Almost two years after a Trump-era cost transparency rule took effect, many hospitals are flouting a requirement that they post the prices for common goods and services online — with little risk of facing penalties.
Driving the news: A new report from a patient advocacy group first shared with Axios shows continued industry resistance to a rule some believed could lead to more price competition or further regulation.
The report, published today by the consumer advocacy group, PatientRightsAdvocate.org, is one of the first to compare hospital disclosures and a separate set of public pricing reports that insurers and group health plans had to start posting on July 1.
The group cross-referenced 20 price disclosures for a sample of hospitals and found that prices that hospitals omitted could be found in the insurance company files.
"Some of the prices that are found in insurance company price files appear with an 'N/A' or are blank in the corresponding hospital price lists," the group wrote. "This concrete evidence from the insurance files demonstrates that real prices exist and hospitals are flouting the hospital price transparency rule."
Details: The hospital transparency regulation went into effect in January 2021. Since then, there's been widespread evidence of industry resistance, such as a June study that found only 6% of facilities covered by the rule were totally compliant in the first six months it went into effect.
Only two hospitals in Georgia have been fined by the Centers for Medicare and Medicaid Services since the regulation went into effect. CQ Roll Call reported in June that since January 2021 CMS had issued about 352 warning letters to hospitals for non-compliance.
Both Republican and Democratic members of the House Energy and Commerce Committee have urged the Biden administration to "conduct vigorous oversight and enforce full compliance."
More insurer transparency requirements are slated to go into effect in the next two years. In 2023, insurers must share the costs of the 500 most "shoppable" health care services in a cost estimator tool, and by 2024, publicize the cost of every item and service they provide.
Between the lines: The benefits to hospitals of not sharing prices may actually outweigh the costs of the fines, Sabrina Corlette, a research professor at the Center on Health Insurance Reforms at Georgetown University told Axios.
"What happens if insurance companies, employers, regulators, legislators, media, get ahold of the prices you’re negotiating with payers?" Corlette said. "For a lot of hospitals they would prefer that that information is not disclosed since it may put them at some disadvantages to those different interested parties."
CMS may also have difficulty in enforcing compliance because there's a limit on the amount of penalties that can be imposed and resource constraints at the agency, she added.
The other side: The hospital industry says the reports of non-compliance overstate the problem.
"While hospitals press forward to help patients understand their anticipated costs for care, some outside groups are taking this opportunity to mischaracterize what is happening in the field with respect to the Hospital Price Transparency Rule," said American Hospital Association spokesperson Sean Barry in a statement to Axios.
"These groups ignore CMS' guidance on aspects of the rule and, as a result, have reached wildly different conclusions about the status of implementation across the hospital field. CMS, the only true arbiter, has indicated a much smaller number of hospitals may be out of compliance," Barry said.
CMS didn't provide a comment by deadline.
Zoom out: As federal enforcement lags, states and cities are starting to step in.
In Colorado, Gov. Jared Polis signed bipartisan legislation into law in June that prohibits hospitals or collection agencies from collecting unpaid patient bills if the facility isn't in compliance with federal transparency rules. It went into effect in August.
In New York City, Council Member Julie Menin said in September she's going to introduce bills that will add a municipal enforcement mechanism to the federal regulation.
In Pennsylvania, Democratic lawmakers in the state legislature introduced a bill in September that would also require hospitals to post a list of standard charges for each item and service it provides online.
"States can play a really critical role," Corlette said. "You can impose fines, you can make it a condition of licensure, you can make it a condition of contracting. It's pretty simple, right? The states can just say, 'We're not going to pay you unless you’re in compliance with federal law.'"
Reporter: Victoria Knight