Adherence to a Federal Hospital Price Transparency Rule and Associated Financial and Marketplace Factors.
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ABSTRACT:
SUBMITTER: Haque W
PROVIDER: S-EPMC9175070 | biostudies-literature | 2022 Jun
REPOSITORIES: biostudies-literature
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Adherence to a Federal Hospital Price Transparency Rule and Associated Financial and Marketplace Factors.
Haque Waqas W Ahmadzada Muzzammil M Janumpally Sanjana S Haque Eman E Allahrakha Hassan H Desai Sunita S Hsiehchen David D
JAMA 20220601 21
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Project description:ImportancePrice transparency regulations aim to help patients make informed decisions about medical care, but enforcing these rules is a policy challenge. There may be an association between financial penalties and hospital compliance for enforcing price transparency regulations.ObjectiveTo evaluate the association between financial penalties and acute care hospital compliance with the 2021 Centers for Medicare & Medicaid Services (CMS) Price Transparency Rule.Design, setting, and participantsThis cohort study uses an instrumental variable design to evaluate the responses of 4377 acute care hospitals in the US operating in 2021 and 2022 to changes in financial penalties in the context of a federal rule requiring hospitals to disclose privately negotiated prices.ExposureChanges in noncompliance penalties between 2021 and 2022 based on a nonlinear function of bed counts.Main outcomes and measuresWhether hospitals publicly posted a machine-readable file with private, payer-specific negotiated prices at the service-code level. Negative controls were used to address confounding.ResultsThe final sample included 4377 hospitals. Compliance increased from 70.4% (n = 3082) in 2021 to 87.7% (n = 3841) in 2022, with 90.2% of hospitals (n = 3948) reporting prices in at least 1 year. Noncompliance penalties increased from $109 500/y in 2021 to a mean (SD) of $510 976 ($534 149)/y in 2022. Penalties in 2022 were substantial, averaging 0.49% of total hospital revenue, 0.53% of total hospital costs, and 1.3% of total employee wages. Compliance increases were significantly positively correlated with penalty increases: a $500 000 increase in penalty was associated with a 2.9-percentage point (95% CI, 1.7-4.2 percentage points; P < .001) increase in compliance. Results were robust to controlling for observable hospital characteristics. No associations were found for preperiod (2021) compliance or ranges of bed counts where penalties do not vary.Conclusions and relevanceIn this cohort study of 4377 hospitals, compliance with the CMS Price Transparency Rule was associated with increased financial penalties. These findings are relevant for the enforcement of other regulations designed to promote transparency in health care.
| S-EPMC10308252 | biostudies-literature
Project description:BackgroundThe Hospital Price Transparency Final Rule, effective January 1, 2021, requires hospitals to post online a machine-readable file that includes payer-specific negotiated commercial prices for all services. The regulation aims to improve the affordability of hospital care by promoting price competition. However, a low compliance level among hospitals would compromise the operational effectiveness of this regulation. Understanding hospitals' compliance status to the regulation has important implications for its enforcement effort and effectiveness assessment.ObjectiveTo analyze nationwide hospitals' compliance status to the Hospital Price Transparency Rule.DesignCross-sectional observational study.ParticipantsA total of 3558 Medicare-certified general acute-care hospitals were examined.Main measuresA binary compliance rating was generated by using data collected by Turquoise Health. "Noncompliance" means that no machine-readable file was posted or the posted file contains no commercial negotiated prices. "Compliance" means that a machine-readable file was posted with commercial negotiated prices for at least one insurance plan.Key resultsAs of June 1, 2021, 55% of the 3558 Medicare-certified general acute-care hospitals we examined had not posted a machine-readable file containing commercial negotiated prices. Wide variations of compliance existed across states and hospital referral regions. A hospital's compliance status is strongly associated with the average compliance status of peer hospitals in the same market. Hospitals with greater IT preparedness, for-profit hospitals, system-affiliated hospitals, large hospitals, and non-urban hospitals had greater compliance. More concentrated hospital markets had greater average compliance.ConclusionsHospitals take into consideration the behavior of their peers in the same market when making price disclosure decisions. Compliant hospitals are likely to have better IT preparedness, more financial resources and personnel expertise to mitigate the cost required for the implementation of the Price Transparency Rule. The compliance cost, therefore, might be a barrier for some hospitals.
| S-EPMC8667537 | biostudies-literature
Project description:ObjectiveTo understand US hospitals' initial strategic responses to the federal price transparency rule that took effect January 2021.Data sources and study settingPrimary interview data collected from 12 not-for-profit hospital organizations in six US metropolitan markets. All but one organization were multihospital systems; the 12 organizations represent a total of 81 hospitals.Study designExploratory, cross-sectional, qualitative interview study of a convenience sample of hospital organizations across six geographically and compliance diverse markets.Data collection/extraction methodsIn-depth, semi-structured, qualitative interviews with 16 key informants across sampled organizations between November 2021 and March 2022. Interviews solicited data about internal organizational factors and external market factors affecting strategic responses. Transcribed interviews were de-identified, coded, and analyzed using the constant comparative method.Principal findingsHospitals' strategic responses were influenced internally by the degree of the regulation's alignment with organizational values and goals, and task complexity vis-a-vis available resources. We found extensive variation in organizational capabilities to comply, and all but one organization relied on consultants and vendors to some degree. Key external factors driving strategic responses were hospitals' variable perceptions about how available price information would affect their competitive position, bottom line, and reputation. Organizations with more confidence in their interpretation of the environment, including how peers or purchasers would behave, and greater clarity in their own organization's position and goals, had more definitive initial strategic responses. In the first year, organizations' strategic responses skewed toward compliance, especially for the rule's consumer shopping requirements.ConclusionsA deeper understanding of the realities of operationalizing price transparency policy for hospitals is needed to improve its impact.
| S-EPMC11250730 | biostudies-literature
Project description:Concern has been raised about the effectiveness of the Hospital Price Transparency Rule to facilitate a clear understanding of health care prices due to poor reporting by hospitals. However, the relationship between what services the hospital provides and what prices they report is not clear. We assessed reported prices in the Turquoise Health database and compared them at the hospital level with the CMS Provider of Services File to identify if a shoppable service was provided at a hospital. We found significant mismatch between the hospital prices being reported and the services being provided. For example, 56% of hospitals providing at least 1 shoppable service that requires public price reporting did not report any prices. Of hospitals reporting prices, most hospitals (66%) reported prices for only a portion of the services they provide. In addition, 12% of hospitals reported prices for services they do not provide. Only 6% of hospitals had complete concordance with price reporting and services they actually provide. Current compliance enforcement and penalties do not appear to be adequate to achieve the goals of the Hospital Price Transparency Rule.
| S-EPMC11363865 | biostudies-literature
Project description: Not available
| S-EPMC8971218 | biostudies-literature
Project description:BackgroundEffective January 1, 2021, US hospitals were required to upload information on their chargemaster prices (database of list prices), discounted cash prices (commonly charged to self-pay patients), and payer-specific negotiated prices.ObjectiveExamine how prices vary and are associated with hospital characteristics, market competition, and hospital quality.Design setting and participantsThis observational study used data on 14 common medical services across 1599 hospitals in 2021. Descriptive and regression analyses were used to study price variation. Analyses adjust for hospital characteristics, market competition and state fixed effects.ResultsNinetieth -to-10th-percentile price markups factors (ratios) range between 3.2 and 11.5 for chargemaster; 6.1 and 19.7 for cash; and 6.6 and 30.0 for negotiated prices. Adjusted regression results indicate that hospitals' cash prices are on average 60% ( P <0.01) higher, and list prices are on average 164% ( P <0.01) higher, than negotiated prices. Systematic pricing differences across hospitals were noted, with urban hospitals having 14% ( P <0.01) lower prices than rural hospitals, teaching hospitals having 3% ( P <0.01) higher prices than nonteaching hospitals, and nonprofit hospitals pricing 9% ( P <0.01), and for-profit hospitals 39% ( P <0.01), higher than government owned hospitals. In addition, hospitals that contract with more insurance plans have higher prices, hospitals in more competitive markets have lower prices, and higher quality hospitals have on average 5% ( P <0.01) lower prices than lower quality hospitals.ConclusionsPrices all vary considerably across US hospitals. High quality hospitals are associated with lower pricing across all three sets of prices examined. Hospital price transparency may help consumers better identify hospitals that provide both high quality, and low cost, care.
| S-EPMC9464687 | biostudies-literature
Project description:BackgroundThe goal of this study is to estimate the association between hospital system market share and negotiated prices. Hospital system consolidation has led to many highly concentrated markets where systems can leverage their market share to negotiate higher commercial prices. Recently, the Centers for Medicare & Medicaid Services, under its Transparency in Coverage initiative, required health insurers to release all negotiated commercial prices, providing, for the first time, publicly available, nationally representative data on commercial rates. We utilize this newly available data on negotiated prices of healthcare services to show that a hospital with 10% higher market share charges 880-1,180 more per admission.Study designWe used commercial price data for national networks of three large, national insurers and performed a linear regression based on more than 1.3 million negotiated rates across 1,784 hospitals to estimate the association between a hospital's system-level market share and commercial negotiated rates, adjusting for service (DRG), health system, and area level time-invariant characteristics.ResultsWe find that a one percentage point increase in hospital system market share is associated with an $88 to $118 higher negotiated rate per admission. All else equal, a hospital that is part of a system with a 10-percentage point higher market share can expect from $880 to $1,180 more per admission relative to a hospital with lower system market share (5.4% to 6.2% of the median price).ConclusionThese findings confirm that higher hospital system market share is strongly associated with higher commercial negotiated prices and should aid policymakers and decisionmakers in assessing the impact of various policy options aimed at reducing provider consolidation in the healthcare market.Trial registrationNot applicable.
| S-EPMC11619101 | biostudies-literature
Project description:BackgroundGlobal spending on health was continuing to rise over the past 20 years. To reduce the growth rates, alleviate information asymmetry, and improve the efficiency of healthcare markets, global health systems have initiated price and quality transparency tools in the hospital industry in the last two decades. OBJECTIVE : The objective of this review is to synthesize whether, to what extent, and how hospital price and quality transparency tools affected 1) the price of healthcare procedures and services, 2) the payments of consumers, and 3) the premium of health insurance plans bonding with hospital networks.MethodsA literature search of EMBASE, Web of Science, Econlit, Scopus, Pubmed, CINAHL, and PsychINFO was conducted, from inception to Oct 31, 2021. Reference lists and tracked citations of retrieved articles were hand-searched. Study characteristics were extracted, and included studies were scored through a risk of bias assessment framework. This systematic review was reported according to the PRISMA guidelines and registered in PROSPERO with registration No. CRD42022319070.ResultsOf 2157 records identified, 18 studies met the inclusion criteria. Near 40 percent of studies focused on hospital quality transparency tools, and more than 90 percent of studies were from the US. Hospital price transparency reduced the price of laboratory and imaging tests except for office-visit services. Hospital quality transparency declined the level or growth rates of healthcare spending, while it adversely and significantly raised the price of healthcare services and consumers' payment in higher-ranked or rated facilities, which was referred to as the reputation premium in the healthcare industry. Hospital quality transparency not only leveraged private insurers bonding with a higher-rated hospital network to increase premiums, but also induced their anticipated pricing behaviors.ConclusionHospital price and quality transparency was not effective as expected. Future research should explore the understudied consequences of hospital quality transparency programs, such as the reputation/rating premium and its policy intervention.
| S-EPMC9749158 | biostudies-literature
Project description:Background: In 2019, the Centers for Medicare and Medicaid Services (CMS) announced that beginning January 1, 2021, hospitals would be required to post pricing information in a usable format for patients via diagnosis-related group (DRG) or charge description master (CDM) sheets. Purpose/Questions: We hypothesized the new price transparency rule would pose challenges for many health care facilities. We therefore sought to find out how much pricing information was available before the rule took effect and how usable it was for patients receiving sports medicine care. Methods: In late 2019, we randomly selected 100 general hospitals (GH) from the CMS hospital list and an additional 21 orthopedic hospitals (OH). The DRG and/or CDM sheets were obtained from hospital websites. Pricing information for 6 sports medicine procedures (rotator cuff repair, shoulder arthroscopy, knee arthroscopy, anterior cruciate ligament reconstruction, meniscal repair, and steroid injection) was evaluated in qualitative and quantitative form. Results: Pricing information was provided by 74% of GH and 86% of OH. The price of steroid injections was frequently reported in usable form, with 80% by GH and 78% by OH. The remaining procedures were reported by less than 27% of GH and 40% of OH. For each procedure, component pricing was provided by at least 60% of GH and 78% of OH. No facility provided a pricing calculator or payer-type specific rates. Conclusions: Prior to the enactment of the new price transparency rule in January 2021, most facilities provided some pricing information to patients. However, reporting rates in sports medicine were low and the available data were of little use to patients.
| S-EPMC8361591 | biostudies-literature
Project description: Not available
| S-EPMC10031386 | biostudies-literature