New Studies Provide More Ammunition for Healthcare Price Transparency Fight

A new JAMA study finds that only about 20 percent of American hospitals are complying with the hospital price transparency rule that took effect earlier this year. The JAMA findings align with research from PatientRightsAdvocate.org and other recent studies published by Health Affairs and the Kaiser Family Foundation showing widespread hospital noncompliance. The study examines whether hospitals are following the rule based on a series of compliance metrics, including publishing discounted cash prices and payer-specific negotiated rates. (See chart below.)

Gondi S, Beckman AL, Ofoje AA, Hinkes P, McWilliams JM. Early Hospital Compliance With Federal Requirements for Price Transparency. JAMA Intern Med. Published online June 14, 2021. doi:10.1001/jamainternmed.2021.2531

"Policymakers could consider several strategies to increase compliance," argue the JAMA paper's authors, "including stiffer penalties, technical assistance, and public reporting of noncompliance." Recently, PRA sent HHS Secretary Xavier Becerra a letter recommending higher penalties, robust and timely enforcement, clear standards to unleash actual price information, and hospital duty to inform patients of real prices before care. PRA also recommends HHS forbid hospitals from using price estimator tools, which don't protect patients from high after-the-fact bills, in favor of actual, upfront prices that provide patients with financial certainty and the ability to shop for the best care at the best prices.

Another new study -- this one from Johns Hopkins University researchers -- shows why full compliance with the price transparency rule is so important. It finds that American hospitals' list prices are, on average, seven times more than their costs. Few healthcare consumers actually pay these chargemaster rates, but other research demonstrates pervasive overcharging in terms of what patients actually pay for care. In 2020, the RAND Corporation released a study analyzing actual prices paid to hospitals. It found that hospitals charge 247 percent of the Medicare rate for the same care. At many hospitals throughout the country, this premium increases to 400 percent of what Medicare pays.

These new studies provide more ammunition for the healthcare price transparency fight.

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