When was the last time you knew the full cost of a medical procedure before going under? Hospital price transparency has been enforced by the Centers for Medicaid and Medicare since 2021, but whether the law is functioning as intended is a topic of heated debate.
A new report from the nonprofit Patient Rights Advocate claimed that only 33% of North Carolina’s hospitals are in compliance with the rule, which requires hospitals to post clear, accessible pricing information for at least 300 “shoppable” health services.
In the last six months, CMS has taken enforcement actions against six North Carolina hospitals, half of which are in the Novant Health system.
“The purpose of the price transparency rule is to force accountability and integrity, to drive down the cost of care, and to ensure consumers are well-informed and benefiting from competition and choice,” Cynthia Fisher, chairman of Patient Rights Advocate, told Carolina Public Press.
“Health care is the only place in our economy where prices are hidden and bills come in pieces by mail, weeks or months later. Often, those bills don’t reflect what we actually received, and we are overcharged.”
Controversy over price transparency report
Patient Rights Advocate’s list of noncompliant hospitals includes facilities in nearly every major North Carolina health system: AdventHealth, Advocate Health, HCA, Cape Fear Valley Health, Caromont, Duke LifePoint, Kaiser Risant, Duke Health, ECU Health, FirstHealth of the Carolinas, UNC Health, WakeMed Health and Novant Health.
Their list is far longer than the list of hospitals that CMS has taken action against.
Representatives from the systems named in the Patient Rights Advocate report — and others players in the health care industry — have serious concerns about the report’s legitimacy.
Most say that only CMS can make any meaningful determination about the rule, so patients and other concerned parties should not be distracted by dubious third-party investigations.
But since 2021, CMS has only actually fined 15 hospitals across the country for violations of the price transparency rule. One of these hospitals is in North Carolina — Betsy Johnson Hospital in Harnett County.
More recently, CMS has taken enforcement actions, including warning notices and Corrective Action Plan requests, against Novant Health Rowan Medical Center, Novant Health Thomasville Medical Center, Novant Health Charlotte Orthopedic Hospital, Sampson Regional Medical Center, Old Vineyard Behavioral Health Services and Washington Regional Medical Center, which recently filed for bankruptcy.
“We take compliance with these federal regulations seriously and our teams have been committed to staying up-to-date and in compliance with the various iterations of the CMS Price Transparency Rule since it launched in 2021,” Novant Health spokesperson Michael McAllister told CPP in an email.
Price transparency enforcement questions
Some believe that CMS’s enforcement of the law is lazy or ineffective.
“CMS has not been enforcing the law,” Fisher said. “Last year, only one hospital was fined, and we don’t even have proof that they were forced to pay.”
In North Carolina treasurer-elect Brad Briner’s view, the problem is that even when CMS does enforce the rule, it's possible for health systems to just ignore the agency.
“The regulations that came out of CMS some years ago were incredibly well-intended,” Briner told CPP. “Unfortunately, the penalties attached to them were insufficient to compel participation for a lot of people. These hospitals are multi-billion dollar enterprises, and can stand to pay a small fine.”
For example, Betsy Johnson Hospital was fined just $99,540 in 2023. Since then, however, CMS has raised the penalty for noncompliance to $2 million, according to Fisher.
“CMS is committed to ensuring consumers have the information they need to make fully informed decisions regarding their health care,” CMS spokesperson Patrice Martin told CPP in an email.
“We believe that price transparency can stimulate provider competition, empower healthcare consumers, and result in lower healthcare costs, and that transparency in healthcare pricing is integral to supporting a transition to value-based care.”
Hospitals on defense
The Patient Rights Advocacy report exacted defensive responses from North Carolina’s health systems. Carolina Public Press reached all the systems with hospitals that the report deemed noncompliant, and all maintained that they are in step with price transparency standards. Most questioned the veracity of the report.
“Health care delivery is an extraordinarily complex, heavily regulated business that requires contracts with thousands of partners, suppliers, manufacturers and private sector insurers, as well as Medicare and Medicaid,” an Advocate Health spokesperson told CPP in an email.
“Since the inception of the federal hospital transparency requirements, we have been diligent in our efforts to meet both the spirit and the letter of the law. The findings in this report are merely subjective based on the interests of Patient Rights Advocate.
“In its Nov. 22, 2023, OPPS Final Rule, The Centers for Medicare and Medicaid Services (CMS) confirmed that only CMS can make a determination as to a hospital’s compliance with the HPT (hospital price transparency) requirements. To publish ad hoc lists of this nature fundamentally misrepresents the existing rules and serves only to advance misinformation — often solely to further the publishing organization’s preferred narrative.”
Patient Rights Advocate puts the nationwide price transparency compliance rate at 21%, while a November report by the Office of Inspector General says 63% of all surveyed hospitals were in compliance.
Some of the hospitals implicated may not deliberately be trying to evade the law. This is the view of the North Carolina Healthcare Association. “North Carolina hospitals strive to make pricing information accessible to help patients make informed decisions about their health care,” NCHA spokesperson Stephanie Strickland told CPP.
Rates of noncompliance may be inflated due to the many technicalities of the rule, according to UNC law professor Richard Saver. It's possible, for example, that an incorrectly formatted file could result in a noncompliant status.
“There has undeniably been hiccups in the rollout of the law,” Saver told CPP.
“But looking at the raw numbers of how many hospitals are compliant may be deceiving due to the rigid reporting mechanisms hospitals have to follow. Even so, the compliance rates are probably not where the government wants them to be at all.”
One barrier is the cost of perfect price transparency for the hospital. Hospitals have many cost pressures to juggle, and hiring a team to create a host of compliant pricing files may not be the first thing on the minds of hospital leadership.
Are patients actually using this data?
Saver also raises the issue of whether consumers are actually consulting this data when making decisions about where to get their health care.
“If we eventually get more data reported correctly, the question remains: who is the intended audience, and are they using the data effectively?’ Saver said. “I think it is still too early to tell.
“The hope was that this would lead patients or insurance companies to shop around and bargain for services. There’s always a concern that patients may not be looking at this data when they have to make a decision about which hospital to go to. It’s unclear whether insurers are making use of the data either. Let’s not lose the forest for the trees — the big issue is whether this law will work better with the more data we get in.”
This article first appeared on Carolina Public Press and is republished here under a Creative Commons license.