300 per day and a maximum penalty of $5,500 per day of noncompliance.

“It's alarming to see that progress on compliance with federal law on transparency has ground nearly to a stop,” Cynthia Fisher, founder and chairman of PatientsRightsAdvocate.org, said in a press release.

Fisher called for additional fines on hospitals failing to comply with the Rule. This year, CMS has started to penalize hospitals for noncompliance, including two Georgia hospitals that received fines after not answering warning notices from the federal agency. One hospital received a $214,320 fine and the other an $833,180 fine.

Hospitals with 30 or fewer beds are subject to a fine of at least $300 per day for noncompliance. Hospitals with more than 30 beds face a penalty of $10 per bed per day, with a maximum daily dollar amount of $5,500. This methodology means that some hospitals could face a fine of over $2 million for a full calendar year of noncompliance.

“With enforcement, fines, and transparent hospital accountability we will see the power shift to healthcare consumers and employers to lower costs. In this report we have outlined more than 100 hospitals that HHS could fine today based on criteria applied to the two hospitals they've previously fined. That is a great place to start,” Fisher stated.

Hospitals and health systems have reported challenges with hospital price transparency compliance. A report released in April 2022 by the health IT market research firm KLAS Research found that hospital leaders have concerns about cost, data accuracy, and pricing tool options. Leaders also cited worries that patients wouldn’t understand the pricing data required to be on display under the Rule.

Very few patients are subject to a hospital’s actual prices for items and services because they are covered by an insurance plan.

Additionally, hospitals and health systems have complained about the resources needed to comply with a rule that does not deliver a return on investment. Hospitals report being strapped for resources across their facilities after the COVID-19 pandemic.