Hospitals Could Face Steep Fines for Not Posting Prices – Maybe

The public is waiting to see how serious the Biden administration is about enforcing a pro-consumer Trump administration rule requiring hospitals to post the prices they charge for 70 “shoppable services” and 230 other procedures in a user-friendly format.

The American Hospital Association and three other national organizations sued the federal government over the rule and in December 2020, but the U.S. Court of Appeals for the District of Columbia Circuit upheld the Trump rule in a 2-0 decision.

The rule went into effect on January 1, 2021, before President Biden took office, but it was unclear how the new administration would enforce the rule or whether it would buckle to pressure from the hospital industry.

Noncompliance, Threatening Letters

A March study in Health Affairs found 65 of the nation’s 100 largest hospitals were “unambiguously non-compliant.” Patient Rights Advocate, a watchdog group, found 94.4 percent of hospitals hadn’t met one or more of the rule requirements, in a report published in July.

In July, the Centers for Medicare and Medicaid Services (CMS) told Bloomberg Law it had sent 165 letters warning hospitals they had 90 days to comply with the rule.

CMS also proposed increasing the penalties for price transparency violations from $300 a day to $10 per day per bed, up to $2 million per year for larger hospitals. CMS also said it would crack down on hospitals failing to make the price data more accessible in automated searches and direct downloads.

Price Competition

With rising deductibles and co-insurance, nearly one in five Americans are unable to pay for needed health care, according to the Journal of the American Medical Association. Making hospital prices more transparent is considered a milestone in health care reform because it encourages competitive pricing, such as consumers’ experience when booking a flight or shopping for goods online.

“Armed with actual prices, including discounted cash and secret negotiated rates, healthcare consumers can enjoy easy recourse if their healthcare bills do not match—without needing a lawyer,” states Patient Rights Advocate.org, an early proponent of price transparency.

The Health Care Choices 20/20 plan, for example, urges Congress to codify the price transparency rule, so consumers “can compare prices and obtain the best value.” On May 7, the Health Care PRICE Transparency Act, sponsored by Rep. Warren Davidson (R-OH) was introduced in the House. The bill, however, keeps fines for violations to the $300 a day limit of the original rule.

Price Secrecy

Until the price transparency rule, it was nearly impossible for consumers and even large health care groups to get a list of prices hospitals would charge for any service. Prices differed among plans and even within plans. says Katy Talento, executive director of the Alliance of Health Care Sharing Ministries and a former top health advisor at the White House who led the drive for price transparency.

“Price information is usually hidden in health care, and prices can vary—for the same service at the same facility—by orders of magnitude for no discernible reason except for their secrecy,” said Talento. “Uninsured patients, insured patients with high deductibles, and members of Health Care Sharing Ministries have every reason to demand an end to this broken system as they seek medical care.”

Although third-party payors cover many consumers’ hospital expenses, they benefit from finding the lowest cost care provider, “Almost everyone has some sort of cost-sharing,” said Talento.

Competition Incents Sharing Ministries

Health care sharing ministries are particularly sensitive to hospital pricing because they are cooperatives: members “share” the medical expenses of others. Additionally, they are non-profit, and while that keeps downs member contribution costs down, there is no reserve fund to cover higher than average claims.

“Our ministries share what our members can bear and the more discounted prices that they can obtain for their members and help their members negotiate for themselves, the more bills they can share in and the more people they can serve,” said Talento.

According to the Alliance of Health Care Sharing Ministries, more than 1.5 million Americans are using health care sharing ministries and since 2019, members have “shared” $1.3 billion of medical expenses.

Price Transparency Pushback

Skeptics claim that price transparency doesn’t benefit communities with only one hospital, but the case for price transparency is even stronger in rural areas, says Talento.

“Patients are willing to drive someplace else if we’re talking about saving thousands of dollars,” said Talento. “They are even willing to get on a plane and go somewhere else.”

Talento says she knows of one patient in Georgia who was able to negotiate with her hospital after looking up the price posted by the Surgery Center of Oklahoma.

“They took her price,” said Talento.

Traditional Hospitals Uncompetitive

Another concern has been that large hospital systems will put smaller competitors out of business, but these medical behemoths can’t compete, says Talento.

“The idea that these big hospital systems—these bloated, corporate academic medical centers that claim they can’t possibly operate without all kinds of federal funding streams to keep themselves afloat because they’re ‘so special and academic’—are going to undercut an innovative competitor like the Surgery Center of Oklahoma, is a joke,” said Talento.

Congress and the Biden administration need to fight hard to promote hospital price transparency, says Talento.

“Hospital compliance with the new rule is still unacceptably low,” said Talento. “We call on all hospitals to stop the cover-up and honor their patients’ rights to meaningful price transparency in advance of care.”

AnneMarie Schieber (amschieber@heartland.org) is the managing editor of Health Care News.

Internet info:

“Hospitals – Stop Hiding Your Prices (Guest: Katy Talento),” The Heartland Daily Podcast