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Blog | Price Transparency

Large analysis of hospital websites finds little compliance with price transparency regulations

Blog | Price Transparency

Large analysis of hospital websites finds little compliance with price transparency regulations

Arguably the most glaring issue was the widespread absence of comprehensive lists of payer-specific negotiated rates, analysts said.

A large analysis by a patient advocacy group has found that fewer than 15% of hospitals are in compliance with federal price transparency requirements.

Conducted by PatientRightsAdvocate.org, the analysis of 1,000 hospital websites  looked for:

  • A machine-readable file for all items and services, including all associated codes, descriptions of each item or service, gross charges, discounted cash prices, de-identified negotiated minimum and maximum charges, and all payer-specific negotiated charges (including the name of the third-party payer and plan for each charge)
  • A display of prices for 300 common shoppable services either in a consumer-usable standard charges list or a price estimator tool (with tools required to include discounted cash prices for uninsured and self-pay patients)

The analysts concluded that only 14.3% of hospitals are complying with all requirements.

Key findings of the survey

The remaining 85.7% of surveyed hospitals did not include all the required information in their machine-readable files.

“The most significant finding of noncompliance is that the majority of hospitals [62.1%] did not post all payer-specific and plan-specific negotiated rates,” the analysts wrote. Issues also included incomplete or missing data fields and fields with zeros, N/As and asterisks for negotiated rates.

Of the 1,000 hospitals, 287 presented charges for 300 shoppable services in the required format. Nearly 85% of the 1,000 offered a price estimator tool, but among that group, a fifth did not allow uninsured and self-pay patients to see discounted cash prices.

“Several types of price estimator tools were offered, and their design makes it impossible for a consumer to access actual prices by procedure or code, and also inhibits the ability of consumers or developers to compare prices, scrape or parse the data within the tool,” the analysts wrote.

The tools “generally provide, nonbinding estimates (including price ranges) accompanied by disclaimers,” they added. “This practice is materially different from actual price disclosure and from an audit and assessment standpoint, impossible to equate with its permitted alternative, the 300 Shoppable List.”

Where price transparency goes from here

The IT requirements in the regulations should be more specific, according to the report.

“Implementing clear pricing standards, including uniform data file standards, will enable more efficient and reliable compliance audits and likely better serve the intent of the rule by enabling technology innovators and search engines to design online shopping tools and other services that will foster price comparison and competition,” the analysts wrote.

Noncompliance by hospitals stands to be more costly in 2022, the second year of the regulations. The penalty for noncompliance was $300 per day for all hospitals in 2021 but now is based on bed count ($300 plus $10 per each additional bed over 30), with the largest facilities owing $5,500 per day. The maximum daily rate equates to slightly more than $2 million annually.

The analysts posited that even the increased penalties might not represent enough of an incentive to comply with the regulations, especially for larger health systems. In addition, federal enforcement efforts have been spotty beyond the issuance of warning letters.

“The lack of compliance by hospitals is about more than simply the failure to follow the legal requirements,” the report states. “It is also about the failure of hospitals to provide critically needed information to consumers so they can make better health decisions. Empowered with comparative price and quality information in advance of care, consumers, including employers and unions, can improve health outcomes while lowering costs by taking advantage of the benefits of competitive market efficiencies. Moreover, known prices help prevent billing errors, overcharges and fraud.”

About the Author

Nick Hut

is a senior editor with HFMA, Westchester, Ill. (nhut@hfma.org).

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