Abstract
Objective
To assess trends in hospital price disclosures after the Centers for Medicare & Medicaid Services (CMS) Final Rule went into effect.
Data Sources and Study Setting
The Turquoise Health Price Transparency Dataset was used to identify all US hospitals that publicly displayed pricing from 2021 to 2023.
Study Design
Price‐disclosing versus nondisclosing hospitals were compared using Pearson's Chi‐squared and Wilcoxon rank sum tests. Bayesian structural time‐series modeling was used to determine if enforcement of increased penalties for nondisclosure was associated with a change in the trend of hospital disclosures.
Data Collection/Extraction Methods
Not applicable.
Principal Findings
As of January 2023, 5162 of 6692 (77.1%) US hospitals disclosed pricing of their services, with the majority (2794 of 5162 [54.1%]) reporting their pricing within the first 6 months of the final rule going into effect in January 2021. An increase in hospital disclosures was observed after penalties for nondisclosure were enforced in January 2022 (relative effect size 20%, p = 0.002). Compared with nondisclosing hospitals, disclosing hospitals had higher annual revenue, bed number, and were more likely to be have nonprofit ownership, academic affiliation, provide emergency services, and be in highly concentrated markets (p < 0.001).
Conclusions
Hospital pricing disclosures are continuously in flux and influenced by regulatory and market factors.
Keywords: government regulation, health policy, health services research, healthcare economics, price transparency
What is known on this topic
All hospitals in the United States are mandated to publicly disclose the pricing of their provided services.
Adherence to this mandate over time has not been well defined.
What this study adds
Nearly 80% of hospitals were adherent to the price transparency mandate, with the majority of adherent hospitals disclosing pricing within the first 6 months of the mandate going into effect.
Increasing penalties for nondisclosure was associated with an increase in the number of hospitals that disclosed their pricing, suggesting that financial penalties were an effective incentive to increasing adherence.
1. INTRODUCTION
The Centers for Medicare & Medicaid Services (CMS) Hospital Price Transparency Final Rule, requiring all hospitals in the United States to publicly disclose the pricing of their services in machine‐readable files, went into effect on January 1, 2021. 1 To improve upon the initially low reported rates of pricing disclosures, 2 , 3 CMS increased the maximum penalty for nondisclosure from $300 per day to $5500 per day on January 1, 2022. 4 It is unknown how adherence changed over time, nor how it was affected by increased penalties for nondisclosure. We used a commercial dataset of public hospital pricing to assess trends in hospital price transparency in the first 2 years of the CMS Final Rule going into effect.
2. METHODS
The Turquoise Health Price Transparency Dataset, which aggregates public pricing data from machine‐readable files of United States hospitals, was used to determine the proportion of United States hospitals that publicly displayed pricing from January 1, 2021 to January 1, 2023. The database is updated weekly, with price disclosures added to the database as they are identified. Hospital characteristics that are publicly available via the CMS website are included in the Turquoise dataset. There are 1117 hospitals in the dataset that are not registered with Medicare and therefore do not have complete characteristic data available. These hospitals include community hospitals, faith‐based hospitals, veterans' hospitals, and long‐term rehabilitation hospitals. These unlisted hospitals are still required by the CMS Final Rule to disclose pricing of their services 1 and thus were included in the analysis. Additional characteristics such as annual revenue and Herfindahl–Hirschman Index (HHI) were taken from Healthcare Cost Report Information System's 2019 annual report, with HHI calculated from regional share of annual discharges.
Adherence to the Final Rule was defined as hospital compliance with disclosure of its pricing in a machine‐readable file on its website. Price‐disclosing versus nondisclosing hospitals were compared by annual revenue, hospital bed number, hospital type, hospital ownership, academic affiliation, emergency service capability, urbanicity, and market concentration defined by HHI. Pearson's Chi‐squared and Wilcoxon rank sum test were used for comparing groups. Causal impact analysis was done using Bayesian structural time‐series modeling to determine if the enforcement of increased penalties for nondisclosure was associated with a change in the trend of hospital disclosures. 5
3. RESULTS
As of January 1, 2023, 5162 of 6692 (77.1%) hospitals in the United States publicly disclosed pricing of their services. The majority of disclosing hospitals (2794 of 5162 [54.1%]) reported their pricing within the first 6 months of the final rule going into effect on January 1, 2021 (Figure 1). Compared with nondisclosing hospitals, disclosing hospitals had higher median annual revenue ($230 million vs. $54 million, p < 0.001), median bed number (92 vs. 46 beds, p < 0.001), and were more likely to be acute care hospitals (59.0% vs. 29.3%, p < 0.001), have nonprofit ownership (50.9% vs. 21.6%, p < 0.001), academic‐affiliation (36.9% vs. 8.8%, p < 0.001), provide emergency services (74.8% vs. 36.8%, p < 0.001), and be in highly concentrated markets (71.2% vs. 64.1%, p < 0.001) (Table 1).
FIGURE 1.
Trends in US Hospital Public Pricing Disclosures from January 1, 2021 to January 1, 2023. HHI, Herfindahl–Hirschman Index. The proportion of United States (US) hospitals in the Turquoise Health Price Transparency Dataset that publicly disclosed pricing from January 1, 2021 to January 1, 2023. Panel A depicts all hospitals, while other panels are stratified by for‐profit status (B), academic‐affiliation (C), acute care status (D), quartile of annual revenue earnings (E), Herfindahl‐Hirschman Index (HHI) score (F), and urbanicity (G). Dashed vertical line represents when penalties for non‐disclosure were increased on January 1, 2022. Annual revenue data and Herfindahl‐Hirschman Index was obtained from 2019 Healthcare Cost Report Information System Annual Report. Markets with a Herfindahl‐Hirschman Index score <1500 were categorized as unconcentrated, 1500–2500 as moderately concentrated, and >2500 as highly concentrated.
TABLE 1.
Characteristics associated with public pricing disclosure among all US hospitals.
| Characteristic | Nondisclosing (n = 1530) | Disclosing (n = 5162) | p value |
|---|---|---|---|
| Annual revenue in US dollars, median (IQR) | $54 million (24–169 million) | $230 million (60–996 million) | <0.001 |
| Bed number, median (IQR) | 46 (25–111) | 92 (30–232) | <0.001 |
| Academic affiliation, n (%) | <0.001 | ||
| No | 1396 (91.2%) | 3255 (63.1%) | |
| Yes | 134 (8.8%) | 1907 (36.9%) | |
| Emergency services capable, n (%) | <0.001 | ||
| No | 967 (63.2%) | 1302 (25.2%) | |
| Yes | 563 (36.8%) | 3860 (74.8%) | |
| Hospital type, n (%) | <0.001 | ||
| Acute care | 448 (29.3%) | 3045 (59.0%) | |
| Psychiatric | 348 (22.7%) | 270 (5.2%) | |
| Critical access | 216 (14.1%) | 1139 (22.1%) | |
| Children's | 24 (1.6%) | 85 (1.6%) | |
| Other/unlisted | 494 (32.3%) | 623 (12.1%) | |
| Hospital ownership, n (%) | <0.001 | ||
| Local government | 323 (21.1%) | 826 (16.0%) | |
| Federal government | 38 (2.5%) | 15 (0.3%) | |
| Private nonprofit | 330 (21.6%) | 2629 (50.9%) | |
| Private for‐profit | 217 (14.2%) | 845 (16.4%) | |
| Other/unlisted | 622 (40.7%) | 847 (16.4%) | |
| Herfindahl–Hirschman Index, n (%) | <0.001 | ||
| High | 981 (64.1%) | 3673 (71.2%) | |
| Moderate | 154 (10.1%) | 529 (10.2%) | |
| Low | 395 (25.8%) | 960 (18.6%) | |
| Urbanicity, n (%) | 0.007 | ||
| Urban | 1031 (67.4%) | 3284 (63.6%) | |
| Rural | 499 (32.6%) | 1878 (36.4%) |
Note: Annual revenue data and Herfindahl–Hirschman Index were obtained from 2019 Healthcare Cost Report Information System Annual Report. Markets with a Herfindahl–Hirschman Index score <1500 were categorized as unconcentrated, 1500–2500 as moderately concentrated, and >2500 as highly concentrated. Comparisons of categorical variables made with Pearson's Chi‐squared test and continuous variables with Wilcoxon rank sum test.
Abbreviation: IQR, interquartile range.
On Bayesian structural time‐series modeling, enforcement of penalties for nondisclosure on January 1, 2022 was associated with a significant increase in the proportion of disclosing hospitals (relative effect size 20%; 95% confidence interval [CI]: 6.7% to 36%, p = 0.002). A statistically significant increase in disclosures after January 1, 2022 was also observed among nonprofit hospitals (relative effect size: 18%; 95% CI: 5.7% to 33%, p = 0.002) but not among for‐profit hospitals (relative effect size: 13%; 95% CI: −9.1% to 43%, p = 0.16).
4. DISCUSSION
In this study of adherence to the federal mandate on price transparency, we found that 77% of hospitals were adherent to the CMS Final Rule 2 years after its implementation. The majority of adherent hospitals disclosed their pricing in the first 6 months of the final rule going into effect, with an additional increase in price disclosures after penalties for nonadherence were increased 1 year later, suggesting that increasing penalties for nondisclosure was an effective incentive for improving adherence to the mandate. Interestingly, this increase in disclosures was observed in nonprofit hospitals but not in for‐profit hospitals, suggesting that penalties were less effective in the for‐profit sector. Pricing disclosures were less prevalent in regions with low market concentration, suggesting that local competition did not incentivize price disclosure.
Despite approximately 23% of US hospitals being nonadherent to the Final rule, only 14 hospitals have been penalized for nondisclosure as of March 21, 2024, with all penalties enforced after January 1, 2022, when penalties were increased. 6 All penalized hospitals were penalized in part for nondisclosure of pricing in a comprehensive machine‐readable file on their websites.
This study is limited by constraints of the Turquoise Health dataset, which is updated weekly but may lag behind actual pricing disclosure on hospital websites. Although other authors have analyzed the prevalence of hospital price disclosure after the CMS Final Rule went into effect, 3 , 7 , 8 , 9 these only included acute care hospitals and only looked at price disclosure at one or two points in time. To our knowledge, this study is the first to provide granular data on the incidence of price disclosures over time and to include all US hospitals. As price transparency becomes a more active area of research, it is important to recognize that hospital pricing disclosures are continuously in flux and influenced by regulatory and market factors.
FUNDING INFORMATION
The authors of this study have no funding to report.
CONFLICT OF INTEREST STATEMENT
The authors of this study have no relevant financial interests to disclose.
ACKNOWLEDGMENTS
None.
Brant A, Lewicki P, Rhodes S, Zhu A, Shoag J. Trends in hospital price transparency after implementation of the CMS Final Rule. Health Serv Res. 2024;59(4):e14329. doi: 10.1111/1475-6773.14329
REFERENCES
- 1. Health and Human Services Department . Medicare and Medicaid Programs: CY 2020 hospital outpatient PPS policy changes and payment rates and ambulatory surgical center payment system policy changes and payment rates. Price transparency requirements for hospitals to make standard charges public. 84 Fed. Reg. 65524–65606 (November 27, 2019).
- 2. Haque W, Ahmadzada M, Allahrakha H, Haque E, Hsiehchen D. Transparency, accessibility, and variability of US Hospital Price data. JAMA Netw Open. 2021;4(5):e2110109. doi: 10.1001/jamanetworkopen.2021.10109 [DOI] [PMC free article] [PubMed] [Google Scholar]
- 3. Gondi S, Beckman AL, Ofoje AA, Hinkes P, McWilliams JM. Early hospital compliance with federal requirements for price transparency. JAMA Intern Med. 2021;181(10):1396‐1397. doi: 10.1001/jamainternmed.2021.2531 [DOI] [PMC free article] [PubMed] [Google Scholar]
- 4. Hut N. CMS finalizes changes to the price transparency penalty, inpatient‐only list and more for 2022. Healthcare Financial Management Association. https://www.hfma.org/topics/news/2021/11/cms-finalizes-changes-to-the-price-transparency-penalty--ipo-lis.html
- 5. Brodersen KH, Gallusser F, Koehler J, Remy N, Scott SL. Inferring causal impact using Bayesian structural time‐series models. Ann Appl Stat. 2015;9(1):247‐274. [Google Scholar]
- 6. CMS.Gov . Enforcement actions. Accessed April 8, 2024. www.cms.gov/priorities/key-initiatives/hospital-price-transparency/enforcement-actions
- 7. Ji Y, Kong E. US Hospital characteristics associated with price transparency regulation compliance. JAMA Health Forum. 2022;3(6):e221702. doi: 10.1001/jamahealthforum.2022.1702 [DOI] [PMC free article] [PubMed] [Google Scholar]
- 8. Jiang JX, Polsky D, Littlejohn J, Wang Y, Zare H, Bai G. Factors associated with compliance to the hospital price transparency final rule: a National Landscape Study. J Gen Intern Med. 2022;37(14):3577‐3584. doi: 10.1007/s11606-021-07237-y [DOI] [PMC free article] [PubMed] [Google Scholar]
- 9. Kong E, Ji Y. Provision of hospital Price Information after increases in financial penalties for failure to comply with a US Federal Hospital Price Transparency Rule. JAMA Netw Open. 2023;6(6):e2320694. doi: 10.1001/jamanetworkopen.2023.20694 [DOI] [PMC free article] [PubMed] [Google Scholar]