Top-Ranked Hospitals Not Complying with Price Transparency Rule

Top-ranked hospitals are not complying with the CMS hospital price transparency rule, as many facilities have failed to report complete pricing data for common shoppable services, according to a report from Rice University’s Baker Institute for Public Policy.

The hospital price transparency rule requires all US hospitals to publicly post cash prices and minimum and maximum negotiated charges for 300 shoppable services.

A research team from the Baker Institute analyzed price transparency compliance among the 2020-21 US News and World Report’s 20 honor roll hospitals and 41 surrounding high-quality hospitals in July and August 2021. The team looked at pricing data for brain MRIs, abdominal ultrasounds, chest x-rays, basic metabolic panels, electrocardiograms (ECGs), and lower joint replacements.

Full price transparency compliance was inconsistent among the hospitals, the study found.

“The highest-rated hospitals are eager to pay for full-page media ads touting their high quality to patients. Yet many seem eager to hide the prices they charge from these same customers,” Vivian Ho, the James A. Baker III Institute Chair in Health Economics and lead researcher, said in a press release.

“Patients deserve to have transparent information about hospital prices, particularly since high-deductible health plans are forcing them to pay more out of pocket.”

Among the 20 honor roll hospitals, one hospital did not display any pricing data for the six shoppable services. Four hospitals did not report the cash, minimum, or maximum price for one of the services.

Only seven of the honor roll hospitals publicly posted all three prices for each of the six services, while 13 hospitals reported cash prices for all six services.

When considering both the 20 honor roll hospitals and the 41 surrounding high-quality hospitals, researchers found that 18 of the facilities posted complete pricing data for the six services. More than 80 percent of the 61 hospitals reported cash prices for each service, except for joint replacements (64 percent).

Only half of the hospitals reported the minimum and maximum negotiated prices for the services, with the prices most often found only in the downloadable data files, the report noted.

The top 20 hospitals were located in 14 different cities. In three cities, hospitals did not report minimum negotiated prices for any services.

Seven cities had at least one top-20 hospital and one or more high-quality hospitals that reported prices for one of the six services. The top-20 facility was the highest-priced facility in five out of seven cities for ECGs, three out of six cities for chest x-rays, and three out of seven cities for abdominal ultrasounds.

The top-20 hospital was less likely to be the highest-priced facility for brain MRIs (one out of six cities) and joint replacements (one out of five cities).

The researchers found that the negotiated minimum prices varied among hospitals in the same cities. For example, a top-20 hospital in St. Louis reported a minimum negotiated price of $363 for a brain MRI compared to $904 from a competitor also in St. Louis.

Additionally, one top-20 hospital in New York charged $463 for a brain MRI, while another charged $2,901.

The report also revealed that hospitals frequently charged cash prices that were significantly higher than the negotiated minimum charge. For example, the cash price for a joint replacement at New York Presbyterian Hospital was $82,485, but the minimum negotiated price was $16,704.

“Although we limited our analysis to high-quality hospitals, these results suggest that there is not always a strong relationship between price and quality for care in this facilities subgroup, and that there are potentially more opportunities for patients and insurance plan sponsors to find cost savings and high-quality care if price transparency improves,” the researchers wrote.

Hospital price transparency rule compliance has been lagging since the regulation went into effect on January 1, 2021. Hospital leaders have noted that compliance requires significant investments in resources and software, creating financial and administrative burdens.