- A new CMS rule requiring U.S. hospitals to disclose negotiated prices for some services is providing only a partial picture of the cost of care, limiting its value to patients trying to comparison shop, a study published Monday in JAMA Network Open concludes.
- The regulation, which became effective in January, makes progress toward improving transparency, but patients still may not be able to get accurate estimates of total costs in advance of their care primarily because many services are delivered and billed separately by independent practitioners who are not subject to the new rule, the researchers said.
- To improve price transparency, all healthcare entities involved in delivering care should be subject to price transparency requirements. In addition, insurers have most of the information needed to estimate patients' out-of-pocket costs, researchers noted, writing, "Healthcare price transparency remains an elusive goal that will require further innovation."
CMS is requiring hospitals to publicly share negotiated prices for at least 300 services to encourage consumers to shop around when choosing healthcare organizations and practitioners, with the goal of lowering spending. A study out earlier this year, however, found low compliance with the new rule. The report, also published in JAMA Network Open, found that less than half of U.S. hospitals had the data on their websites.
CMS last month finalized higher fines for hospitals that fail to comply with the price transparency requirements. Penalties could run as high as $2 million annually for larger facilities.
It is typically unclear whether the prices hospitals disclose include costs from providers who deliver care through the hospital but bill separately, according to the new study. Providers that bill for their services independent of hospitals play a frequent role in overall care delivery, and their reimbursements make up a substantial chunk of the total cost of care, the study said.
"The additional cost of independent practitioner reimbursement may create an unexpected and considerable financial burden for patients," the study authors wrote.
The study looked at 70 services specified by the regulation in four categories: evaluation and management, laboratory and pathology, radiology, and medicine and surgery. Independent providers delivered 7.6% to 42.4% of evaluation and management services, with median reimbursement ranging from $61 for a 45-minute psychotherapy session to $412 for a 60-minute office consultation.
For laboratory and pathology services, 15.9% to 22.2% involved independent providers receiving relatively low median reimbursement of $5 to $7. Independent radiologists were involved in 64.9% to 87.2% of imaging services, with median reimbursement ranging from $26 for lower back radiography to $210 for brain magnetic resonance imaging.
Independent providers were involved in more than 80% of medicine and surgery services, excluding physical therapy, routine electrocardiogram, left heart catheterization and sleep study. The median reimbursement ranged from $47 for physical therapy to $9,545 for a major cardiothoracic procedure.
The study used a database of commercial claims for more than 4.5 million visits to U.S. hospitals in 2018 to analyze healthcare services that can be scheduled by a consumer in advance.