The Government Accountability Office (GAO) released a report on the hospital pricing transparency initiative, finding that the Centers for Medicare and Medicaid Services (CMS) needs more information on hospital pricing data completeness and accuracy. In the report, GAO notes that in 2024, CMS updated some of the hospital pricing transparency requirements to address some of the challenges reported with using the pricing data but challenges remain with implementation and effectiveness of the requirements.
GAO reviewed the implementation of the hospital price transparency requirements. GAO reviewed relevant laws and regulations, CMS documentation, relevant studies, and comments on CMS’s updated 2024 requirements. GAO also analyzed enforcement actions taken by CMS against hospitals from 2021 through 2023. Interviews were also conducted with CMS officials, the American Hospital Association, and sixteen different stakeholder organizations representing various data users (including health plans, patients, and researchers).
The pricing transparency requirements at issue were implemented in 2021 by CMS, requiring hospitals to publicly post their prices in a file on their website. CMS was hoping that the increase in transparency would help to increase competition and lower prices. The stakeholders that GAO spoke with regarding the initiative, however, reported issues with the data, including inconsistent file formats, complex pricing, and perceived incomplete and inaccurate data, all of which have impeded the ability to make price comparisons across hospitals and largely prevented systematic data use.
CMS tried to alleviate those concerns and required hospitals to post the pricing data using a standardized file format as of July 1, 2024, and further required hospitals to affirm the completeness and accuracy of the data in the file.
To enforce the rule, CMS checks for the information on hospital websites and takes enforcement action against hospitals not in compliance, including issuing warning notices that state the compliance deficiencies in need of correction. From 2021 through 2023, CMS initiated 1,287 enforcement actions, with the majority of those initiated in 2023. CMS ultimately issued more than $4 million in civil monetary penalties to 14 hospitals that failed to take timely corrective action. The enforcement actions most often referred to deficiencies related to missing data, no machine-readable file, and noncompliance related to shoppable services or price estimator requirements.
“While the use of hospital price transparency data has been limited so far, many stakeholders we interviewed noted that they expect use to increase over time if the data usability challenges are overcome or addressed,” GAO wrote in the report. “Further, some stakeholders also noted that it will take health plans and employers time to figure out how to effectively use the pricing data as part of their price negotiations and their efforts to develop networks of health care providers.”
While GAO seems to acknowledge that CMS has made some progress on the ultimate end goal of transparency, the Office notes that “CMS does not have assurance that pricing data hospitals report are sufficiently complete and accurate, and CMS has not assessed such risks to determine if additional enforcement actions are needed.” Therefore, GAO states that CMS “does not know whether the data are usable to help increase competition” and while checking the accuracy and completeness of all submitted data may be a costly endeavor, GAO suggested CMS consider “using risk-based or random sampling.”
At the conclusion, GAO recommended that CMS assess whether hospital pricing data are sufficiently complete and accurate to be useful. The Department of Health and Human Services (HHS) agreed with the recommendation and will “explore the possibility” of assessing data for accuracy and completeness.