More than half, or 55%, of U.S. hospitals did not follow the new federal rule that took effect on January 1, says new study.
The latest research led by Johns Hopkins Bloomberg School of Public Health researchers revealed substantial differences across states in hospital compliance with new guidelines mandating hospitals to disclose prices, with some states attaining 75 percent or greater compliance and others coming in at 25 percent or below.
As a collective, more than half, or 55%, of U.S. hospitals did not follow the new federal rule that took effect on January 1.
The analysis ranked publicly accessible hospital compliance data for all 50 states, the District of Columbia, and 305 geographic regions across the United States. The researchers based their findings on data from over 3,500 hospitals in the United States during the first five months of 2021, from January 1 to June 1.
In the District of Columbia, Hawaii, Rhode Island, Indiana, and Michigan, at least 75% of hospitals were in compliance. In comparison, only around a quarter of hospitals in Delaware, Maryland, Washington, and Louisiana were in compliance. In addition, the researchers discovered that a hospital’s compliance status was closely related to the average compliance level of peer hospitals in the same regional market. If all other hospitals in the same geographic region were compliant, a hospital would be 42 percent more likely to be compliant.
“The findings suggest that hospitals do not make decisions in isolation, rather their decisions reflect market pressure from their peers,” said the study’s senior author, Dr. Ge Bai.
“If the average compliance status in the same region is high, a hospital is more likely to comply.”
The Hospital Price Transparency Rule, which is overseen by the Centers for Medicare and Medicaid Services, compels individual hospitals to disclose clear pricing information about the services they provide online. The material must be posted in a machine-readable file format that can be imported or read into a computer system. Standard pricing for at least 300 services, ranging from colonoscopies to CAT scans, must also be included in hospitals. The new law exempts hospitals from disclosing emergency service fees.
The rule is intended to allow consumers to compare pricing and expected service costs. It can also assist patients in making better informed healthcare decisions, increase hospital competition, and potentially bring down prices. Noncompliant hospitals might risk severe fines of up to $2 million per year until they submit price information in accordance with the new standards.
Using records from Turquoise Health, a data service company that collects hospital pricing information, the researchers examined a nationally representative sample of machine-readable files from 3,558 general acute hospitals—representing 88 percent of general acute hospitals in the United States—from January 1 to June 1. The hospitals were divided into two categories: “compliance” (those that provided a machine-readable file with negotiated rates for at least one health insurance plan) and “noncompliance” (those that did not post a machine-readable file and had no negotiated prices).
The researchers also examined compliance in the country’s 305 hospital referral regions. The researchers discovered that more over half of hospitals in 194 hospital referral districts, or 64%, were not in compliance with the new disclosure requirement. All hospitals in 20 referral regions were in compliance, including Arizona, Connecticut, Georgia, Illinois, Indiana, Kentucky, Michigan, North Carolina, New Jersey, Pennsylvania, Tennessee, and Virginia. In contrast, all hospitals in 26 regions were noncompliant, including Arkansas, California, Delaware, Florida, Iowa, Illinois, Louisiana, Maryland, Mississippi, Ohio, South Carolina, Texas, Virginia, and West Virginia.
The amount of a hospital’s fixed assets committed to health IT objectives is likewise associated with greater compliance, as are for-profit hospitals, system-affiliated hospitals, and non-urban hospitals.
“Interestingly, hospitals that have invested more in health IT are more likely to post their pricing information online,” Bai added.
“This could be because they have more financial resources and personnel to mitigate the cost for implementing the Price Transparency Rule.”
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