Hospital Price Transparency Needs Harsher Penalties, Uniform Data Reporting

According to an expert panel, CMS should increase the maximum penalty for noncompliance with the pricing rule from $300 per day to up to $5,500 per day.

Hospital price transparency rules and penalties don't go far enough to actually control costs, according to an expert panel assembled by the Center on Health Insurance Reforms (CHIR) at Georgetown University's Health Policy Institute with funding from the Robert Wood Johnson Foundation. 

CHIR convened a meeting of 21 healthcare researchers, purchasers, and state and federal insurance regulators in June who discussed the price transparency rules. They also considered a Wakely Consulting Group review and analysis of hospital pricing data. They published their conclusions in a health policy brief.

They recommend:

• Increasing the maximum penalty for noncompliance with the pricing rule from $300 per day to up to $5,500 per day to expand the number of hospitals publishing pricing data. 
   
• Requiring hospitals to present data uniformly, through a template developed by Centers for Medicare and Medicaid Services. 
   
• Asking hospitals to display their commercial and Medicare rates side-by-side with data on clinical quality. 

The price transparency rule aimed to help consumers make informed price decisions about their healthcare, but it doesn't seem to be working the way it was intended.

First, only 9% of adults are aware that hospitals are required to disclose prices on their websites, and most aren't researching healthcare prices anyhow, a KFF Health Tracking Poll found. That's true even among chronically ill patients, who would benefit most from researching costs.

Second, a study in JAMA Internal Medicine showed that hospitals are choosing which parts of the rule to comply with, and that partial compliance is common.

Third, an analysis by Health System Tracker, a partnership of Peterson Center on Healthcare and the Kaiser Family Foundation, found that "apples-to-apples" price comparisons across hospitals is next to impossible because the data is so muddied and changes so frequently.