Assessing Price Transparency Rule Compliance Mid-2022

It’s June, 2022. According to the latest report from FAIR Health, almost 85% of hospitals have not complied with a new federal law regarding price transparency.

What’s this rule we’re talking about?

Hospitals were issued a mandate in November, 2019 that required all hospitals to make available their standard charges for items and services provided by the hospital via the internet in a machine-readable format and updated at least annually, or more often as appropriate. The mandate was issued by the Department of Health and Human Services (HHS).

The goal of this mandate is simple: Provide patients with transparency about what their care is likely going to cost them before they receive care. This way, consumers can shop around - or even just request lower-cost services - and avoid sticker shock at the end of treatment.

Deadline for compliance

January 1, 2020 marked the first day where hospitals had to comply with a new federal law regarding price transparency.

The law requires hospitals to make their standard charges available to the public in an easily accessible format on their websites by January 1, 2020. The information must include:

·? ? ? The base price for various procedures or services

·? ? ? Any additional costs (such as facility fees) that would apply in addition to the base price

·? ? ? What percentage of patients pay less than this amount?

Why was this rule created to begin with?

The rule was designed to increase price transparency and improve consumers’ ability to shop for healthcare. The new rule affected all providers that operate in the Medicare program, including critical access hospitals (CAH), home health agencies (HHA), hospices, and other extended-care facilities such as rehabilitation facilities and skilled nursing facilities.

The change was meant to help consumers make more informed decisions about their care by giving them access to information about what kind of services a provider offers, how much those services cost, and whether or not they are considered medically necessary.

Implementation of the rule – still a work in progress

However, 85% of hospitals have not complied with this rule, according to an announcement from FAIR Health – which recently released its Quarterly Price Transparency Report and Data Briefing.

The report found that compliance rates for Stage 2 hospital providers were 85% in September 2018 compared to 82% in March 2019 (the first month hospitals had to comply). Among outpatient centers, compliance increased from 78% in March 2019 to 83% in September 2019 (Stage 2).

Where are we getting the above stats from?

The report offered detailed analyses of Standard Charge data (the amount billed by providers, regardless of negotiated rates with insurers) under the new CMS Price Transparency Rule, as well as Standard Charge data submitted by US hospitals voluntarily before implementation of the Rule.

For example:

·? ? ? The Hospital Data Analysis Program analysed how hospitals were using New York State’s All-Payer Claims Database (APCD) and found that they could use it to improve transparency and accountability regarding healthcare costs.

·? ? ? The report found that more than 90% of inpatient admissions across all payer types were billed at least twice during their stay, but only about one-third had their total charges for hospitalization covered within 30 days after discharge.

Conclusion

This new policy is going to be a huge change for our nation’s hospitals. It's going to force them to make some tough decisions about how they can best serve their patients and still stay afloat financially. Let’s hope that as time goes by, we'll see more hospitals following the law and providing this important information online so that consumers can make informed choices when it comes to health care costs.

Danielle Ezra

Executive - Social Media Marketing

V-Etico Services LLC

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