By Rita Numerof

Since the rules were formalized in 2019, the American Hospital Association (AHA) has been adamantly opposed to publicly posting the prices for the services hospitals deliver. They took their case to court repeatedly to prevent its members from being obligated to disclose what customers in every other segment of the economy take for granted – transparency – and lost. Most recently, on appeal, in June of 2021, a D.C. District Court decision invalidated their argument again, and though many months have passed, little has changed. What will it take to get hospitals to comply with federal law?

The move to bring transparency to hospital pricing began with the Obama-era Hospital Disclosure Rule found in the Affordable Care Act (ACA) which authorized the Secretary of Health and Human Services (HHS) to issue regulations compelling the nation’s hospitals to disclose relevant prices to consumers. Starting January 1, 2021, each hospital operating in the United States was required to provide clear, accessible pricing information online about the items and services they provide in two ways: the first requires a comprehensive machine-readable file listing all items and services. Second, they must also display all shoppable services in a consumer-friendly format.
A year later, there’s little evidence that the law is being obeyed in letter or spirit. As of February, only 14% of hospitals have complied with all the requirements set forth in law. Instead of the price listings mandated, patients find enormously complex data files that are not easily read or understood by anyone, including experts.

This shines a light on precisely how consumers are being harmed: arbitrary pricing differences, seemingly unrelated to underlying costs. What has emerged is a picture of wildly disparate charges for the same basic services, oftentimes more than what a customer would pay out of pocket. Rather than answer the question “how much will this procedure cost?”, such actions leave the impression that hospitals are more interested in the question “how much will the market bear?”

CMS has initiated auditing, and hospitals found in violation are supposed to face civil monetary penalties. Yet, so far, CMS has only sent out warnings and corrective action plans and to date, no fines have yet been levied. Even if they were, the penalty seems too light to make much of a difference. The stipulated penalty ranges from around $100k to over $2 million per year depending on the size of the hospital. This amounts to a pittance for most of them, the biggest of whom take in tens of thousands of times those amounts. Higher penalties went into effect in January, but will not have any impact until they are actually levied. Even then they seem too low to get the change patients deserve.

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