Report finds Wisconsin has ‘a long way to go' in making hospital prices transparent
More than three years on, some hospitals still are not fully disclosing prices for procedures and other health care as required by a federal rule meant to improve transparency into health care prices and ultimately slow the rise in health care costs.
A new report by a patient rights group estimated only two in five Wisconsin hospitals − and a little over a third of hospitals nationwide − are fully disclosing prices for procedures, tests and treatments.
Hospital industry groups have disputed that report, and other analyses suggest more hospitals − well over half − are disclosing prices as required, even if the information is confusing or hard to understand.
The federal rule, implemented under former President Donald Trump's administration, is part of a broader effort to empower patients, employers and others to make informed decisions about their care. The hope is that insight into previously undisclosed hospital prices will increase competition and, in turn, slow the rise in health care costs.
“There's still a long way to go though,” said Cheryl DeMars, president and CEO of The Alliance, a Madison-based coalition for employers who self-insure.
Under the rule, which took effect in 2021, hospitals are required to disclose the prices they negotiate with health plans for services and products — everything from a hip replacement to a stent.
Prices for the same procedure can vary dramatically from hospital to hospital in the same city, and even within the same hospital, depending on the health insurer.
Since 2021, researchers have used the data to compare rates for specific procedures across hospitals and to identify pricing disparities. Employers have used the data to see what their health plans pay compared to others.
Improvement, but many hospitals come up short
Early on, hospitals were slow to disclose prices, and federal regulators responsible for enforcing the rule were criticized for being too slow to crack down on hospitals ignoring the rule.
The picture has since improved. Most hospitals now have lists of prices online and are at least in partial compliance with the rule.
"It's definitely in a much better place than it was," said John Hargraves, director of data strategy at the Health Care Cost Institute.
But even when hospitals disclose prices, researchers and others have noted the data are often messy, inconsistent and confusing. And some hospitals still come up short and don't disclose complete information.
Hospital groups push back against report's findings
The report by PatientRightsAdvocate.org summarizes their semiannual review of hospitals' disclosures under the rule. From September to January, the group reviewed the websites of 2,000 hospitals across the country and concluded nearly two-thirds did not meet the group's threshold for completeness.
The report found that many hospitals' data files were missing prices or didn't have prices clearly associated with both insurance provider and plan. Some hospitals reported prices for most procedures and items as percentages, instead of dollar amounts. In some cases, hospitals are allowed to give the price as a percentage, but federal regulators say they should give the dollar amount when possible.
Hospital industry groups, including the Wisconsin Hospital Association and the American Hospital Association, dispute the group's findings and call its methodology flawed. They say only the Centers for Medicare and Medicaid Services, the federal agency in charge of enforcing the rule, can determine whether hospitals are following the rule.
They also say such reports ignore aspects of CMS guidance. For example, when hospitals bundle services together and charge a single price, they might not fill out every field in the data file and leave some fields blank.
Turquoise Health, an online platform for hospital price data, has rated the majority of Wisconsin hospitals as having "complete" data files. Nationally, a little over half of hospitals have posted "complete" pricing data files, by Turquoise Health's definition.
Federal enforcement of price transparency stiffened following criticism
The Centers for Medicare and Medicaid Services has ramped up enforcement since previously coming under criticism for what some called lax enforcement of the rule.
The agency audits a sample of hospitals and investigates complaints of hospitals not complying.
Through February, CMS has sent more than 1,200 warning notices to hospitals that were determined to not be following the rule and has issued 720 requests for improvement plans to hospitals, some of which had previously received warnings, according to a CMS spokesperson. There are more than 6,000 hospitals in the United States.
Through February, CMS has closed the cases of 975 hospitals that addressed the compliance issues, the CMS spokesperson said. Most cases took over five months to resolve, according to CMS data.
It is unclear exactly how many hospitals remain under a warning or are currently on an improvement plan for noncompliance. CMS only publishes the names of noncompliant hospitals after the warning has been resolved or the plan completed.
Since 2021, at least 10 Wisconsin hospitals have been issued warning notices that have since been closed after CMS determined the hospitals had come into compliance, according to data published by CMS of closed cases.
Nationwide, only 14 hospitals, none in Wisconsin, have been fined by CMS for not following the rule, the most serious penalty used for hospitals that ignore warnings and improvement plans.
Groups like PatientRightsAdvocate.org see enforcement as still lacking and have called on CMS to hold hospitals accountable more quickly.
New rules require standardized hospital price reporting
Updates to the federal rule that took effect this year are designed to make it easier for CMS to enforce the rules.
Until now, hospitals were given a lot of discretion in how they reported prices, which can be complicated and not easily distilled to a single number. The result was hospitals reported the data in different formats that made it difficult to compare prices or easily review the data for compliance.
The updated rule will help standardize the pricing data that hospitals report by requiring hospitals to follow the same format, beginning on July 1.
“These are steps in the right direction. It’s going to take time to get this right," said DeMars, of The Alliance. "Health care is just becoming unaffordable, and we see such variation in the prices for things that are arguably commodity-type care and shoppable. People need to have this information."
This article originally appeared on Milwaukee Journal Sentinel: 'Long way to go' in making Wisconsin health care costs transparent
