94% of Hospitals Noncompliant with Hospital Price Transparency Rule

Only 5.6 percent of hospitals are compliant with the hospital price transparency rule just over six months after its implementation, according to a report on 500 randomly selected US hospitals conducted by PatientRightsAdvocate.org.

The hospital price transparency rule requires hospitals to display files on their websites containing gross charges, payer-specific negotiated charges, discounted cash prices, and deidentified minimum and maximum negotiated charges. All hospitals also must display at least 300 shoppable services that a healthcare consumer may schedule in advance.

Approximately 80 percent of the 500 hospitals in the PatientRightsAdvocate.org report failed to publish payer-specific negotiated charges as the rule requires, and over half did not publish any negotiated rates at all. Additionally, 39 percent did not publish any discounted cash prices.

Researchers identified a hospital as noncompliant if it omitted any of the five criteria imposed by the rule, if data fields were blank, if it did not post all negotiated payer rates, or if the hospital’s price estimator tool did not show both the negotiated rates and discounted cash prices.

“The majority of noncompliant failures were the result of non-posting or incomplete posting of the negotiated prices clearly associated with all of the payers and plans accepted by the hospital,” the report stated.

“The second significant failure was due to a lack of publishing the full list of discounted cash prices.”

The report stressed the need for better enforcement of the price transparency rule, as well as clearer requirements for the list of 300 shoppable services. It also suggested that HHS require hospitals to post actual prices instead of just providing a price estimator tool. In addition, the report emphasized the need for clear pricing data standards to truly empower consumers.

Advocates viewed CMS’s hospital price transparency rule as a win for patients across the country when it went into effect on January 1st. It allows patients to shop around for the most optimal care and ideally facilitates a more positive patient experience.

However, recent research has shown that awareness of the hospital price transparency rule is extremely low and may contribute to confusion over healthcare costs. Only one in ten adults are aware that hospitals must disclose prices, according to a KFF Health Track poll.

The recently proposed calendar year (CY) 2022 Medicare Outpatient Prospective Payment System (OPPS) rule aims to combat noncompliance by increasing the penalty charges that CMS can impose on noncompliant hospitals.

If finalized, the OPPS rule would mean that hospitals could incur costs upwards of $2 million for a full year of noncompliance with the price transparency rule.

A recent survey also from PatientrightsAdvocate.org suggested that consumers largely support the government in enforcing price transparency measures. Over half of respondents in the survey of over 2,000 US adults reported feeling like they or a close family member were overcharged for medical care.

More than 80 percent of respondents believed that cutting healthcare costs and improving quality metrics should be a priority for lawmakers. Most respondents also supported increasing the penalty for noncompliant hospitals, a measure that may be adopted if the OPPS rule is finalized as is.

"The Hospital Price Transparency rule has the potential to shift the power away from hospitals and into the hands of consumers – meaning patients, employers and union sponsored plans,” Cynthia Fisher, founder and chairman of PatientRightsAdvocate.org, said in a press release. 

“If hospitals comply, the transparency rule will drive down the cost of care and coverage.”