Federal Rules Aren't Specific Enough to Ensure Hospitals Provide Comparable Data

1 year ago

Since 2021, federal law has required hospitals to publicly post information about their standard prices and negotiated discount rates for common health services to encourage consumers to compare prices and to promote competition.

To date, however, the transparency data currently shared by hospitals to comply with the law are messy, inconsistent and confusing, making it challenging, if not impossible, for patients or researchers to use them to compare prices across hospitals or payers, a new KFF analysis finds.

Shortcomings in the available data include:

• There are inconsistencies in how the data connect specific services with prices, especially for episodes of care that may combine multiple items into one charge, making comparisons difficult.

• The quality of the data varies widely, including some instances with excessively low or high values for negotiated rates that likely stem from errors. For instance, for hip and knee replacements, the data suggest some hospitals’ prices are under $1,000 while others are more than $1 million.
• Crucial pieces of information for interpreting the applicability of price are missing, such as contracting method and the payer class (i.e. Medicare, Medicaid and commercial).

Drawing on hospital price transparency data compiled by Turquoise Health, the analysis provides several examples that illustrate the difficulty in drawing meaningful conclusions from available data about the prices for specific services at different hospitals or for different payers.

Many of these shortcomings stem from a lack of specificity and standardization in the requirements for what hospitals must report and how they report it. To address these challenges, federal regulators have suggested specific ways for hospitals to format and validate their data, but hospitals are not required to follow that guidance.

The analysis, Ongoing Challenges with Hospital Price Transparency, is available through the Peterson-KFF Health System Tracker, an online information hub that monitors and assesses the performance of the U.S. health system.