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Analysis: CMS Price Transparency Rule Not Working as Intended

Analysis  |  By Alexandra Wilson Pecci  
   April 15, 2021

Making "apples-to-apples" price comparisons across hospitals is next to impossible because the data is so muddied and changes so frequently.

Spotty compliance, inconsistent data, and hard-to-understand information means that so far, the CMS hospital price transparency rule doesn't seem to be meeting its objective to help consumers get a clearer picture of their healthcare costs.

A new analysis by Health System Tracker, a partnership of Peterson Center on Healthcare and the Kaiser Family Foundation, examined the websites of the two largest hospitals in each state and the District of Columbia.

In addition, the analysis showed that prices for the same service sometimes vary widely even within a single hospital because of variations by specific payer and market segments.

The researchers point to University of New Mexico Hospitals, where negotiated rates for an MRI of the lower spine range from $486-$1,821 in the private insurance market; from $221-$331 for Medicare Advantage plans; and from $350-$485 for Medicaid managed care plans.

They also found that making "apples-to-apples" price comparisons across hospitals—which is ostensibly what the rule aimed for—is next to impossible because the data is so muddied and changes so frequently. It's also often hard to find and understand.

For instance, in many cases, it's unclear whether the estimated price include the professional fee; whether the hospital distinguished the price difference between inpatient and outpatient care; and how a hospital measures price.

In addition, some price estimates differed between the same hospital's consumer tool and its machine-readable file. Plus, the information in many machine-readable files was incomplete.

"Anyone attempting to make comparisons across hospitals using these data should therefore exercise caution," the authors wrote.

Among the other findings:

  • Most hospitals provided some price information (such as the gross charge) but didn't provide payer-specific negotiated rates for their services.
  • Only three hospitals in the sample provided payer-specific negotiated rates on their consumer tools without also requiring a patient's personally identifying information (such as insurance membership details).
  • 35 of the hospitals provided payer-negotiated rates on a machine-readable file, but it's unclear whether all participating insurers were included.
  • In some machine-readable files, hospitals provided payer names but did not include other details like negotiated rates, the associated plan name, or market.
  • About 3 out of 4 hospitals provided gross charges for services.

All of this means that the price transparency rule cannot work as it's intended unless there's standardization.

"For price transparency data to be useful in making comparisons across hospitals, data in the files would need to follow a set template, such that all hospitals use consistent file formats, billing codes, service descriptions, and insurer and market naming formats," the researchers said.

Alexandra Wilson Pecci is an editor for HealthLeaders.

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