Nation’s Largest Health Care Systems Unlikely to Comply With Price Transparency Mandate

By Consumers For Quality Care, on December 22, 2021

Higher penalties for hospitals that don’t disclose their prices to consumers may not sway some of the nation’s largest health systems to comply, according to Becker’s Hospital Review.

The CMS final transparency rule, which took effect January 1, 2021 aims to make hospital pricing information readily available in a consumer-friendly format to allow patients to compare prices and make more informed health care decisions.

According to an analysis of 500 hospitals conducted by the nonprofit Patient Rights Advocate, 94.4 percent of hospitals have not complied with at least one of the rule’s requirements.

To boost hospital compliance, CMS released a final rule that increased the hospital transparency noncompliance penalty for hospitals with more than 30 beds. A full year of noncompliance would result in a maximum $2 million penalty per hospital.

The new noncompliance fee will likely persuade more mid-sized hospitals to comply with the regulation – which would result in a bigger hit to their bottom line – rather than the larger health systems.

“For the extremely large health systems, that amount is not really that large of a fine. I’m hearing from some systems that $2 million is nothing to them,” said Caroline Znaniec, a managing director at advisory firm CohnReznick. “They may be weighing the risks.”

Larger hospital systems don’t want to comply with the regulation because they don’t want to disclose their negotiated rates, Ms. Znaniec explained. “They have the resources to comply. They don’t want to lose market share.”

Large health care systems should get more than a slap on the wrist for not following price transparency rules. CQC urges lawmakers and regulators to continue to find solutions to bolster hospital price transparency, allowing consumers to make more informed health decisions.