Navigating Healthcare’s Price Transparency Maze: Are Hospitals Following the Rules?
A core principle of a functioning market is transparency, allowing consumers to make informed decisions based on accurate information. This principle extends to healthcare. Since 2021, the Centers for Medicare and Medicaid Services (CMS) has mandated price transparency, requiring hospitals to disclose costs for at least 300 commonly performed services. Yet, whether this policy is achieving its intended impact remains intensely debated.
A recent report by the nonprofit Patient Rights Advocate claimed a sobering statistic: only 33% of North Carolina hospitals are in compliance with the price transparency rule. This finding starkly contrasts with CMS’s recognition of 63% national compliance based on their audit.
Adding fuel to the fire, Patient Rights Advocate’s list of noncompliant hospitals eclipses the hospitals CMS has directly penalized. "The Centers for Medicare and Medicaid Services (CMS), in their November 22, 2023, OPPS Final Rule, confirmed that only CMS can make a determination as to a hospital’s compliance with the HPT (hospital price transparency) requirements," an Advocate Health spokesperson questioned the legitimacy of such lists adding to the confusion.
Despite the CMS mandate, navigating the healthcare system remains shrouded in ambiguity, exemplified by NPR’s ‘Bill of the Month’ feature, which highlights the complexity and variations encountered by patients when facing medical bills.
The true cost of a procedure is rarely upfront and clear-cut. Many patients find themselves surprised by bills, piecemeal delivery, and sometimes, charges they feel are unjustified.
“The purpose of the price transparency rule is to force accountability and integrity, to drive down the cost of care and ensure consumers are well-informed and benefitting from competition and choice," stated Cynthia Fisher, Chairman of Patient Rights Advocate. "Healthcare is the only place in our economy where prices are hidden, and bills come in pieces by mail, weeks or months later."
The discrepancy between advertised compliance and the lived experience raises important questions. Are the CMS standards the right ones? Is CMS failing to adequately enforce the rules?
Some argue that current penalties are insufficient to incentivize compliance. "CMS has not been enforcing the law," claims Fisher.
Limited Enforcement and the Illusion of Compliance
The deterrent power of penalties is debated. A minimal number – only 15 hospitals nationwide – have faced robust financial penalties since 2021. One such instance involves Betsy Johnson Hospital in Harnett County, North Carolina.
"We take compliance with these federal regulations seriously, and our teams have been committed to staying up-to-date and in compliance with the various iterations of the CMS Price Transparency Rule," affirmed Michael McAllister, spokesperson for Novant Health, which has faced numerous warnings and corrective action plan requests, highlighting the complex environment.
Yet, the effectiveness of CMS enforcement itself is questioned by some, particularly for hospitals with significant financial resources. "These hospitals are multi-billion dollar enterprises and can stand to pay a small fine," commented incoming North Carolina Treasurer Brad Briner, hinting at the need for stronger deterrents.
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Too what extent are hospitals currently able to provide the granular pricing data needed by consumers to make informed choices about their care, and what are the barriers to achieving this level of transparency?
**Interviewer:** Cynthia Fisher, Chair of Patient Rights Advocate, argues that the purpose of the price transparency rule is to drive down the cost of care and ensure consumer choice. Do you believe hospitals are truly equipped to provide the level of detailed pricing data necessary to empower consumers in this way? What role should CMS play in ensuring meaningful price transparency?
