Since January 2021, hospitals have been required to post their prices. While this recent legal requirement is not likely to bring down costs, it is helpful for understanding hospital pricing. But, hospitals continue to flout this requirement and instead choose to keep their prices secret. Aditi Ramaswami reports for The Lever on hospitals’ failure to comply, based on new research.
The idea behind the requirement for hospitals to post their prices is that it would promote competition and help people price shop before going to a hospital. On its face, that’s absurd. People go to the hospital in their community or where their doctors work or which their doctors recommend. And, for the most part, people have no clue or control over what services they will receive in hospital in addition to the principal service they go in for. The cost of those ancillary services add up quickly. Moreover, a lot of the time people end up in the hospital as a result of an emergency, for which they could not plan.
So, the provision in the Affordable Care Act requiring hospitals to post their prices–even if done in a consumer-friendly way–is not likely to make health care more affordable. And, hospitals are not complying with their obligations.
CMS reports that halfway into 2021, fewer than one in 18 hospitals were making their prices available for public scrutiny. The Lever reports that many states have hospitals charging patients more than three times Medicare rates.
Health and Human Services Secretary, Xavier Becerra, committed to ensuring that hospitals comply with the requirement to disclose their prices, when he was confirmed. But, how? HHS can impose fines on hospitals, but it has failed to do so, except in two Georgia hospitals.
Meanwhile the hospital trade association, the American Hospital Association (AHA), sued to block the federal government from implementing this provision. The AHA made the laughable argument that disclosing hospital prices would undermine competition. The hospitals themselves make the laughable argument that it would cost them too much to implement the provision–as if it’s OK for people not to know hospital prices or as if price information is not stored on a computer system and easily accessible for hospitals to use for billing purposes.
What’s more concerning is what the hospitals’ non-compliance says about hospitals’ ability to manage care and otherwise take proper care of their patients. Something as simple as reporting their prices should not present a challenge to any hospital, let alone the largest hospitals. For the biggest hospitals, some experts suggest the reason for nondisclosure is financial–concern about not losing revenue. Moreover, experts say the fine for non-compliance is less costly to hospitals than complying.
Colorado is working hard to impose a penalty on hospitals that helps ensure compliance. There’s a bill in the state legislature, which passed with bipartisan support, despite heavy lobbying against it by the hospital trade association, that would prohibit hospitals from sending unpaid patient bills to collection agencies unless they are in compliance with the federal price transparency law.
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