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Largest Hospital Networks Fail Price Transparency Tests

Insights by Xtelligent Media analysis of largest US hospital systems finds gaps in hospital price transparency compliance.

Source: Getty Images

- The largest hospital networks are failing to comply with the Price Transparency Rule two years into its implementation. A review conducted by Insights at Xtelligent Media found that hospitals from five of the largest health networks were lacking key price transparency instruments outlined in the final rule. Analysis of machine-readable files and shoppable service lists point to several errors that must be corrected for these networks to reach compliance. 

The Centers for Medicare and Medicaid (CMS) finalized their Hospital Price Transparency Rule two years ago this November. Price Transparency is an important step toward reducing healthcare costs for patients because it gives consumers information that allows them to make educated choices when selecting providers. Besides improving consumer choice, price transparency is also expected to increase competition in the provider marketplace.

Other independent research has shown that most hospitals were struggling to comply with the price transparency rule. One study from July found that 94 percent of hospitals were not compliant, with many struggling to publish their price data. Compliance issues also occurred among the largest hospitals where resources were ostensibly higher.

The rule’s key provisions are listed on the CMS website. To increase price transparency, standard charges must be listed prominently in two different ways:

  1. A single machine-readable digital file containing the following standard charges for all items and services provided by the hospital: gross charges, discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges.
  2. A display of at least 300 “shoppable services” (or as many as the hospital provides if less than 300) that a health care consumer can schedule in advance. Must contain plain language descriptions of the services, group them with ancillary services, and provide discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges.

To gain a general understanding of where companies were failing, Insights looked at 100 random hospitals in addition to five hospitals from ten different large networks. The hospital networks include Cleveland Clinic, Dignity Health, CommonSpirit Health, HCA Healthcare, and others. Observations from these hospitals and hospital systems showed three common mistakes in price transparency reporting:

  1. Machine-readable files and shoppable services were often inaccessible without special software programs, or they were not visible on the site.
  2. Patients were forced to provide personally identifiable information in exchange for price transparency data.
  3. Machine-readable files failed to provide the specified types of charges listed in the rule.

Hospital networks generally use similar systems for each hospital in their organization. Data on these hospital webpages showed that nine of ten large networks have invested in price estimator tools.

Estimator tools are compliant per the language of the rule; however, these tools cannot require that patients provide personally identifiable information in exchange for an estimate. Hospitals from networks including Dignity Health, LifePoint Health, and CommonSpirit Health all required that patients provide some form of personally identifiable information like name or birthdate to receive a cost estimate.

Most of Community Health System’s hospitals had compliant cost estimator tools, but some of their hospitals required insurance member ID or other personally identifiable information to get estimates. The same was true for one of Trinity Health’s locations.

Other large networks with price estimator tools did not require information other than an insurance provider and procedure name.

Price transparency also requires that hospitals provide patients with multiple different charges for each service included in their standard charge list. Multiple hospital facilities from Dignity Health, HCA Healthcare, and CommonSpirit offered only a single price or insufficient pricing information for each service. Compliant hospital networks listed price data and negotiated rates for most services, with some hospitals listing 19 negotiated rates for each service.

Among the 100 random hospitals and a smaller number of large system hospitals, some standard charges were accessible but difficult to read on an average computer.

An example of one hospital's machine-readable file.
An example of one hospital's machine-readable file.

Source: Xtelligent Healthcare Media

The discrepancy between lists of standard charges is a problem for patients trying to compare different hospital facilities. When hospitals fail to offer negotiated rates between payers or discounted cash prices the purpose of the rule is defeated altogether.

Compliance for hospitals is still lacking two years after the final Price Transparency Rule was published. To remedy non-compliance, hospital networks should first assure that their member hospitals are using price estimator tools that do not require personally identifiable information. Hospitals should also continue to update their standard charge information so that consumers can compare negotiated rates and make informed decisions.

Going forward, new rules for noncompliance will push hospitals towards proper price transparency, or they will face steep penalties. For large hospital systems, this may be the motivation needed to finally reach compliance.

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