Congress seeks stepped-up hospital price transparency enforcement as compliance issues continue to emerge

• The bipartisan leadership of a congressional committee is urging HHS to enforce price transparency rules more stringently.
• Several recent analyses have found widespread noncompliance with the new rules.
• One survey found compliance was improving over time but didn’t necessarily translate to easily usable information.

About 3 1/2 months into the era of federally mandated hospital price transparency, uncertainty lingers around compliance, enforcement and the practicality of the new regulations.

Leaders in Congress are getting impatient amid reports of haphazard compliance. The bipartisan leadership of the House Energy and Commerce Committee wrote a letter April 13 to Xavier Becerra, secretary of the U.S. Department of Health and Human Services, pressing for “vigorous” oversight and enforcement of the regulations.

The committee leaders urged HHS “to enforce the final rule to ensure hospitals are fully compliant with the disclosure requirements so that patients can readily access the price information for all items and services in an easy-to-use format.”

In mid-January, during the waning days of the Trump administration, CMS announced that it had started conducting audits of hospitals and investigating complaints about noncompliance. The agency also stated its intention to publicize hospitals that were penalized for not complying.

Becerra has said in recent congressional testimony that he supports price transparency initiatives. But for the most part, the Biden administration has been more focused on the COVID-19 pandemic and shoring up health insurance coverage than on other healthcare initiatives such as price transparency. The administration hasn’t made public any compliance-related information.

The congressional committee leaders want the pace of enforcement to accelerate and say penalizing hospitals $300 per day for noncompliance may be insufficient.

“Given the widespread noncompliance by hospitals, we urge HHS to revisit its enforcement tools, including the amount of the civil penalty, and to conduct regular audits of hospitals for compliance,” they wrote. “We also request a staff briefing on the implementation of the final rule and on the agency’s audit of hospitals’ compliance with the final rule.”

Indications of the state of compliance

The letter referenced studies showing low rates of compliance, including a Health Affairs study in which the authors found that among the nation’s 100 largest hospitals, “65 were unambiguously noncompliant” as of late January and early February.

The authors of the study, who work for the Hilltop Institute, wrote that while the strain of dealing with the pandemic may prevent hospitals from complying with every detail of the new rule, “We strongly believe that hospitals should be required to adhere to this regulation.

“As the final rule notes at several points, hospitals already have all of this information in their electronic medical record and claims processing systems; while assembling and posting these required files entails some costs, it should not be insurmountable.”

However, while CMS estimated compliance costs would amount to $15,000-$20,000, actual costs for independent hospitals could be quadruple that projection, according to estimates last year.

Not surprisingly, certain aspects of the new regulations are proving to be more difficult than others.

A Kaiser Family Foundation analysis released April 9 examined the websites of the two largest hospitals in every state and Washington, D.C., and found that while most hospitals displayed gross charges as required — for both the machine-readable file and shoppable services — only about half were providing discounted/self-pay rates.

Only a third were providing payer-specific negotiated rates in the machine-readable file and only 3% were doing so for shoppable services. Furthermore, in the machine-readable files, “it is unclear whether all participating insurers were included.”

Compliance not the same as practical information

The authors of the KFF analysis concluded, “For price transparency data to be useful in making comparisons across hospitals, data in the files would need to follow a set template, such that all hospitals use consistent file formats, billing codes, service descriptions and insurer and market naming formats.”

Analysts with Milliman had a similar takeaway after surveying data availability at 55 health systems encompassing more than 600 hospitals across 42 states.

Looking at whether hospitals were providing the machine-readable files, the analysts found improving rates of data availability during the study period, Jan. 1-March 3. Of the 55 health systems, more than two-thirds had posted files in all required categories (gross charges, discounted cash prices, payer-specific negotiated charges and de-identified minimum and maximum negotiated charges).

That finding does not indicate full compliance since the analysis didn’t check the quality of the data (only the presence of key fields) or availability of prices for shoppable services, which are permitted to be presented through a third-party tool. Furthermore, the authors noted that some of the posted files are in formats that don’t meet the definition of machine-readable.

 “There’s quite a wide range in what we found,” David Lewis, principal with Milliman, said in an interview. “You often see a different layout for each of the hospitals.”

Specifically, the authors wrote, “There is a high degree of diversity in the file layouts, with everything from very wide ‘flat’ files to very complex hierarchical structures.” In addition, while most files included at least CPT codes, some categorized price information by DRG or APG.

“If it was all in the exact same format, then you could have a template that would process everything and create those relative [price] comparisons,” Lewis said. “But because so many of the data files are different, it is more challenging.”

Lingering trepidation about the rules

Hospitals are still trying to gauge the full implications of price transparency. The variation in file types and in the formatting of data adds to the uncertainty.

“The reactions to the data have been almost as varied as the data,” Lewis said about Milliman’s clients. “There’s just so many different file formats out there and a lot of challenges people think they may pose to get relationships out of them.”

Various concerns with the new rule have arisen since it was announced in 2019. In addition to costs and the resources needed to comply, hospitals worry that consumers might not understand the context of price information.

Making price information available to competitors presents a potentially more significant issue.

“We view this transparency data as presenting opportunities and challenges,” Lewis said. “So the opportunity for hospitals — and payers also — is obviously to see what’s being paid to their competitors, but then the other side is they get to see what you’re getting paid. It’s two sides of a coin — although we get to see this information, oops, now they can see ours, too.”