Study Finds Half of Hospitals Are Ignoring Law Requiring Price Transparency

Designed to make the costs of healthcare services available to patients, the federal Hospital Price Transparency Law took effect more than a year ago, on January 1, 2021. But a report published June 7 of this year in the Journal of the American Medical Association (JAMA) showed that fewer than 6% of a study sample of 5,000 U.S. hospitals are fully complying with the measure. In addition, 50% of those 5,000 hospitals were behaving as though the new law didn’t even exist.

The price transparency law requires that hospitals list on their websites two versions of the cash prices for the 300 most common procedures, such as X-rays and colonoscopies. One price format must be easily accessible for patients and must include a cost estimator; the second format must be machine-readable, meaning it’s essentially a spreadsheet. Making price information available allows patients to plan for the cost of a procedure as well as see the reduced cash price versus the price of going through insurance.

Become a Subscriber

Please purchase a subscription to continue reading this article.

Subscribe Now

Additional evidence comes from a recent audit of 1,000 randomly selected hospitals conducted by The audit found that, as of early 2022, noncompliance was standard in 99.5% of the hospitals owned by three of the largest U.S. hospital systems: HCA Healthcare, CommonSpirit Health, and Ascension. Of these three, the largest in the entire country (HCA Healthcare) was the worst offender, with zero compliance among its hospitals.

Major hospital systems that are posting price information on their websites include Kaiser Permanente, the Cleveland Clinic, and the Mayo Clinic. Price transparency typically supports a competitive environment and leads to reduced cost of care for patients. Because many hospital procedures are either elective or scheduled ahead of time, pricing information gives patients time to shop around and compare.

The new law includes penalty provisions for noncompliant hospitals, starting at fines of $300 and reaching a maximum of $5,500 per day. U.S. Health and Human Services (HHS) Secretary Xavier Becerra said penalties were increased in 2022, but to date no fines have been levied. Instead, hundreds of noncompliant hospitals have received HHS warning letters, which the agency is required to issue before it can impose fines. Becerra said some hospitals cited the cost of compliance as an obstacle, while others claimed they didn’t realize the law applied to them.