August 3, 2021
Hospital Spotting: How New Price Transparency Regs Spawned a New Cottage Industry
A conversation overheard at an evening reception during a recent healthcare industry conference:
- Attendee one: “So, what do you do?”
- Attendee two: “I research and report hospital compliance with the new price transparency regs.”
- Attendee one: “Me, too!”
OK, that didn’t really happen, but it could have and likely will happen at a major healthcare event soon.
That’s because the new hospital price transparency regulations, which took on Jan. 1, have spawned a new cottage industry in healthcare, and that’s researching, monitoring, reporting and publishing how well hospitals are complying with the new regs.
It’s simple. All you have to do is go to a hospital’s publicly available website and see if you can easily find a consumer-friendly list of standard charges for a limited set of shoppable medical services or easily find the following seven data elements, which I copied and pasted below directly from the Federal Register, in a machine-readable format to view, download or export.
- Description of each item or service provided by the hospital.
- Gross charge that applies to each individual item or service when provided in, as applicable, the hospital inpatient setting and outpatient department setting.
- Payer-specific negotiated charge that applies to each item or service when provided in, as applicable, the hospital inpatient setting and outpatient department setting. Each payer-specific negotiated charge must be clearly associated with the name of the third-party payer and plan.
- De-identified minimum negotiated charge that applies to each item or service when provided in, as applicable, the hospital inpatient setting and outpatient department setting.
- De-identified maximum negotiated charge that applies to each item or service when provided in, as applicable, the hospital inpatient setting and outpatient department setting.
- Discounted cash price that applies to each item or service when provided in, as applicable, the hospital inpatient setting and outpatient department setting.
- Any code used by the hospital for purposes of accounting or billing for the item or service, including, but not limited to, the Current Procedural Terminology (CPT) code, the Healthcare Common Procedure Coding System (HCPCS) code, the Diagnosis Related Group (DRG), the National Drug Code (NDC), or other common payer identifier.
If it’s not on the website, you can’t easily find it, you can’t download it, it’s not consumer-friendly or if any of the data elements are missing, that hospital is out of compliance. Gotcha!
In the six months since the new regs took effect, we’ve been entertained by a flood of reports, surveys and published research all demonstrating how poorly hospitals are following the new requirements. Most are either violating the letter of the law or the spirit of the law. Here’s a sampling.
- In February, Guidehouse released the results of its analysis of the websites of more than 1,000 hospitals in 27 states. You can download the analysis here. Guidehouse found that 52 percent of hospitals didn’t comply with the machine-readable requirement, and 40 percent didn’t comply with the consumer-friendly requirement.
- In March, researchers from the Hilltop Institute published a study in Health Affairs on compliance with the new regs by the country’s 100 largest hospitals. You can download the study here. The researchers found that 65 of the 100 hospitals were “unambiguously noncompliant” with the transparency requirements. Fifty-three of the 65 didn’t include payer-specific negotiated rates and the other 12 didn’t have any searchable or downloadable files.
- Also, in March, the Texas Public Policy Foundation released its first Hospital Price Transparency Compliance Index, which you can download here. The index offers a state-by-state ranking of hospital compliance with the new regs. Compliance ranged from a high of 100 percent in Rhode Island to just 16 percent in Maine.
- In April, the Health Care Cost Institute published the results of its “cursory” look at hospital compliance with the new transparency regs by 222 hospitals operated by 16 different health systems. You can download the cursory look here. The HCCI found that about 48 percent of the hospitals didn’t publish their negotiated rates with payers in any manner or format.
- Also, in April, the Kaiser Family Foundation released an analysis of hospital compliance with the new price transparency regs by the two largest hospitals in each state and the District of Columbia. You can download the analysis here. Eighty of the 102 hospitals in the study pool gave consumers gross charges in a consumer-friendly format. But only three gave consumers payer-negotiated rates in a consumer-friendly format.
- In May, researchers from the University of Texas Southwestern Medical School, Johns Hopkins University, William Carey College of Osteopathic Medicine and Southern Methodist University published a research letter in JAMA Network Open about what they found after looking at the websites of 5,288 hospitals just prior to the new transparency regulations taking effect. (Remember, hospitals knew for two years that this was coming.) You can download the study here. They found that 52 percent of the hospitals didn’t have a charge master in a machine-readable format on their website, and those that did made consumers click as many as eight times to find it from their homepage.
- In June, researchers from Harvard, Yale and Brigham and Women’s Hospital in Boston published a research letter in JAMA Internal Medicine on their compliance study of 100 randomly selected hospitals and 100 hospitals with the highest gross revenues in 2017. You can download the study here. Of the 100 randomly selected hospitals, 83 were out of compliance with at least one of the major requirements of the price transparency regs. Of the 100 hospitals with the highest gross revenues, 75 were out of compliance with at least one of the big regulatory to-dos.
- And in July, Patient Rights Advocacy released its first Semi-Annual Hospital Price Transparency Compliance Report. You can download the 25-page report here. Of 500 hospitals randomly selected by the patient advocacy group, just 5.6 percent were fully compliant with the new regulations, the report said. About 40 percent did not publish any discounted cash prices.
Two things are pretty clear to me from this lengthy reading list.
First, most hospitals have a long way to go before being in full compliance with all the provisions of the new price transparency regulations. It’s why the Biden administration has proposed increasing the daily noncompliance fines from $300 to $5,500 for hospitals with more than 30 beds.
Second, health services researchers, patient advocacy groups, foundations, business coalitions, national media outlets, local newspapers and others are not going to stop researching, monitoring, reporting and publishing data on hospital compliance with the new regulations any time soon. Like I said at the top, it’s a new cottage industry.
The only way hospitals and health systems are going to put this new cottage industry out of business is by fully embracing the new regulations, complying with both the letter and spirit of the regulations and accepting and allowing healthcare consumerism into their hearts.
If not, brace yourselves for a raft of “a year after the new hospital price transparency took effect” stories in January.
Thanks for reading.