The Centers for Medicare and Medicaid Services (CMS) price transparency rule went into effect on January 1st. The rule, which requires that hospitals disclose prices of basic procedures in searchable files or consumer-friendly interfaces, was met with uncertainty and criticism from hospitals and other stakeholders for being too strict a requirement especially during a pandemic.
Most hospitals have opted to provide consumer-friendly files in spreadsheet and searchable PDF format instead of creating price comparison apps or websites. According to Becker’s Hospital Review, the consulting firm Guidehouse analyzed more than a thousand providers across 27 states and found that nearly 30% of providers did not provide either form of compliance.
In Arizona, the Tucson Medical Center and Banner Health both provide compliant price-transparency interfaces in addition to machine-readable files on their websites for patients wishing to search through shoppable services and compare pricing. Northern Arizona Healthcare and Yuma Regional Medical Center only have access to quotes via telephone or direct pay price transparency lists in PDF format.
Of 6,000 reviewed hospitals, only 2,000 were highly transparent in posting their negotiated rates, according to Fierce Healthcare. Software company Turquoise Health created a grading tool for hospital compliance based on a five star system. Hospitals with five stars had shoppable service tools or machine-readable files with negotiated rates that included cash and commercial plans. Nearly 1,000 of the hospitals surveyed had not provided any compliance measure with the rule.
Larger hospitals and health systems like Banner Health were more likely to fully comply with the price transparency rule, according to RevCycle Intelligence. Many hospitals pointed to constraints and limited understanding as reasons for noncompliance. From Guidehouse via RevCycle:
For providers, there will be improved compliance as resource constraints lessen with the help of further clarity, standardization, and/or automation to become compliant. However, having a strategic plan to mitigate risks and capitalize on the benefits of appropriate compliance is key. Risks include price scrutiny and pressure from payers, media, consumers and competitors, such as if current pricing and rates are rational and defensible. On the flip side, positive press and a commitment to transparency increases visibility and consumer trust.
According to Becker’s Hospital Review, the rule could have positive effects for consumers that were not included in consideration prior to the rule going into effect. Patient advocacy expert Jackson Williams, vice president of public policy at Dialysis Patient Citizens said that hospitals demand that uninsured or out-of-network patients pay for services based on list price.
Until the rule went into effect, patients couldn’t prove negotiated prices in court and would have to locate claims that showed paid amounts from third-party sources. Now, courts can take judicial notice of hospitals’ price disclosures lending to a patient’s ability to make the argument against inflated hospital charges.