As of last month, nearly two-thirds of the nation's largest hospitals are not in compliance with CMS's new price transparency rule. But this widespread lack of compliance may stem from hospitals' focus on addressing Covid-19, according to research published Tuesday in Health Affairs.

About the rule

According to CMS, hospitals under the new price transparency rule—which took effect in January—are required to post online "a machine-readable file…that includes all standard charges (including gross charges, discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges) for all hospital items and services." Hospitals under the rule also will have to publicly post "discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges for at least 300 'shoppable' services."

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The rule also finalized methods for CMS to monitor hospital compliance with the requirements, as well as actions the agency can take against noncompliant hospitals—including warning notices, requesting corrective action plans, and levying civil monetary penalties that could equal as much as $300 per day. CMS can also publicize penalties against noncompliant hospitals under the final rule, and hospitals will be able to appeal the penalties.

Study findings

For the study, Morgan Henderson, an economist at the Hilltop Institute, and Morgane Mouslim, a policy analyst at the same organization, aimed to assess pricing data submitted by the nation's largest hospitals. However, when they started to dig into the data, they realized that not all the data was available.

"I was surprised," Henderson said. "I was looking forward to digging into the data and writing a paper." He added, "There are always lumps and bumps with new regulations—some posted files that were empty, some were password-protected. Is this accidental; is this intentional? I have no idea, but it was surprising how much variation there was in what actually got posted."

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As a result, Henderson and Mouslim instead evaluated compliance with the rule among the largest 100 hospitals in the country, as determined by "certified bed count," between late January and early February 2021. Of the hospitals they assessed, the researchers found that 65—nearly two-thirds—were not complying with the rule. Specifically, they found that of noncompliant hospitals:

• 46 had no payer-specific rates posted, or the charges didn't include the name of the payer or plan;
• 12 failed to post any files, or they shared links to databases that were not downloadable
• 7 were noncompliant in other ways

Of the remaining 35 hospitals, Henderson and Mouslim found that 22 were compliant with the rule and 13 exceeded the rule's requirements.

Comments

Both the researchers and other industry stakeholders noted that hospitals are currently dealing with an unprecedented health care crisis amid the Covid-19 pandemic, which could have an impact on their ability to meet the rule's requirements, Modern Healthcare reports.

For instance, Henderson and Mouslim in their analysis noted that "hospitals are under strain (with Covid-19) and that complying with this regulation may be especially costly in this challenging period." The researchers acknowledged that many hospitals are in fact asking HHS to "exercise enforcement discretion with respect to the hospital price transparency rule…until the end of the public health emergency."

That said, Henderson and Mouslim wrote that they were "troubled" by how many hospitals were not in compliance, noting that because of the study's "purposefully conservative" approach toward assessing compliance, the "estimate of 65% noncompliance is almost certainly an underestimate." They encouraged "CMS to actively monitor [and incentivize] compliance," noting that they "strongly believe that compliance with this regulation is a necessary step for adding much needed price transparency into health care markets."

Separately, the American Hospital Association (AHA)—which, with other health care organizations, has filed a lawsuit against the price transparency rule—said the "subjective, oversimplified analysis" doesn't reflect hospitals' transparency efforts, nor does it recognize their work combatting the pandemic. "The same staff who would be needed to develop the lengthy machine-readable files required by HHS are also the staff who helped hospitals quickly reorient operations…for patients," AHA said (Kacik, "Transformation Hub," Modern Healthcare, 3/16; Henderson/Mouslim, Health Affairs blog, 3/16).