Hospitals are on the hook for another set of federal rules to help patients understand how much a procedure will cost them. But experts say the requirements are unlikely to save patients money just yet.
The U.S. Centers for Medicare and Medicaid Services has started enforcing new rules that mandate hospitals to publish average reimbursements from health insurers for specific services and streamline how medical facilities report drug prices as of Jan. 1.
The new rules mark the most recent ramp-up of price transparency regulations, which has become a focus for health officials trying to quell high health care spending. Yet those efforts largely haven’t trickled down to patients; a bulk of hospitals, including in New York, are out of compliance with current rules, and if they do meet the requirements most pricing information is still only available in dense, machine-readable files, that is, they require a computer programmer to interpret.
Experts say that currently available data likely won’t ever help patients shop for health care services because of the complexity of developing medical prices in the U.S., though better information could set the foundation for greater transparency down the line.
“Shopping for health care is not like shopping for eggs. When I buy eggs, they are not asking me my age and my weight and my medical history,” said Joe Wisniewski, a hospital price transparency data expert with Turquoise Health, a San Diego-based company that aggregates medical cost information. “That’s never going to change.”
Wisniewski said that the onus should not be on patients to search through data files and tally up different line items to understand how much their health care will cost, but rather hospitals and insurers should take responsibility for providing price information upfront.
Federal health officials first required hospitals to publish their prices in regulations enacted in 2021 under the first Trump administration. The rules required hospitals to annually publish a full list of prices in a machine-readable file as well as a consumer-friendly tool showcasing the prices of 300 shoppable goods and services.
Hospitals are now required to report additional pricing data in three different buckets: standardization of drug units to help analysts compare medication costs across hospitals, “modifiers” tacked on to procedures that may change the standard price of a service and “estimated allowed amounts,” an average reimbursement from specific insurers based on old health claims.
The final metric could be the most useful to patients, as it’s the closest thing we have to what they might actually pay for a specific service based on their insurance plan, said Elisabeth Benjamin, vice president of health initiatives at the Midtown-based nonprofit Community Service Society, which helps patients navigate medical bills.
Wisniewski said that it takes time for hospitals to report new metrics and that many have faced challenges meeting requirements that were previously in effect. Just half of U.S. hospitals – and 41% in New York – are in full compliance with machine-readable file requirements, although the majority of hospitals post data files at the very least, according to data compiled by Turquoise Health.
Wisniewski said that lagging compliance is largely due to technical and unintended data errors that are simple to correct, and that he expects to see compliance go up as hospitals get used to new requirements in the coming months. Hospitals that do not post their data are subject to fines that could amount to $2 million a year for the largest facilities, according to CMS. But that’s a drop in the bucket for some health systems; New York-Presbyterian Hospital, the city’s largest, brought in $12.4 billion in revenue last year.
Still, fines are rare. The federal government has collected a total of $4 million in penalties from 14 actions related to the hospital price transparency rule since it went into effect in 2021, according to a November report released by the Office of the Inspector General.
Brian Conway, a spokesman for the Greater New York Hospital Association, which represents 200 hospitals in New York and surrounding states, said “GNYHA members take these new requirements very seriously and are making their best effort to comply.”
Benjamin, however, said that more efforts are needed to make sure that consumers can access pricing information and make informed decisions about their care.
“Hospitals, although they are required to be nonprofit charities in New York state, are run like big businesses,” Benjamin said. “Why would you make your prices more transparent if you didn’t have to?”
