Analysis: Hospital Price Transparency Data Lacks Standardization, Limiting Its Use to Insurers, Employers, and Consumers
In spite of a new price transparency rule that requires hospitals to publish the prices of common health services, comparing prices across hospitals remains challenging due to limited compliance with the law and a lack of standardization in the available data, a new KFF analysis finds.
The federal rule, which went into effect on January 1, 2021, aims to lift the veil on how much health plans pay hospitals for health services. To be compliant, hospitals must post payer-specific negotiated rates for medical services and products in two formats on their websites: in a machine-readable file that insurers, employers, health care providers, and other stakeholders can use to compare prices across providers, and in a consumer-friendly tool that allows patients to shop for lower-priced care.
Using data collected from large hospitals in all 50 states and the District of Columbia, the analysis finds limited compliance with the new federal rule. Only 35 of the 102 hospitals included in the analysis provide some payer-negotiated rates accessible to the public in a machine-readable file; only 3 provide payer-negotiated rates via consumer tools.
Even when hospitals are compliant, the lack of data standardization makes it difficult to compare prices across facilities. Many of the hospitals included in the analysis define and describe prices differently. For example, some hospitals include professional fees (e.g., for physician services) in the posted prices, other hospitals do not, and still others do not specify either way. Many hospital machine-readable files are inconsistently formatted and leave out key information, including the full range of payers and plans in a given region.
While the new price transparency data does not yet support price comparison across hospitals, it could in some cases facilitate analysis of price variation within a hospital. Using payer-negotiated rates from ten U.S. hospitals, the brief finds significant variation in the price of common services. For example, the price of a lower back MRI at a hospital in New Mexico ranged from $221 to $2,142 depending on the payer. The authors note that the available hospital data does not always clearly indicate the market in which a payer is operating; thus, an analysis of variation in prices by insurer market segment is not possible for most hospitals examined.
The brief is available on the Peterson-KFF Health System Tracker, an online information hub dedicated to monitoring and assessing the performance of the U.S. health system.