Two years after the federal price transparency law first went into effect, only a quarter of hospitals are fully compliant with the requirements, according to a new report by Patient Rights Advocate (PRA).

Background

On Jan. 1, 2021, CMS began enforcing a price transparency rule that requires hospitals 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."

Under the rule, hospitals are also required to publicly post "discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges for at least 300 'shoppable' services."

According to a February 2022 survey from PRA, only 14% of 1,000 surveyed hospitals were fully compliant with the price transparency rule one year after it had gone into effect. The most common omission flagged for "noncompliance" was failing to post or incomplete posting of all negotiated prices for each item and service associated with the payers and plans accepted by the hospital.

In June 2022, CMS issued its first fines to noncompliant hospitals. Under the law, larger hospitals could face a maximum yearly fine of $2 million, while hospitals with fewer than 30 beds could face a maximum fine of $110,000 for lack of compliance.

How many hospitals are currently compliant with transparency rules?

In its new report, PRA analyzed data from the websites of 2,000 U.S. hospitals to determine whether they were compliant with the price transparency rule. Data from the websites was collected between Dec. 10, 2022, and Jan. 26, 2023.

Overall, only 489 hospitals, or 24.5%, were fully compliant with the rule as of February 2023. Although compliance has increased significantly since July 2021, most hospitals remain largely noncompliant with the rule.

According to PRA, most hospitals have posted pricing files to their websites, but many are "incomplete, illegible, or [do not] have prices clearly associated with both player and plan." Among the hospitals, 116 (5.8%) did not post any files and were in total noncompliance.

In addition, 21 hospitals exhibited "backsliding," meaning that PRA found them noncompliant in the current report after being assessed as compliant in a prior report. 

To improve hospital compliance rates, PRA has sent letters to both Congress and President Joe Biden suggesting improvements to the rule and stronger enforcement.

"We encourage you to consider legislation that boosts enforcement, increases penalties for noncompliance, establishes clear price disclosure standards, requires actual prices, not estimates, and demands hospital attestations to the quality and completeness of their data," wrote PRA founder and chair Cynthia Fisher.

For its part, the American Hospital Association (AHA) has argued compliance is much higher than what reports have suggested and that most findings should be taken with a grain of salt.

"As the sole arbiter of compliance, only CMS' review should be taken into consideration when determining whether and how hospitals are complying," said Ariel Levin, senior associate director of policy for AHA, adding that several studies "have misrepresented hospital compliance" by assessing them differently than CMS would. (Owens, Axios, 2/6; Patient Rights Advocate report, 2/6)