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Compliance issues remain two years after hospital price transparency mandate

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Hospitals are still working to comply with a 2021 law that requires them to publicly post prices for the services they offer while federal regulators begin to issue fines for noncompliance.

Consumer advocates say that while progress has been made, hospitals still have work to do to ensure their prices are transparent after years of shielding them from public scrutiny. The American Hospital Association, a trade group that represents hospitals, says its members worked amid the global COVID-19 pandemic to comply with the law, which went into effect on Jan. 1, 2021.

Centers for Medicare & Medicaid Services, the federal agency charged with enforcing the Hospital Price Transparency Rule, estimated that about 70% of hospitals posted price information as required by law.

Patient Rights Advocate, a nonprofit group working for price transparency in medicine, found in its latest report that about 36% of 2,000 hospitals were in full compliance with the federal pricing rules. The group said the CMS report overestimated compliance.

CMS assessed the websites of 600 hospitals in September and November 2022. It found that more hospitals were complying with the federal rule than during its first year. Specifically, it found that 493 hospitals (82%) posted a consumer-friendly display; 490 hospitals (82%) posted a machine-readable file; and 421 hospitals (70%) did both. The 70% compliance rate for both was more than double the 27% rate from 2021, according to the agency.

Elected officials have called for the U.S. Government Accountability Office, the investigative arm of Congress, to look into compliance issues.

The Centers for Medicare & Medicaid Services also started enforcing the law. CMS had sent more than 730 warning notices and 269 requests for corrective action plans to hospitals as of April 2023. To date, it has issued slightly more than $4 million in civil monetary penalties to 14 hospitals.

Patient Rights Advocate Founder and Chair Cynthia Fisher said CMS has been slow to enforce the law and that consumers can’t shop for health care as they would for groceries, gasoline or other goods and services without improved compliance.

The group’s most recent assessment analyzed the websites of 2,000 U.S. hospitals. It found 36% of them (721) to be fully compliant with all requirements of the rule, according to the report.

“The widescale noncompliance of 64% of hospitals is due to most hospitals’ files being incomplete or not having prices clearly associated with both payer and plan,” according to the report.

That report also found that 69 hospitals posted no usable price information.

Fisher said compliance with the federal rule has improved, but the industry still has a lot more to do.

“As long as hospitals and insurance companies can hide prices and keep patients and employers that purchase plans in the dark, they can charge whatever they want,” she told The Center Square. “Every day a patient does not have access to the price, they are harmed.”

American Hospital Association President and CEO Richard Pollack took issues with what he said was misinformation about hospital compliance.

The hospital association has criticized the Patient Rights Advocate reports on compliance, noting that some of the issues PRA cited as not compliant met CMS requirements.

“There has been so much misinformation being put out by third-party groups – some of which have only a tenuous grasp of the rule’s policy and technical requirements,” he wrote in a March post on the association’s website.

Pollack said more needed to be done after the CMS report.

“While there’s no doubt that the hospital field has made significant progress, we know that more must be done,” he wrote. “Hospitals and health systems remain committed to working with CMS to implement these policies and deliver reliable and useable pricing information to patients.”

CMS has started to enforce the law, but so far that process has been slow, Fisher said.

So far, CMS has handed out 14 monetary penalties to hospitals that failed to comply with the law. Half of those penalties are under review, according to CMS. The size of the penalty is based on the number of days the hospital is out of compliance and the number of beds in the hospital.

The American Hospital Association has said parts of the federal price transparency rule are costly, complicated and of little help to patients, but the group said it supports transparency.

“The AHA supports price transparency efforts that help patients access clear, accurate cost estimates when preparing for hospital care,” according to a fact sheet on the issue. “The AHA also supports aligning federal price transparency requirements to avoid patient confusion and duplication of effort that adds unnecessary cost and burden to the health care system.”

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