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Over Two-Thirds of Hospitals are Noncompliant with Joint Replacement Price Transparency

Analysis  |  By Jay Asser  
   June 30, 2022

Despite CMS implementing a price transparency mandate, most hospitals are failing to comply when it comes to Total Joint Arthroplasty (TJA) procedures.

Hospitals are falling short of compliance on the price transparency mandate when it comes to two of the most common inpatient procedures.

According to a study by Clinical Orthopaedics and Related Research, only 32% of hospitals were fully compliant with price transparency on knee and hip replacement, or TJA.

When breaking down the results by individual procedures, 21% and 18% of hospitals provided the required information to be compliant for CPT codes 27447 and 27130, respectively, while 18% and 19% of hospitals did so for DRG codes 469 and 470.

Since the price transparency rule went into effect on January 1, 2021, CMS requires hospitals to provide five types of online price information for selected services: the total charge, the charges the hospital privately negotiated with health insurers, the minimum and maximum negotiated charges, and the amount the facility is willing to accept in cash.

Researchers of the study stated they chose to investigate price transparency for TJA procedures because of how widely used they are, making it some of the most commonly sought-after pricing information for orthopedic surgery patients.

The low compliance rates found in the study suggest hospitals are either struggling to implement the necessary changes to be compliant or are willfully ignoring the mandate.

"It is possible that hospitals have delayed compliance with the hope that related requirements may change or that current delays in enforcement may continue," the authors wrote. "Although it is unclear whether legislation will change, the low rates of compliance demonstrated in our analysis should encourage hospitals to provide related information to avoid penalties expected to be enforced starting July 1, 2022."

The study looked at 400 hospitals in December 2021 and searched each hospital's website for a machine-readable file providing the five requirements for compliance. The researchers also considered hospitals pseudocompliant if they provided some type of gross price information.

The pseudocompliance rates were moderately higher, with 36% and 31% of hospitals offering total charges for CPT codes 27447 and 27130, respectively, and 34% and 50% of hospitals doing so for DRG codes 469 and 470.

Additionally, 13% of hospitals failed to provide machine-readable files, while 21% required users to provide personal information.

A recent JAMA study highlighted hospitals' avoidance of price transparency, with the findings showing roughly 51% of facilities did provide either a machine-readable file or a shoppable display.

Only two hospitals, Northside Hospital Atlanta and Northside Hospital Cherokee, have so far been fined by CMS for failing to comply with price transparency requirements.

More fines are expected, but the authors of the TJA study believe hospitals should not only act to comply for the sake of their wallets, but also for the sake of their patients.

"Given the potential influence compliance and price sharing may have on empowering patients’ healthcare decisions and reducing healthcare expenditures in the United States, hospitals should use our analysis to identify where their compliance is lacking and to understand how to make their pricing information more readily available and comprehendible for the patients that they serve," the researchers concluded.

Jay Asser is the contributing editor for strategy at HealthLeaders. 

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