Many Hospitals Still Non-Compliant with Price Transparency

March 15, 2021 By: Quadax

Resource constraints, lack of understanding, competitor response sited as top reasons.

To understand how hospitals are faring, Guidehouse recently analyzed compliance for more than 1,000 providers across 27 states. Based on now publicly available data from provider websites, Guidehouse scanned for each of the five standard charges to be present in at least one of the files.

If the file was present and the provider had all or some form of the standard charges, they were deemed to be compliant. If no requirements were met, they were not compliant.

Consumer-friendly file – 60% were complaint; 40% were not.
Machine-readable file – 48% were compliant; 52% were not.

Overall, most providers were compliant with at least one of the file types, though approximately 30% of providers were not compliant for either. 

Larger hospitals and health systems were most likely to be compliant and are using existing tools (i.e., MyChart) to meet the requirements via the consumer-friendly shoppable services file.

For those hospitals that are compliant with the machine-readable file, there is a general lack of consistency in format and content, making it difficult for anyone (e.g., CMS, providers, payers) to scan, consolidate, and derive insights without significant data transformation and enhancements.

It’s an ongoing challenge for all.

For providers, there will be improved compliance as resource constraints lessen with the help of further clarity, standardization, and/or automation to become compliant. However, having a strategic plan to mitigate risks and capitalize on the benefits of appropriate compliance is key. Risks include price scrutiny and pressure from payers, media, consumers, and competitors, such as if current pricing and rates are rational and defensible. On the flip side, positive press and a commitment to transparency increases visibility and consumer trust.

CMS has the herculean task to audit all providers for compliance and enforce corrective actions (i.e., $300 per day, per hospital), when necessary. As CMS continues to monitor and enforce the ruling, listening to feedback, answering questions, and standardizing the mechanics of files to drive consistency will be critical for such a broad-based auditing.

Large insurance carriers are already scanning the market to add to their market intelligence of reimbursement relative to key competitors. Specifically, national carriers (e.g., Blue Cross, UnitedHealthcare, Cigna, and Aetna) are particularly interested in this data. This will likely continue to be a focus of their competitive intelligence with increased investment in AI-enabled tools and other resources to mine this data. Payers need to understand how to derive actionable insights from the data.

Consumers will become much more informed around out-of-pocket costs over time. Ultimately, the average consumer of healthcare services will prefer the patient estimator tool to get the clearest picture of what they can expect their out-of-pocket costs to be. The challenge will be how the data are presented to patients to ensure full understanding and/or limitations of the estimates, and how it impacts their choices.

Why are hospitals not compliant?

Hospitals that are not compliant have expressed they either have significant resource constraints (COVID-19 or otherwise), a lack of understanding of the ruling, and/or are waiting to see what their competitors are doing.

In addition, the penalty does not have carry enough weight, according to some critics. The consequence for failing to comply with the rule is a $300 fine per day, which some critics called peanuts.

The lack of compliance makes it difficult to make meaningful comparisons within a single region of competitors and across markets in the U.S. Plus, there is no central repository for all the data, forcing researchers to hunt and peck around thousands of hospital websites to find the information.

In January, shortly after the policy went into effect, CMS said it was auditing a sample of hospitals and probing complaints it had received about noncompliance. More recently, when asked if any hospital had faced a penalty for failing to comply with the requirement, a CMS spokesperson replied, "This matter is currently under CMS review. CMS looks forward to sharing additional information about this program soon." 

The Biden administration has yet to comment on its plan for enforcing the hospital price transparency rule finalized under the previous administration.

What are you waiting for?

If you’re struggling with price transparency, Quadax can help. You can quickly deploy secure, compliant and user-friendly web pages where patients can interactively explore shoppable services and create personalized estimates with Payer Price Transparency.

Ensure compliance by:

  • Rapidly deploying organizational branding and disclaimers to your website for a seamless user experience.
  • Customizing shoppable services and pricing that is required to be displayed.
  • Enriching the patient experience with an easy-to-use, personalized pricing calculator. 
  • Tracking & learning from patient-submitted estimate data.

Need help getting started? Schedule a strategy call here.

Let’s take on the revenue cycle together!


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