Local Hospitals Violate Price Transparency Rules

Children’s Hospital of Wisconsin and Froedtert. File photo by Aalvarez89 / (CC BY-SA)

Americans overwhelmingly support hospital price transparency, with 94% in favor and 91% saying they would use this information to shop for the best prices. In theory this is mandated by the federal government: the Affordable Care Act required hospitals to make their prices transparent by publishing their list prices for all services they provide. And the Trump administration backed a federal Hospital Price Transparency Rule, which took effect on January 1, 2021, requiring hospitals to post all prices online in an easily accessible and searchable format.

But the most recent report on “Hospital Price Transparency” by the nonprofit Patients Rights Advocate (PRA), released in July, “analyzed the websites of 2,000 U.S. hospitals and found only 36% of them (721) to be fully compliant with all requirements of the rule.”

The report analyzed all states, with hospitals in Hawaii ranking as most compliant with 75% following all the rules, and hospitals in Vermont and South Dakota at the bottom, with zero hospitals in compliance. Wisconsin ranked 15th, higher than the national median, with 49% of hospitals in compliance.

In metro area Milwaukee, Children’s Wisconsin ranked the worst: it was non-compliant in eight of ten categories. But a spokesperson for Children’s Hospital told Urban Milwaukee that as of June (three months after the research for the latest PRA study was conducted), the hospital made its price information publicly available on its website and also has a team helping families receive estimates and explaining financial assistance.

Ranking second worst in the metro area was Orthopedic Hospital of Wisconsin in Glendale, which is affiliated with Ascension Wisconsin and was non-compliant in five of 10 categories.

Every Ascension hospital in metro Milwaukee was non-compliant, ranging from St. Francis (non-compliant in three categories) to St. Joseph and Elmbrook in Brookfield (both non-compliant in two categories) to the Ascension hospitals in Greenfield, Menomonee Falls and Waukesha (non-compliant in one category, that the price estimator tool fails to provide cash prices). Nationally, the report found that just 1% of hospitals in the huge Ascension chain were compliant with the federal transparency rules. (Urban Milwaukee has previously reported on the huge executive salaries paid and billions in cash and investments accumulated by the Ascension system.)

Froedtert Hospital was non-compliant in two categories, as was the Midwest Orthopedic Speciality Hospital in Franklin. But any level of non-compliance is a serious problem, PRA notes: “Meaningful price comparisons and substantial savings are possible only with full compliance with price disclosure rules.”

The four Aurora hospitals in the metro area were all fully compliant, as was the ProHealth Waukesha Memorial Hospital. Aurora is part of the large chain of hospitals run by Advocate Health, and only 76% of its hospitals (also located in five other states) were found in compliance with the federal rules, the report found.

The Hospital Price Transparency Rule is intended to empower healthcare consumers – patients, employers, and unions – with easier access to compare prices, the report notes. It requires hospitals to display standard charges for all items, services, and drugs by all payers and all plans, along with the minimum and maximum negotiated rates, and all discounted cash prices, as well as prices for the 300 most common shoppable services.

“Among the 721 compliant hospitals, some posted exemplary files – easily accessible, downloadable, machine-readable, and including all negotiated rates by payer and plan,” the report noted, listing just three that did so, including the University Hospital in Madison.

Urban Milwaukee also heard back from a spokesperson for Ascension hospitals, who said this: “We’re proud to be a leader in price transparency – not only complying with the rule but going beyond it, to offer consumers tools to estimate costs and provide feedback. We have received confirmation from the Centers for Medicare and Medicaid Services (CMS) – the only entity with the authority to validate a facility’s compliance with the federal price transparency rules – that no Ascension Wisconsin facility has received a Notice of Noncompliance from CMS.”

But the PRA has criticized the CMS for lax enforcement: “In June of 2022 (eighteen months after the rule’s inception), CMS imposed its first two civil monetary penalties… on hospitals for not complying with the rule. Both hospitals immediately came into compliance with exemplary files to date. Yet, in April of 2023, only two more hospitals were fined… Minimal, lenient enforcement by CMS has led most hospitals to continue to disregard the rule,” preventing consumers “from being able to compare prices, benefit from competition, and be protected from overcharges.”

The American Hospital Association released a statement in July blasting the PRA study, saying it “blatantly misconstrues, ignores, and mischaracterizes hospitals compliance with federal price transparency regulations. The AHA has repeatedly debunked point-by-point Patient Rights Advocate’s intentionally misleading ‘reports’ on price transparency, including earlier this year in a blog and op-ed.”

The statement also says hospitals have made progress in transparency, but the group sued the federal government to block the rules, only to have federal judge dismiss the suit, ruling that the hospitals were “attacking transparency measures generally” in a bid to limit patients’ insight into medical prices.

An earlier study by the PRA found that prices charged by hospitals for five common procedures, appendectomy, arthroscopic knee surgery, caesarian section, cataract surgery and “MRI of the lower extremity without contrast,” could cost as much as 5.7 times more at the same hospital when comparing insurance plan negotiated rates and could cost up to 31.3 times higher across hospitals in the same state.

In Wisconsin the cost of a CT scan “ranges from about $858 to $2,803,” a report by the Milwaukee-based, Wisconsin Institute for Law and Liberty (WILL) found. “This price variation means that better information on prices could lead to real savings for patients and businesses that provide insurance to employees” in a state that it notes has “the 4th highest hospital prices in the nation.”

“About 80% of healthcare goods and services are ‘shoppable’ meaning that the decision of where to get treatment does not have to be made immediately,” the WILL report notes.

Another PRA report cited a 2019 Journal of American Medicine paper which estimated that 25% of the more than $4 trillion in annual U.S. healthcare spending is administrative waste, errors, overcharging, and fraud. PRA estimated that $1.3 trillion in annual overspending on medical care in the U.S. could be saved through price transparency.

A 2023 NIH study offered a far lower estimate of potential savings from price transparency for stoppable services of up to $80.7 billion. Even that figure would be transformational for America’s medical care system.

In December the US. House of Representatives passed a new piece of bipartisan legislation, “‘The Lower Costs, More Transparency Act,’ which advances policies to force pharmacy benefit managers and hospitals to meet price transparency standards,” which passed by a vote of 320 to 71. The bill, which hospitals opposed, will next go to the Senate.