Charlotte hospitals aren’t complying with the price transparency rule, study finds

PatientRightsAdvocate.org’s semi-annual Hospital Price Transparency Compliance Report found nine out of ten North Carolina hospitals surveyed were out of compliance with the federal Hospital Price Transparency Rule. The nonprofit advocacy group describes itself as a nonpartisan organization meant to usher in healthcare price transparency.

Why it matters: The rule is meant to foster competition between healthcare providers. The hope is that access to hospital pricing will allow consumers to shop around for the best deal, similar to the way we search travel sites for flights and hotels. As a result, advocates believe hospitals will be forced to set their prices at more competitive rates.

• “The real issue is that hospitals have been able to negotiate prices that vary in a wide range for the same service and the same care in their hospital, and I think it’s going to be very embarrassing when it’s found out by all consumers,” said Cynthia Fisher, founder and chairman of PatientRightsAdvocate.Org.

Yes, but: The level of transparency Fisher hopes for may not be possible on a large scale yet, as most healthcare systems haven’t implemented some or all requirements set out by the rule. And in many cases consequences for ignoring the rule are insignificant, and aren’t being enforced, Fisher says.

Background: The Trump administration finalized the transparency rule in 2019, and it became effective January 1, 2021 as part of the Affordable Care Act. President Biden’s Competition Executive Order, issued earlier this month, further enforced the rule.

• The Centers for Medicare & Medicaid Services is responsible for ensuring hospital compliance.

What’s happening: Atrium Health Carolinas Medical Center had four compliance issues, and Novant Health Presbyterian Medical Center had five, according to the report.

• Most of the issues for both hospitals had to do with sharing specific types of pricing. For Atrium, the main issue was including cash rates. Novant had issues with sharing gross prices and cash rates.

Atrium Health sent Axios a statement saying in part:

“To assist patients and to comply with Centers for Medicare and Medicaid Services (CMS) Hospital Pricing Transparency requirements, we are pleased to offer an online tool that can be used to estimate out-of-pocket costs for common medical procedures and tests. This online tool can easily be accessed from our homepage and used to calculate a hospital out-of-pocket cost estimate based on the selected procedure and a patient’s insurance information or without insurance coverage.

It’s important to keep in mind that many variables, including a person’s individual insurance plan, will affect total out-of-pocket expense. We support efforts to provide greater transparency about costs and, because these are only estimates, we always encourage patients to talk with their provider and ask any questions about the cost of care or treatment for the most accurate and up-to-date information.”

A Novant Health representative sent Axios a statement saying in part:

“Novant Health takes compliance with these federal regulations seriously and is committed to ensuring that consumers have the tools and resources needed to gather an accurate estimate of their out-of-pocket costs. We are proud that in the midst of this unprecedented pandemic, our teams were able to simultaneously develop two tools to ensure greater price transparency. Both the online price estimator tool and our negotiated rates with insurers available on our website.

We look to CMS to determine compliance, and it’s our understanding that any discrepancies were addressed prior to this third party report with no outstanding issues.”

A CMS representative told Axios that anyone can submit a complaint online if they find hospital price transparency issues.

After finding a compliance issue, CMS will send the hospital a warning letter. If the issue isn’t fixed, the hospital would face a fine. To date, CMS has not issued any fines for noncompliance with the rule, the representative said.

• Note: CMS doesn’t publicly share complaints or warnings, so it’s unclear whether Atrium or Novant have received one.

Zoom out: Hospital pricing is only part of a patient’s medical bill. Health insurance, or a lack thereof, also plays a major role in how much each service costs. PatientRightsAdvocate.org is says it’s also advocating for increased insurance pricing transparency.

Related Axios story: [Healthcare provider feud leads to thousands in unexpected anesthesiology fees for new Charlotte parents]  

Between the lines: The report published in the same month that American Hospital Association recognized Atrium Health this week for its efforts to advance equity of care to all patients.