Experts are unimpressed by hospitals' latest price transparency moves, mainly because providers seem to have made little to no effort to make the information consumer-friendly. Providers often bury price information deep in their websites' bowels, forcing prospective patients to fill out lengthy forms for estimates or wade through unintelligible data files for rate information. Hospitals argue CMS needs to provide them with more explicit guidance, so they know what to do and how to do it. Experts largely agree.
But insiders say hospitals' apparent struggle to deliver on price transparency probably has a lot to do with their reluctance to disclose their rates. "If you really want people to get to it, you don't make them dig," Goodwin Procter partner Delphine O'Rourke said. Experts said most hospital websites aren't well-designed or consumer-friendly, so they aren't surprised.
Regardless, data about payer-negotiated rates, especially those on machine-readable files and spreadsheets on shoppable services, are not expected to be a draw among consumers, according to experts. They expect third-party data aggregators and app developers, competing providers, insurers, analysts and researchers to use it instead.
Consumers are far more likely to take advantage of price estimation tools, which come with challenges too, namely that they don't include provider fees, medication, medical equipment or homecare services. That's mostly because physicians code after a procedure based on the work done and materials used. For example, anesthesia costs for a procedure could double if a surgeon expects it to take an hour, but it takes two hours because hospitals bill anesthesia based on time.
"There's still such a disconnect between how a hospital or health system thinks about a service and the way a patient thinks about it or even defines it," said Fred Bentley, managing director for consultancy Avalere Health. "What consumers want to know, in the end, is what is it going to cost me?"
The AHA, in a Jan. 8 letter, asked HHS not to enforce the new rule, claiming hospitals were having trouble meeting the requirements because of rising COVID-19 cases and "the need to distribute multiple vaccines. … Meeting both of these challenges requires many of the same personnel who are needed to comply with the rule," the letter said.
Some hospitals had trouble preparing for the price transparency regulations because vendors didn't want to develop specific products and services until CMS offered clearer guidance, and AHA's lawsuit wrapped up. Likewise, hospitals didn't want to invest considerable time and resources to implement changes for rules that could change or never take effect. Vendors finally began to roll out solutions to help hospitals comply with the new requirements following the Trump administration's district court win over the summer. Many hospitals have been playing catch up since then.
New York-based Northwell Health failed to meet the Jan. 1 deadline to comply, not having made public the rates it negotiates with insurers as of Jan. 7. Rich Miller, its chief business strategy officer, said the organization is "actively working to comply with the current requirement." He claimed the hospital could not meet the deadline because creating a machine-readable file of negotiated rates is "a complex process" for the 19-hospital system, especially during the COVID-19 pandemic. "The number of data points (are) in the range of about 200 million," Miller said. It's an issue hospitals have complained about since the rule's inception.
Many experts aren't buying hospitals' excuses. While smaller hospitals often face significant financial and staffing constraints, even well-resourced hospitals and health systems have dropped the ball on price transparency.
"Hospitals have opposed this from the get-go. I don't think they should be facing implementation challenges," Health Care Cost Institute CEO Niall Brennan said. "These are large, multimillion, and, in many cases, multibillion-dollar corporations with very sophisticated financial accounting departments. There are ways to extract the information. The hospitals that are already complying have proven that it's not that difficult to extract and post that information."
Experts agree President-elect Joe Biden's administration will eventually enforce the rules, but they don't expect it to play a central role in Biden's healthcare agenda. It could take a while for CMS to step up enforcement because the rule's many gray areas could make it challenging to make hospitals comply, and Biden's team will need hospitals' support in fighting the pandemic.
"This is not where they want to burn their political capital and potentially alienate a critical constituency," Avalere's Bentley said.
CMS doesn't have a lot of enforcement tools in this case. The agency can fine hospitals $300 per day if they don't follow the rules, but experts said it probably wouldn't have much effect. "Given that the penalty for non-compliance is so trivial, the fact that some hospitals are complying suggests they don't think the transparency hurts their negotiating leverage, or that the transparency was going to happen anyway in a year or two when the insurer-facing transparency rule takes effect (assuming the Biden administration doesn't scrap it)," Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy, said in an email.
