Price transparency in hospitals remains elusive, in spite of rule

A report from PatientRightsAdvocate.org shows that one year after a law requiring hospitals to post their real prices online went into effect, a large majority of hospitals continue to hide the cost of care from consumers.

The Semi-Annual Hospital Price Transparency Compliance Report showed that just 14.3% of the 1,000 randomly sampled hospitals are complying with a rule that went into effect Jan. 1, 2021.

According to the report, most of the hospitals’ pricing files are incomplete, with noncompliant hospitals failing to show the different prices for the same services by all insurers and plans as well as cash prices.

Only two of the 361 hospitals owned by three of the largest hospital systems were compliant with the rule. HCA Healthcare, the largest for-profit hospital system in the nation, had none of its 188 hospitals in compliance. The three largest systems account for total revenue of $120 billion, yet compliance costs is estimated at only $12,000 per hospital.

“Unfortunately, the vast majority of hospitals remain noncompliant after more than a year has passed since the Hospital Price Transparency rule took effect,” said Cynthia Fisher, founder and chairman of PatientsRightsAdvocate.org in a statement. “Hospitals’ omission of comparative price information in advance of care blocks consumers from benefiting from knowing the competition, seeking fair and equitable prices, and having the choice to lower their costs.”

The good news is the same report in July found that only 5.6% of hospitals were compliant, so 14.3% is an improvement.

In addition, the report found that only 37.9% of the hospitals posted a sufficient amount of negotiated rates, but over half were not compliant in other criteria of the rule, such as listing rates by each insurer and named plan. Also, only 0.5% of hospitals owned by the three largest hospital systems in the country – HCA Healthcare, Ascension, and CommonSpirit Health – are complying.

The Transparency in Coverage Rule, which will become law in July 2022, will require group health plans and health insurance issuers to publicly disclose negotiated prices for all covered items and services and historical payments, and disclose cost-sharing information upon request to a participant, beneficiary, or enrollee. The Transparency in Coverage Rule was originally scheduled to go into effect on Jan. 1, 2022 but was delayed after intense lobbying by the insurance industry.

The full PatientRightsAdvocate.org transparency report can be viewed here.

This article was originally published by sister publication, Medical Economics.