Federal Government Steps up Pressure on Hospitals to Disclose Prices

The Centers for Medicare & Medicaid Services is cracking down harder on hospitals that still haven’t complied with the Hospital Price Transparency law.

It’s been more than two years since it went into effect, mandating hospitals post pricing information online so customers can easily find out how much medical procedures or services cost before making a health care appointment. Despite that, consumer group PatientRightsAdvocate.Org says its most recent review of 2,000 of the biggest hospitals determined only 489 hospitals comply with law. Cynthia Fisher is the group’s founder.

“Sadly we’re over two years into this law and today it’s not working,” Fisher told NBC 7 Investigates. “Because most hospitals are not showing all of their prices.”

The law requires that:

• “Hospitals must display pricing information for at least 300 ‘shoppable services' (or as many as the hospital provides if less than 300) that a health care consumer can schedule in advance. Must contain plain language descriptions of the services and group them with ancillary services, and provide the discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges.”
• “Hospitals must publish a single machine-readable digital file containing the following standard charges for all items and services provided by the hospital: gross charges, discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges.”

Fisher said the machine-readable file of standard charges is what has the biggest potential to shake up the health care industry and finally give patients the upper hand.

“To be able to create mobile apps, online shopping tools like Priceline or Expedia or even Google search engines to show us what’s the price of an MRI within an hour radius — that’s how every other market works in our economy,” Fisher said.

Some San Diego Hospitals Accused of Being Out of Compliance

PatientsRightsAdvocate.Org said its most recent review found that seven local hospitals are out of compliance with the law, for a variety of reasons. In some cases, it said, a particular hospital didn’t include pricing information for all negotiated rates from individual health insurers and all associated plans a hospital accepts. In other cases, it said, a hospital didn’t post discounted cash prices.

NBC 7 Investigates reached out to the companies that run each hospital. All said they disagreed with the report, with the exception of one hospital, which experienced another issue that impacted its website. The responses can be read in the article below:

“The health care system has benefited by keeping patients in the dark,” Fisher said, “hiding prices so they can charge whatever they want.”

The Centers for Medicare & Medicaid Services (CMS) didn’t specifically disagree with reports published by PatientRightsAdvocate.Org but says its review of hospital compliance uses different metrics. It said it conducted a survey of 600 hospitals and found that 70% were following the law.

Changes to Enforcement

Critics like Fisher say CMS’s enforcement process is too slow and isn’t thorough in identifying non-compliant hospitals. Prior to rule changes, if a hospital was found to be out of compliance: 

• It first received a warning letter to correct deficiencies within 90 days.
• If that didn’t happen, CMS then asked the hospital to create a corrective-action plan within 45 days
• It then negotiated a deadline with CMS to come into compliance
• Failing that, CMS could fine the hospital up to $2 million

CMS said it issued 730 warning notices and 269 requests for corrective-action plans. Only four hospitals have ever been fined. CMS said the average time this process was carried out ranged from 195-220 days.

CMS said the new changes below will speed up enforcement:

• Corrective-action plans still need to be submitted within 45 days, but there’s no longer any negotiation about a full compliance deadline
• Hospitals have to be in full compliance within 90 days of receiving CMS’s request for a correction=action plan
• If they aren’t in compliance, hospitals will automatically be fined
• In addition, CMS won’t even send warning notices to hospitals that have not made any attempts to comply with the law. Instead, they will immediately get requests to create corrective-action plans

CMS said the changes will reduce the length of the process to 90-180 days.

Congress Questions CMS Over Enforcement

One day after unveiling enforcement changes, CMS administrator Chiquita Brooks-LaSure testified before the Health Subcommittee of the House Committee on Energy & Commerce. Several representatives questioned her over the enforcement of the law.

“I believe you’re still not doing enough with the authority that you have and there hasn’t been enough enforcement across the board,” said U.S. Rep. Cathy McMorris Rodgers of Washington State.

Others wanted to know how the agency was ensuring that the pricing data published by hospitals was accurate, which prompted this exchange between Brooks-LaSure and U.S. Rep. Bill Johnson of Ohio:

Brooks-LaSure: “When anyone lets us know that they think a hospital is in violation, we undertake a review.”

Johnson: “And you’ve only found that four times? Out of all of the hospitals?”

Brooks-LaSure: “No that’s not right. What we have done is first we send a warning notice if [they haven't] met certain standards. We send a warning notice, we ask them to do a corrective action plan, and what we have found is that the vast majority of hospitals, when they find out they have not been in compliance, come into compliance. Because that’s our goal. Our goal is not to impose penalties, although we will absolutely do so and we have increased our penalties. We are focused on getting hospitals into compliance.”