Most hospitals falling short on price transparency: Report

Despite regulations aimed to make it easier for patients to understand hospital billing practices, most hospitals aren’t meeting their obligations, according to a new report from an advocacy group.

Most hospitals aren't meeting their obligations to comply with federal price transparency rules, according to a report from PatientRightsAdvocate.org.

PatientRightsAdvocate.org released a new report Wednesday which states that roughly 1 in 5 hospitals (21.1%) were fully compliant with federal price transparency rules. The group, which releases semi-annual reports, says it examined 2,000 hospitals in its latest analysis and found that 421 hospitals were in full compliance.

Hospital compliance on price transparency dropped substantially since the group’s last report earlier this year, which found 34.5% of hospitals were meeting their obligations under federal regulations.

Cynthia Fisher, founder and chairman of PatientRightsAdvocate.org, found the results from the new analysis disappointing.

“After nearly four years, the overwhelming majority of hospitals reviewed are still not complying with the rule requiring them to publish their discounted cash prices and all negotiated rates,” Fisher said in a statement. “By keeping their prices hidden, hospitals continue to block American consumers from their right to compare prices and protect themselves from overcharges.”

Fisher is urging federal officials to exercise more oversight and strengthen rules on price transparency.

The group also examined hospitals to see if they were meeting federal requirements to publish 300 shoppable services and procedures in a display that can be easily read by consumers or with a price estimator tool. Nearly all hospitals listed 300 services in a consumer-friendly way or via some type of price estimator tool, but 78% of hospitals were considered non-compliant because their machine-readable files were incomplete, the report stated.

Some hospitals and health systems fared better in terms of complying with price transparency regulations. More than three-quarters (78%) of Christus Health’s hospitals were in compliance, along with more than half of all hospitals owned by Baylor, Scott & White (58%) and HCA Healthcare (56%).

The report also looked at hospitals meeting obligations in price sufficiency, which tracked the availability of dollars-and-cents prices found in their files. The hospital systems faring best in price sufficiency were Prime Healthcare (90%), Baylor Scott & White (68%), and Sanford Health (59%).

The federal rules on hospital price transparency took effect Jan. 1, 2021. Under the regulations, all U.S. hospitals are required to publicly disclose what they charge for services.

The government has issued hundreds of warnings to hospitals for hospitals that aren’t meeting full obligations, and hospitals that don’t comply can be subject to penalties. Still, only 15 hospitals have been fined under the price transparency laws, and a couple of those cases are under review, according to data from the Centers for Medicare & Medicaid Services. The maximum penalty is $2 million annually.

To date, CMS has issued fines totaling more than $4 million.

A CMS analysis of hospital performance on price transparency in the first two years under the federal regulations found most hospitals were meeting their obligations. In the analysis published by Health Affairs Forefront in February 2023, 70% of hospitals offered a consumer-friendly display of services and machine-readable files, according to CMS.

The American Hospital Association has criticized PRA's reports in the past, pointing to CMS reporting that finds higher compliance. A hospital association spokesperson said the latest report doesn't accurately reflect hospital compliance with federal regulations.

"This report, as we’ve said with all of PRA’s reports, has no place in serious and accurate discussions about price transparency," the spokesperson said.

Fisher has sent a letter to President-elect Trump asking him to push hospitals to do better on price transparency. The regulations were drafted during his administration. She said the Biden administration has failed to enforce the transparency regulations and allowed hospitals to post price estimates and percentages in lieu of actual prices.

“On behalf of all American healthcare consumers, please prioritize strengthening and enforcing the hospital price transparency rule immediately upon taking office,” Fisher wrote.

Michael N. Abrams, managing partner of Numerof & Associates, tells Chief Healthcare Executive® that it’s possible Trump may take more action on hospital price transparency when he returns to the White House.

“In his first term, he is the one that passed that legislation requiring transparency on pricing from healthcare delivery organizations, which the industry has roundly rebuffed,” Abrams says. “So that may be an issue that gets revisited, actually, in this administration.”

In October, the U.S. Government Accountability Office said the CMS should do more work to ensure that hospitals are providing pricing data that is “sufficiently complete and accurate to be usable.”