Hospitals may not be fully complying with law requiring price transparency

WASHINGTON (WJLA) — You wouldn't buy a car or a home without shopping around, but every year Americans make some of the biggest purchases of their lives without knowing the price upfront.

We're talking about medical procedures.

More than a year ago, a federal law went into effect, requiring hospitals to be transparent with their pricing but new research shows the vast majority of hospitals are not fully complying with the law, making millions while leaving patients in the dark.

When retired mechanic, Michael Rikard learned he needed a procedure to relieve blockages in his leg, he tried to find out what it would cost.

“There was no listing for it anywhere,” said Rikard. “Didn’t have nothing about what the procedures cost."

Rikard needed what’s called an arteriogram. A common procedure to x-ray blood vessels in his legs for the placement of stents. The average cost: $18,000 to $25,000. But Rikard got a bill for $92,000 for the routine outpatient procedure

“I was floored,” said Rikard. “I looked at that thing and I said ‘this is not right!’ I was in there 15 minutes for them to run a scope down my vein and put in two stents."

Nearly a year and a half ago, a federal law went into effect that requires hospitals to do something most had previously refused to do: Be upfront with all of their pricing, enabling patients to shop around and ultimately, lower the cost of health care. Hospitals must post actual prices, discounted cash rates and secret contracted rates. The problem is that a new study by PatientRightsAdvocate.org, a non-profit that tracks hospital pricing transparency and pushes for compliance, found that most hospitals are not fully complying with the law.

In Washington, D.C. for example, out of 12 hospitals reviewed, only two: Sibley Memorial and George Washington University Hospital were in full compliance, according to the report.

Cynthia Fisher is the founder of PatientRightsAdvocate.org. In 2021, her organization examined a thousand hospitals across the U.S. for compliance with the law.

"Our report is holding hospitals and hospital executives accountable." "They're making too much money by keeping patients in the dark," said Fisher.

The PRA report also reviewed the nation's three largest hospital systems: HCA Healthcare, Common Spirit Health and Ascension.

Their combined revenue for 2021 was $119 billion.

Their level of full compliance is 0.5%.

We sat down with Health and Human Services Secretary, Xavier Becerra, and asked him what he's doing about hospitals that aren't complying.

Fletcher: “Are you concerned that these powerful hospital groups are just flouting the law and acting with impunity?”

Becerra: “There are a lot of hospitals in America that have either tried to comply with the law or are doing a good job already and so I don't want to paint everyone with the same brush.”

Fletcher: “I can go on hospital websites here in DC and see they are not posting their prices. Am I missing something?

Becerra: “Remember, these laws are new. Putting them in force is taking a while.”

The hospitals have had nearly 18 months to comply. By HHS’s own analysis it will cost hospitals less than $12,000 to develop the necessary tools and elements of their websites to meet the transparency requirements.

As of December 2021, Becerra’s office had sent 340-notices of non-compliance to hospitals across the country but has yet to issue any fines, which can run in the millions.

We tried, unsuccessfully, to get the names of those hospitals through the Freedom of Information Act.

Fletcher: “Why keep the names of non-compliant hospitals from the public? Shouldn't American consumers have the right to see which hospitals are complying with the law when it comes to pricing transparency?”

Becerra: “We want the public to know who's doing it right and who's not. We also have to go through a process in this country. We believe in the standard that you are innocent until proven guilty.”

Fletcher: “But isn't the notice of non-compliance acknowledgment that you are not complying with the law?”

Becerra: “It’s a notice. We still have to go out there and prove it.”

Becerra said he is committed to holding hospitals accountable and making sure they comply, rather than making fines simply the cost of doing business. Historically, HHS has been accused of viewing hospitals and insurance companies as its customers rather than the American consumer. Becerra said he will prove otherwise.

“I have a responsibility,” said Becerra. “I have to take care of the health of people, not corporations. My job is to defend the law, enforce the law and comply with the law. And we're going to do that.”

Something Michael Rikard is counting on.

“He needs to get on the ball. He needs to assess the penalties,” said Rikard. “They're not going to do it as long as they can get by with it because they want to make their money."

As part of our reporting, we reached out to the 10 DC-area hospitals that, to varying degrees, were rated as non-compliant in the PatientRightsAdvocate.org report.

Three institutions, Howard University Hospital, United Medical D.C. and MedStar Health sent these statements:

Howard University Hospital:

1. It appears that the Patient Rights group is making an assumption on which payers should be listing in our report. This assumes that we have contracts with the same set of payers that the other hospitals do and that is simply just not the case.

2. Our files actually lists more than what CMS requires, which in multiple different ways is the reason why you don’t see gross charges for all of the line items. This is making the % with gross charges look to be a lower % because we listed things we didn’t actually need to in an effort to ensure compliance and actually give the patient more transparent and comprehensive information on how the services are actually paid by their insurer.

Additionally, CMS regulation requires that the public file must be accessible “(ii) Without having to establish a user account or password; and (iii) Without having to submit personal identifying information (PII).” There is at least one other hospitals in the report listed as “compliant” that requires a username and password to access the internet-based price estimator tool that is allowable as substitute to the requirements of publically available standard charges and stoppable services files. The requirement of a username and password to access this information is non-compliant to the CMS rule that information must be available to the public without requirement of a username or password.

United Medical DC:

United Medical Center is dedicated to the health and well-being of individuals and communities entrusted in our care. This dedication includes providing access to our list of services and the prices associated with such services. Our website was redesigned in 2021 and the price transparency information is currently listed here.

MedStar Health:

"MedStar Health is committed to helping patients and families make informed choices for their healthcare needs, and that includes providing information about the cost of care. Our organization has posted the information required by the regulation. We encourage patients to contact us to discuss their specific healthcare needs and receive a personalized estimate of their out-of-pocket costs."

Here is the link where we post our data and more information.

The 7News I-Team also reached out to the American Hospital Association for its position on the lack of full compliance among its members. AHA Director of Coverage Policy, Ariel Levin told us:

"The AHA supports price transparency and believes patients deserve the best possible information about what they should expect to pay for a scheduled service. Hospitals and health systems are working to help patients access useful information about their costs, including through the use of price estimators and other tools. The field is embracing new technologies that make accessing such estimates easier than ever.

The AHA has supported hospitals with implementation of these policies, including by sharing information and providing guidance, and we will continue to do so going forward."

The District of Columbia Hospital Association told us:

"Hospitals in the District have been acting in good faith in complying with the price transparency legislation. Compliance has included posting standard charges, shoppable services, and price estimators in order to help patients understand potential hospital costs. Our members are reviewing the report on price transparency but believe there are errors or omissions regarding the level of compliance by District hospitals. Our members are committed to improving price transparency resources as well as working with current and potential patients to ensure they are able to understand hospital costs and potential charges. This process is not static, and our members are committed to adapting their tools as necessary to meet the needs of our patients which are always at the center of all we do."

For Consumers:

If you find out that a hospital is not posting its prices, you can submit a complaint to the Center for Medicare/Medicaid Services (CMS) here.

See the PatientRightsAdvocate.org report to find out who was in full compliance

See the Federal Code that describes what hospitals must do to be in compliance with the law