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Price Transparency's Slow Burn

Analysis  |  By Alexandra Wilson Pecci  
   April 26, 2021

Despite inconsistent compliance and no enforcement, fresh signals indicate that hospitals should brace for more scrutiny on their price transparency.

It's been four months since the Centers for Medicare & Medicaid Services (CMS) price transparency mandate for hospitals went into effect, and so far, compliance has been all over the map, with no enforcement to speak of.

But there are signals lately that hospitals should expect increased attention and scrutiny, as journalists, academic researchers, lawmakers, and tech companies train their spotlights on hospital compliance.

Let's break down how each of those groups is calling attention to how hospitals are complying with the price transparency mandate.

Journalists

Much of the earliest scrutiny of hospital compliance with the price transparency mandate has come from news outlets conducting their own analyses of hospital websites and the information they find.

Among the most notable is an investigation from The Wall Street Journal which revealed that hundreds of hospitals used an embedded code to hide their price lists from online search engines.

This report prompted CMS to issue guidance in its transparency rule for payers (which will be in effect as of January 1, 2022) barring such code.

CMS said on the code-hosting platform GitHub, "To allow for search engine discoverability, neither a robots.txt file nor meta tag on the page where the files are hosted will have rules such that give instructions to web crawlers to not index the page."

Other media reports have focused on price discrepancies and noncompliance within local markets, such as Fox 10 Phoenix's look at Banner Health and a Philadelphia Inquirer report about how comparison shopping between Philadelphia hospitals is still prohibitively hard.

Academic researchers

While much of the pricing data that hospitals have posted online is either hard to find or understand, academic researchers have been doing their part to analyze it.

For instance, a study published in Health Affairs found that "of the 100 hospitals in [their] sample, 65 were unambiguously noncompliant."

Of those 65 "unambiguously noncompliant hospitals:"

  • 18% did not post any files or provide links to searchable databases that were not downloadable.
     
  • 82% either did not include the payer-specific negotiated rates with the name of payer and plan clearly associated with the charges or were in some other way noncompliant. 

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

Lawmakers

Prompted by the Wall Street Journal report about blocking prices from search engines, the Health Affairs study about widespread noncompliance, and other reports, bipartisan leaders of the House Committee on Energy and Commerce and its Subcommittee on Health wrote a letter to U.S. Health and Human Services Secretary Xavier Becerra urging the agency to conduct "vigorous oversight and enforce full compliance with the final rule."

In the letter, dated April 13, they also:

  • Urged "HHS to revisit its enforcement tools, including the amount of the civil penalty, and to conduct regular audits of hospitals for compliance."
     
  • Requested "a staff briefing on the implementation of the final rule and on the agency's audit of hospitals' compliance with the final rule."

Lawmakers are taking action at the state level in places like Texas where House Bill 2487 would make price transparency the law and impose its own penalty of up to $300 per day for noncompliance.

North Carolina State Treasurer Dale R. Folwell blasted noncompliant hospitals for their "pattern of deceit," "secret contracts," and "hidden prices," and pointed to State Health Plan Data Transparency House Bill 169 as something that would "level the playing field" for consumers.

Also, the New York State Department of Health Price Methodology Workgroup published its final recommendations for NYHealthcareCompare, an in-development price transparency website for the state.

Tech companies

There are several vendors helping health systems publish their prices.

But Turquoise Health is taking that a step further by aggregating hospital data into a consumer database and search tool that allows users to compare relative costs of care by procedure and their ZIP code.

It also awards badges to hospitals that are "Turquoise Verified," i.e., fully compliant with the price transparency rule.

"We knew that in its raw form, the way that hospitals would disclose it, [price transparency] data wouldn't be useful to patients," Chris Severn, CEO and co-founder of Turquoise Health, tells HealthLeaders.

Severn also says academic institutions and researchers are using the company's data to conduct their own independent research.

In addition, health systems can partner with Turquoise Health to comply with the rule. Its "One-Click Compliance" solution uses an organization's managed care contracts and historical claims data to power their predictions. Automation keeps the data updated year over year.

Although complying with this rule might seem like it's mostly filled with downsides, Severn advises hospitals to get onboard now, especially with the payer price transparency rule also looming. Doing so can allow health systems to "control the narrative" about their pricing before someone else controls it for them.

"We're encouraging hospitals to make the best out of this legislation," he says. "In this new world of transparent rates, they need to get ahead of that story."

Alexandra Wilson Pecci is an editor for HealthLeaders.


KEY TAKEAWAYS

Hospital pricing transparency is under increased scrutiny from journalists, academic researchers, and lawmakers.

Lawmakers at the state and federal level are blasting hospital noncompliance and calling for vigorous enforcement and additional penalties.

A new searchable database aggregates price transparency data for consumers.

Getting ahead of transparency efforts allows hospitals to 'control the narrative' around their pricing.


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