Nearly a year into the enactment of the hospital price transparency law and more than half of U.S. providers still are not complying with the new federal rule.

That’s what researchers at Johns Hopkins Bloomberg School of Public Health found in an assessment of more than 3,500 U.S. hospitals across 305 geographic regions in all 50 U.S. states and the District of Columbia, with 55% not abiding by the law. The study is titled, Factors Associated with Compliance to the Hospital Price Transparency Final Rule: A National Landscape Study.

Enacted on January 1 of this year, the hospital price transparency law requires that individual hospitals provide pricing information online for at least 300 services they offer in a machine-readable file. The intent is to allow consumers to compare prices and make more informed decisions about care. The rule is expected to increase hospital competition and potentially lower costs, but those that do not comply could face penalties of up to $2 million a year.

The team examined compliance over the first five months of 2021 and found the trend varied among individual states, with some states achieving 75% of higher compliance and others at 25% or lower. At least 75% of hospitals in the District of Columbia, Hawaii, Rhode Island, Indiana and Michigan, for example, were found to be abiding by the rule, while at most, 25% in Delaware, Maryland, Washington and Louisiana were compliant.

Additionally, hospital compliance correlated with the average compliance level of hospitals in the same regional market. The researchers say a hospital would be 42% more likely to comply with the rule if all other hospitals in its geographic region did the same. This shows that a hospital's decision to comply is less an isolated one and more based on market pressure from peers, according to senior author Ge Bai, a professor in the department of health policy and management at the Johns Hopkins Bloomberg School of Public Health. "Some of the variations are due to the different levels of hospital market concentration. We found that more concentrated hospital markets had greater average compliance."

Bai and her colleagues collected their data from data service company Turquoise Health. The information was a nationally representative sample of machine-readable files from 3,558 general acute hospitals, which is 88% of all general acute hospitals in the U.S.

They also looked at compliance among the country’s 305 hospital referral regions and found that 194 (64%) were noncompliant. All hospitals in 20 referral regions did post pricing information on their sites, including in regions in Arizona, Connecticut, Georgia, Illinois, Indiana, Kentucky, Michigan, North Carolina, New Jersey, Pennsylvania, Tennessee and Virginia. All hospitals in 26 other regions did not comply, including regions in Arkansas, California, Delaware, Florida, Iowa, Illinois, Louisiana, Maryland, Mississippi, Ohio, South Carolina, Texas, Virginia and West Virginia.

Those with more up-to-date health IT systems were more likely to abide by the rule, which may be due to having more financial resources and personnel to mitigate the cost of implementing the rule, according to Bai. She adds that some hospitals might strategically avoid disclosing price to protect revenue, and that the compliance cost might be the reason why small and less IT-prepared hospitals are hesitant to comply. Also, whether a hospital was for-profit, system-affiliated and urban or non-urban also makes a difference.

"Besides imposing penalties, raising public awareness of the compliance status of hospitals, especially at the local level, would help. However, as we found in the study, compliance cost might be the reason for small, independent, and less IT-prepared hospitals' low compliance rate. Allowing hospitals some time to adapt and comply might be a sensible approach," said Bai.

Another study conducted by nonprofit PatientRightsAdvocate.org back in August found that even less were complying, with just over 5% of U.S. hospitals posting their prices online. Another poll conducted by the same organization found that 82% of Americans support requiring hospitals to make prices readily available, and 77% support increasing the penalty for noncompliance from $300 per hospital per day to $300 per hospital bed per day. Another 56% felt they or a close family friend had been overcharged when seeking medical care.

Earlier this year, President Biden passed an executive order to crack down on unfair anti-competitive practices in healthcare and other industries, including noncompliance with price transparency, particularly by large hospitals that have created monopolization of practices through large-scale consolidation.

“Every single day, hospitals and insurance companies can choose to overcharge patients because we have had no ability to see, before we get care, the prices we will be charged. Consumers in healthcare are not just the patients. They are employer- and union-sponsored plans that come out of the employee’s wages. It’s our money to save," Cynthia Fisher, founder and chairman of PatientsRightsAdvocate.org, told HCB News at the time.

The findings were published in the Journal of General Internal Medicine.