Factors Associated with Compliance to the Hospital Price Transparency Final Rule: a National Landscape Study

John Xuefeng Jiang; Daniel Polsky; Jeff Littlejohn; Yuchen Wang; Hossein Zare; Ge Bai

doi:10.1007/s11606-021-07237-y

Factors Associated with Compliance to the Hospital Price Transparency Final Rule: a National Landscape Study

J Gen Intern Med. 2022 Nov;37(14):3577-3584. doi: 10.1007/s11606-021-07237-y. Epub 2021 Dec 13.

Authors

John Xuefeng Jiang¹, Daniel Polsky^{2

3}, Jeff Littlejohn⁴, Yuchen Wang³, Hossein Zare², Ge Bai^{5

6}

Affiliations

¹ Michigan State University Broad College of Business, East Lansing, MI, USA.
² Department of Health Policy and Management, Johns Hopkins Bloomberg School of Public Health, Baltimore, MD, USA.
³ Johns Hopkins Carey Business School, Baltimore, MD, USA.
⁴ Turquoise Health Co., San Diego, CA, USA.
⁵ Department of Health Policy and Management, Johns Hopkins Bloomberg School of Public Health, Baltimore, MD, USA. gbai@jhu.edu.
⁶ Johns Hopkins Carey Business School, Baltimore, MD, USA. gbai@jhu.edu.

Abstract

Background: The Hospital Price Transparency Final Rule, effective January 1, 2021, requires hospitals to post online a machine-readable file that includes payer-specific negotiated commercial prices for all services. The regulation aims to improve the affordability of hospital care by promoting price competition. However, a low compliance level among hospitals would compromise the operational effectiveness of this regulation. Understanding hospitals' compliance status to the regulation has important implications for its enforcement effort and effectiveness assessment.

Objective: To analyze nationwide hospitals' compliance status to the Hospital Price Transparency Rule.

Design: Cross-sectional observational study.

Participants: A total of 3558 Medicare-certified general acute-care hospitals were examined.

Main measures: A binary compliance rating was generated by using data collected by Turquoise Health. "Noncompliance" means that no machine-readable file was posted or the posted file contains no commercial negotiated prices. "Compliance" means that a machine-readable file was posted with commercial negotiated prices for at least one insurance plan.

Key results: As of June 1, 2021, 55% of the 3558 Medicare-certified general acute-care hospitals we examined had not posted a machine-readable file containing commercial negotiated prices. Wide variations of compliance existed across states and hospital referral regions. A hospital's compliance status is strongly associated with the average compliance status of peer hospitals in the same market. Hospitals with greater IT preparedness, for-profit hospitals, system-affiliated hospitals, large hospitals, and non-urban hospitals had greater compliance. More concentrated hospital markets had greater average compliance.

Conclusions: Hospitals take into consideration the behavior of their peers in the same market when making price disclosure decisions. Compliant hospitals are likely to have better IT preparedness, more financial resources and personnel expertise to mitigate the cost required for the implementation of the Price Transparency Rule. The compliance cost, therefore, might be a barrier for some hospitals.

Publication types

Observational Study
Research Support, Non-U.S. Gov't

MeSH terms

Aged
Cross-Sectional Studies
Disclosure*
Hospitals
Humans
Medicare*
United States