Democrat and Republican lawmakers in a House Ways and Means committee hearing on Tuesday were split on how much price transparency can help curb healthcare costs, with Republicans criticizing the Biden administration for not doing enough to enforce price transparency reporting requirements on hospitals.
Since 2021, hospitals have been required to post a machine-readable standard charges files for their items and services, along with the actual price of 300 shoppable services. Only 25% of hospitals are fully complying with price transparency rules, according to Patient Rights Advocate. CMS has fined four hospitals for noncompliance to date.
“Do we really think that nearly every American hospital is in compliance? We don’t know, because CMS doesn’t make compliance reviews and enforcement actions public. We can get more information about a local restaurant from Yelp than you can get about your local hospital from CMS,” said Chairman Jason Smith, R-Mo.
The main reason for noncompliance is that, though a majority of hospitals are posting files, most of the information is incomplete or illegible, PRA found. Republicans blamed the Biden administration for not buckling down.
“CMS has largely failed to hold the hospitals nationwide accountable for compliance,” said Rep. Michelle Steel, R-Calif.
The federal government could take a number of actions to improve compliance, testified Chris Whaley, a health economist at nonprofit Rand.
The government could also take lessons from the states, Whaley said, noting how Colorado recently implemented a policy preventing hospitals that don’t publicly post price information from pursuing patients for medical debt. In addition, regulators could make complying with price transparency requirements a condition for participating in Medicare, Whaley suggested.
The government also should standardize how hospitals report price data to improve the usability of the files, testified Bill Kampine, co-founder and CIO of comparison-shopping site Healthcare Bluebook.
Currently, price transparency requirements for the most part allow users to look at information from the facility, not prices set by doctors unaffiliated with the hospital, such as anesthesiologists. In addition, the hospital outpatient department is generally the most expensive site for services like an ACL repair, meaning right now, patients can only compare the lowest cost for services across the most expensive provider type, Kampine said.
The government could expand price transparency requirements to other sites — especially settings where patients receive a lot of shoppable care like ambulatory surgical centers, freestanding imaging and lab test centers and physician offices, Whaley said.
“We should not pretend, however, that transparency and shopping alone is the magic of the marketplace,” said Rep. Richard Neal, D-Mass., the committee’s ranking member. “Likely we’ll have to go much farther in making sure that consumers actually have access to affordable, dependable and comprehensive coverage.”
The fundamental issue with price shopping in U.S. healthcare is that it’s a broken market, argued multiple Democrat lawmakers and witnesses.
Comparative price data is helpful, but not a panacea in a system riddled with powerful, entrenched cost drivers, like rampant consolidation and middlemen like pharmacy benefit managers, testified Rick Gilfillan, former director of CMS’ innovation center and former CEO of nonprofit Trinity Health.
“There remain powerful drivers of cost in the system, and against all that we ask mostly lower income patients when they are sick and vulnerable to find the best price for services they desperately need. Have any of us actually done that?” Gilfillan said.