Many hospitals not complying with price-transparency rule

Health Care

Kaitlyn Finley | April 21, 2021

Many hospitals not complying with price-transparency rule

Kaitlyn Finley

It appears that many hospitals are not complying with new federal price transparency regulations.

In a recent article published on the Health Affairs website, researchers Morgan Henderson and Morgane C. Mouslim found that more than half of the 100 largest hospitals in the United States were not compliant with price transparency regulations adopted during the Trump administration.

As of January 1, 2021, hospitals must provide price information for their services online in a consumer-friendly format as well as a machine-readable file, according to the Centers for Medicare and Medicaid Services. In their study, Henderson and Mouslim found a dozen hospitals did not provide adequate searchable price information and 53 hospitals did not include payer-specific negotiated rates on their website, as also mandated by the regulation.

According to the federal rule, hospitals that don’t comply with the price transparency rule may be charged up to $300 per day for multiple policy violations.

However, some health care policy analysts have criticized the rule, stating the $300 maximum penalty is not steep enough for larger hospital systems and some hospitals may willingly pay the fine instead of complying with the rule.

Niall Brennan, president of the Health Care Cost Institute, a national health care research organization, stated the fine is “too low and an infinitesimal rounding error for hospitals.”

In a tweet, Kaiser Family Foundation executive Larry Levitt called the penalty “chump change.”

A quick look into a few Oklahoma hospitals found that the price estimates on their website, although technically compliant with the federal rule, would likely not reflect total costs for patients.

For example, using the consumer-friendly price estimator tool on the website of the Saint Francis Health System, an uninsured person needing his gallbladder removed at Saint Francis in Tulsa can expect to pay $17,107 for hospital charges. According to the site’s disclaimer, however, the $17,107 charge does not include “physician facility charges, office visits, surgeons, anesthesiologists, radiologists, or consulting physicians.”

According to the consumer-friendly price estimate tool for Mercy hospitals, an uninsured patient can expect to pay $10,116 for a gallbladder removal procedure; that figure excludes possible anesthesiologist fees and pathologist fees.

This points to the need for legislation, currently pending at the Oklahoma state Capitol, to give patients a more accurate price estimate and cut down on unexpected medical bills.

Senate Bill 548, authored by state Sen. Julie Daniels (R-Bartlesville) and state Rep. Tammy Townley (R-Ardmore), will encourage medical providers to give patients a good-faith estimate for routine procedures and services. If they don’t provide a good-faith estimate, providers cannot later take the patient to collections or report the bill to a credit bureau.

Senate Bill 548 requires that the good-faith estimate include all providers involved with delivering the care. This would include providers that often bill separately after care is delivered, including radiologists, anesthesiologists, or lab technicians. The legislation also stipulates the total amount of the good-faith estimate be clearly stated in large print on the first page of the document.

The bill aims to reduce the amount of calls from collection agencies and surprise court summons that patients receive regarding unexpected medical bills.

Kaitlyn Finley Policy Research Fellow

Kaitlyn Finley

Policy Research Fellow

Kaitlyn Finley currently serves as a policy research fellow for OCPA with a focus on healthcare and welfare policy. Kaitlyn graduated from the University of Science and Arts of Oklahoma in 2018 with a Bachelor of Arts in Political Science. Previously, she served as a summer intern at OCPA and spent time in Washington D.C. interning for the Heritage Foundation and the U.S. Senate Committee on Environment and Public Works.

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