The Centers for Medicare and Medicaid Services (CMS) price transparency rule has become mandatory for all American hospitals operating in the United States except for government-related facilities. However, it hasn’t got a positive response from most hospitals, including the bigger systems whose annual revenues are billions of dollars. It has been more than a year, yet many hospitals are not compliant.

In some hospitals that have published their data, partial compliance has been observed. So what is selective compliance? 

Hospitals and their partial compliance

A recent study published in the Journal of the American Medical Association (JAMA) states that hospitals are going for selective compliance.

Hospitals choose which rule to follow and which one to omit in simpler terms. The CMS rule had clearly stated that every hospital has to comply with the following:

  • A comprehensive machine-readable file that will contain standard charges for all items, services, and service packages,
  • Display standard charges for 300 shoppable services in a consumer-friendly format to allow patients/consumers to know what services they choose and how much they will cost them,
  • The hospitals can use the patient-estimator tool in place of 300 shoppable services in a machine-readable format.

JAMA’s research shows how each of the above rules is practiced either partially or one rule being randomized.

The research began by analyzing two groups of hospitals’ where random samples were collected. First, a random 100 hospitals out of 6171 hospitals in 2021 and 100 hospitals with the highest gross revenues in 2017 were selected.

How does partial compliance work?

The hospitals chosen for the research work were high-earning hospitals and had few financial barriers to the CMS rule. They could have quickly followed every aspect of the rule, but they didn’t.

The reason why these hospitals chose selective compliance could be not to expose their negotiated rates to their competitors. However, selective compliance fails to disclose the market abuses and other loopholes. 

The researchers did the study to analyze the following factors which were needed for price transparency:

  • Whether the hospitals provided a machine-readable file with charge data 
  •  Whether a separate tool was available for shoppable services in place of the shoppable services file,
  • Whether these files included the payer-specific negotiated rates along with the discounted rates,
  • Whether hospitals used the patients’ health insurance information to access hospital rates for the insurer.

The following conclusions prove that hospitals follow selective compliance with the price transparency rule.

  • Only 33 hospitals had reported the payer-specific rates.
  • Eighty-three of them were non-compliant with at least one primary requirement of CMS rule.
  • Thirty hospitals reported discounted cash prices in a machine-readable file.
  • Only 52 hospitals had offered a price estimator tool for the shoppable services. Out of this, only 23 had posted payer-specific negotiated rates.
  • The price estimator tools require personal health plan information to access the price/cost-sharing information. The patients could view the discounted cash price without the plan information as they did not fall into the “insurer-specific” category.

The above conclusion shows hospitals are not completely compliant. Therefore, it doesn’t meet the price transparency rule, and consumers might not know it. 

What does the “highest-revenue hospital” sample say?

Now, we come to the conclusions drawn by the 100 highest-revenue hospitals. 

  • Seventy-five hospitals were non-compliant to at least one requirement,
  • Forty of them had reported discounted cash prices in a machine-readable file,
  • Only 35 hospitals had reported payer-specific negotiated rates.
  • Eighty-six hospitals had a price estimator tool, and 34 posted payer-specific negotiated rates in a machine-readable file.

A need for price transparency

Price transparency is a much-required fundamental for consumers that would enable them to get the best services and lift curtains between the consumers and providers. Patients have the right to know the pricing details of the healthcare services they get. Therefore, there has to be transparency in pricing to empower every patient to make informed decisions about their care. 

It is high time for hospitals to comply with the price transparency rule fully. CMS had already sent warning notices for the ones who haven’t complied. In addition, the CMS has increased significant penalties for non-compliant hospitals starting Jan 1, 2022. The penalties are up to $2M hospitals with more than 550 beds. Hence, selective compliance is not a solution for the CMS rule. Instead, hospitals should make every effort to become fully compliant to avoid penalties and develop faith in their consumers. ZeaMed can help hospitals become fully compliant. Hospitals can reach out to for low, cost, high-value solutions.


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