It’s no secret that health care prices are all over the place. For a patient with commercial insurance, the cost of a cesarean section can range from under $2,000 to more than $40,000 just within the borough of Manhattan. But typically, the full cost of a medical procedure comes to light only after the bill arrives.
For years, hospitals have shielded the rates they negotiate with insurers — making it harder to call out the hospitals with the highest price tags and the health plans that agree to them.
That was supposed to change last January, when federal price transparency regulations took effect requiring hospitals to post their once-secret rates online. But more than a year later, the vast majority of hospitals in the U.S. still are not fully complying with the law. Accessing the pricing information that they do provide often remains difficult for the average person, and a federal official confirmed that the government has not handed out a single fine for non-compliance, despite hundreds of hospitals being flagged.
A survey of 1,000 hospitals nationwide, conducted between December and January, found that only about 14% were in full compliance with the price transparency regulations — and none of the 12 hospitals analyzed in New York City and Long Island were among them.
The findings were published this month in a report from PatientRightsAdvocate.org, a nonprofit that promotes price transparency as a way to empower patients and lower health costs. The group found that compliance increased from about 5.6% in July 2021, but remains low.
Many New York City hospitals have complied with the federal rule to some extent, but left certain key information out, the report showed.
We want broad enforcement, robust enforcement and to start fining these hospitals for not complying
“We want broad enforcement, robust enforcement and to start fining these hospitals for not complying,” said Cynthia Fisher, founder and chair of PatientRightsAdvocate.org.
In order to comply with the federal price transparency rule, hospitals have to post a downloadable file online with a list of charges for each procedure, separated out by health plan, as well as the discounted “cash prices” that they charge people without insurance. They are also supposed to post consumer-friendly pricing information for 300 “shoppable services” patients can plan for ahead of time, either in list format or in the form of a cost estimator tool that lets patients enter their insurance information and gauge their potential out-of-pocket costs.
Early on, critics said the federal government’s plan to fine hospitals $300 per day for violating the price transparency rule would not be sufficient to get them to reveal their rates. In November, the U.S. Centers for Medicare and Medicaid Services (CMS) announced that it would fine hospitals with more than 30 beds up to $5,500 daily, or about $2 million per year.
But so far, no fines have been issued, Patrice Martin, a spokesperson for CMS, confirmed Wednesday. As of last month, CMS had sent warning letters to 342 hospitals that weren’t following the rules and had issued 126 requests for corrective action plans, Martin said. She did not say whether any of these messages were for hospitals in New York.
Is price transparency possible?
Fisher is optimistic about what price transparency could accomplish if hospitals follow the law, calling it “a revolution in health care to shift the power to the consumer.”
She envisions a time when anyone would be able to easily use an app or search engine to compare the cost of an MRI at every health care provider in their area under their particular insurance plan, the way one might compare airline prices when planning a trip. Currently, medical cost estimates provided by hospitals to patients ahead of time are not binding, but Fisher said there’s no reason they can’t be.
“There are a lot of technology companies coming in trying to parse this data, and they need all of the hospitals to comply to be able to create a totally competitive marketplace across the country,” Fisher said.
Some health policy experts who study consumer behavior are skeptical that such a market will ever exist. “In general, we have not found that [past] price transparency efforts have had the effect that policy makers and others have hoped,” said Dr. Ateev Mehrotra, an associate professor of health policy at Harvard Medical School who has done research on price transparency initiatives.
Mehrotra noted that many patients are either unaware of price estimate tools when they are available or decline to take advantage of them. He added that consumer behavior is also influenced by factors other than expenses, such as a referral from a doctor or which health care providers are in someone’s insurance network.
That doesn’t mean cost information is useless, though, since it could highlight which hospitals have the highest prices, Mehrotra said. “Embarrassing people is a really important tool because hospitals really, really care about their reputation,” he added.
Unions in New York City and other organizations, including PatientRightsAdvocate.org, formed the Coalition for Affordable Hospitals in October to push for lower prices and more accountability among local hospitals. The union 32BJ SEIU, a member of the coalition, recently removed New York-Presbyterian from its health plan network because of hefty bills and has held rallies calling the health system out.
“Hospital overpricing is not unique to Presby,” said Kyle Bragg, president of 32BJ, in an interview on the price transparency report. “We have to get these hospital systems in line. There’s no reason why this information should be kept secret.”
In a statement, New York-Presbyterian said, “We care for everyone who walks through our doors, regardless of ability to pay. We are one of the largest providers of Medicaid in the state and we have an extensive financial aid policy.”
How New York hospitals are skirting the law
Many hospitals have only partially complied with the federal transparency rules. For instance, the PatientRightsAdvocate.org report found that about 85% of hospitals nationally provided cost estimator tools but did not provide the discounted cash price, which can sometimes be cheaper than the out-of-pocket amount a patient pays with insurance. And while many hospitals posted a file listing some of the rates they’ve negotiated with insurers for different procedures, the majority failed to include enough of their prices, or rates for all of the health plans they accept.
Some New York City hospitals were almost compliant, according to the report, such as Mount Sinai Hospital, which left out its discounted cash prices but included a complete list of rates it had negotiated with health plans. Mount Sinai did not respond to a request for comment.
Other hospitals missed the mark by a lot more. According to the report, hospitals that have not posted the rates they charge insurers include Montefiore Medical Center, Maimonides Medical Center, Stony Brook University Medical Center, and NYU Langone Tisch and Winthrop hospitals.
“Maimonides actually is in compliance, as confirmed with CMS,” Suzanne Tammaro, a spokesperson for the hospital, said in response to a query about the report. Montefiore and NYU Langone did not respond to a request for comment.
According to the report, New York-Presbyterian/Weill Cornell Medical Center left out rates for some health plans but included others.
“New York-Presbyterian Hospital has been committed to complying with the Hospital Price Transparency Rule since its inception,” said Angela Karafazli, a spokesperson for the hospital. “As the rule is clarified, we remain committed to continuously improving and updating the information we make publicly available for the benefit of our patients.”
Northwell Health responded to a request for comment about three hospitals the report said were noncompliant in different ways: North Shore University Hospital, Long Island Jewish Medical Center, and Lenox Hill Hospital.
All of the hospitals “have implemented a sophisticated web-based price estimator tool” and a “file that contains charges for a variety of services,” said Barbara Osborn, a spokesperson for Northwell. She added, “These hospitals continue to evaluate ways in which they can enhance their approach.”
But even when pricing information is available, it’s not always accessible. The negotiated insurance rates that have been posted online so far are typically contained in individual files buried on hospital websites that are difficult for the average person to access. Many hospitals have opted for .json files that are well suited to computer coding but have to be converted to a different format and cleaned up to be viewed in a spreadsheet.
While allowed by CMS, this approach means researchers, employers and others interested in the data may need a team of engineers to make heads or tails of it.
A similar price transparency rule for health insurers is set to take effect in July, potentially giving consumers more information to consider when choosing a health plan. Despite limited uptake so far with the hospital rule, Fisher is optimistic about that measure as well.
“When all of this information comes to light, employers and unions and every worker can choose their plans not just based on the summary of benefits,” Fisher said, “but what is the summary of the prices?”