Hospitals’ compliance with the 2021 price transparency law has improved over the past year, but some operators are still reluctant to make their pricing data public or do not have the resources to do so.
As of the end of September, 65% of US hospitals have announced the rates they negotiate with commercial insurers, according to data from data aggregator Turquoise Health. That marks a significant improvement from June 2021, when researchers from Michigan State University and Johns Hopkins University found that less than half had posted machine-readable files for a price. negotiate.
However, many hospitals are not fully compliant, as identified in the Centers for Medicare and Medicaid Services’ 21-point checklist. Hospital and health system managers consider the administrative burden to be unwarranted and will not achieve the goals of the CMS.
The price transparency law for hospitals takes effect in January 2021. CMS expects data analysts to use machine-readable files to compare prices between hospitals and patients will scan consumer-friendly documents before they are taken care of. Ideally, data on the prices hospitals negotiate with payers, total costs, and cash discount prices for 300 “purchasable services” would reduce overall healthcare costs and restrict high-priced service providers. CMS threatens a maximum annual fine of more than $2 million for larger hospitals that fail to comply and nearly $110,000 for non-compliant hospitals with fewer than 30 hospital beds.
It took about 10 full-time employees at Evansville, Indiana-based Deaconess Health Systems and the help of a data analytics firm, said Rebecca Conen, 16-year revenue cycle manager. third party data throughout the year. hospital sector non-profit system.
“We tried to do it in-house, but we didn’t have enough bandwidth,” she said. “The point is to keep it up to date. It is a challenge because our contracts with insurance companies change at different intervals.”
Conen notes that third-party data aggregators’ definitions of what is most beneficial to patients and CMS compliance standards vary. “Everybody has a different view of what meets CMS compliance standards versus what is in the best interest of the patient,” she said.
Many hospital managers assume that patients rarely buy health care. If they do, they are more concerned with their out-of-pocket costs than negotiated rates, failing to capture patient comorbidities and other patient-specific characteristics, providers arguments.
“While I welcome the goal of achieving policy transparency, I do not think this legislation has achieved the desired effect in informing consumers about how much they will pay when they go to the hospital because it did not affect their specific clinical variables,” said Dr. Jeremy Cauwels, chief physician of Sanford Health, a 47-hospital network based in Sioux Falls, South Dakota.
Turquoise data shows 55% of hospitals fully compliant with transparency laws at the end of September.
However, a peer-reviewed study published earlier this month in the Journal of General Internal Medicine concluded that only 19% of a nationally representative sample of 64 hospitals met the definition of full compliance. of CMS, according to data analysis in November. However, the authors note that at least 72% of those hospitals adhere to key valuation metrics, such as disclosure of negotiated rates, totals costs, procedure description and cash discount price.
Metrics with relatively low compliance are those that contain less important information, such as compliance with naming conventions, said Ge Bai, a professor of health and accounting policy at Johns Hopkins. CMS. Bai was not part of the study but was a co-author of the related study.
While hospitals have made significant progress in implementing key elements of the price transparency law, she said, it requires hospitals to do a lot of work, especially small facilities. have been severely affected by labor shortages and other financial pressures.
“The federal government should make the compliance burden as low as possible while maintaining data usability,” Bai said.
To improve compliance, she added, CMS might consider posting a sample template for a machine-readable file with clearly labeled columns.
CMS only fined two hospitals in Georgia. The fine amounted to less than $1.1 million, which was about 0.04% of their total 2021 patient net revenue. An agency spokesman said CMS issued 437 warning notices to hospitals and 263 remedial action planning requests for hospitals that failed to correct the issues outlined in those warnings. .
Aside from Northside Hospital in Atlanta, Georgia and Northside Cherokee Hospital in Canton, Georgia, “every other hospital that has been assessed for compliance has addressed its shortcomings or is in the process of doing so. Therefore, it is not necessary for CMS to impose a penalty on any additional hospitals,” an agency spokesman said.
Going forward, CMS needs to take a more aggressive stance on penalizing hospitals and non-compliant systems, Turquoise researchers said in a report in October. The agency should also outline a specific format for hospitals to present data, they said.
Some hospitals and health systems are waiting to see if CMS enforces the strict laws before complying. Tim Gary, healthcare attorney and CEO of Crux Strategies, a consulting firm that helps hospitals and health systems deal with compliance issues, said compared to this time last year, Hospitals are making more efforts to meet the requirements.
Gary said some hospitals, especially smaller facilities, want to comply but don’t have the resources. However, some health systems argue that they would rather pay the fine than publish their prices, he said.
“This is like asking a hospital CFO for a nuclear launch code,” says Gary. “Suppliers and payers have grown up to protect these prices, which is why the payer price data is so disguised.”
CMS has tampered with pricing transparency laws for hospitals and for insurers, with the latter taking effect on July 1, 2022. The agency requires insurers to disclose information public, machine-readable file that includes the negotiated prices they pay to in-network providers and the allowed rates for out-of-network providers.
But parsing through huge data files requires complex software, and insurance companies don’t use standardized file formats, obfuscating potential comparisons.
