How Can Lawmakers Get Hospitals to Play by the Price Transparency Rules?
Sunday, June 18th, 2023
This week’s core story is about: Hospital price transparency and lawmakers getting health systems to play by the rules.
KNEAD TO KNOW
Former President Donald Trump pleaded not guilty to 37 federal charges related to his handling of classified documents after leaving office. Tuesday’s hearing launches what will likely be a long, dramatic, and politically divisive judicial process, with appeals that could take years to be resolved.
The Federal Reserve held interest rates steady, ending 15 months of increases while signaling future hikes could be ahead. The decision from the Fed came the same week the Labor Department reported inflation in May slowed to its lowest annual rate in over two years, with the consumer price index increasing just 0.1% in May, bringing the annual level to 4% for the month, down from 4.9% in April.
The Biden administration announced its plan for restarting student loan payments. After more than three years, student loan interest will resume starting September 1 and payments will be due starting in October, an Education Department spokesperson confirmed.
At least 28 states and the District of Columbia will celebrate Juneteenth tomorrow. Our newest federal holiday, officially known as “Juneteenth National Independence Day,” celebrates the end of slavery in the U.S., though only around half of the 50 state governments will officially recognize the day.
How Can Lawmakers Get Hospitals to Play by the Price Transparency Rules?
Lawmakers are searching for ways to get hospitals to play by the widely popular Trump-era price transparency rules, but most remain noncompliant. When a hospital can charge $4,000 for Tylenol and not tell a patient until they demand to know the price, something needs to change. So, what does the research say about hospital price transparency in the U.S.? And what can lawmakers do to get hospitals to play by the rules?
Congressional lawmakers have spent the past couple of years taking aim at the healthcare industry in various ways, scrutinizing drug manufacturers, insurers, and pharmacy benefits managers, among other sectors, for a host of issues.
Hospitals have understandably become one of the highest-profile targets of the fresh scrutiny after lawmakers pumped providers with $178 billion in COVID relief funding to help offset losses and care for the increased patient load during the pandemic.
Lawmakers are now beginning to question whether the wealthiest health systems actually needed that money.
In separate hearings over the past couple of months, House and Senate committees have questioned the role of hospital spending and consolidation in the rising costs of health care, including Medicare, which, as of now, is scheduled to be unable to fully pay claims beginning in 2031.
Another issue lawmakers have taken up is hospital price transparency.
Hospitals are subject to a Trump-era federal regulation aptly called the Hospital Price Transparency Rule, which took effect in January 2021.
The rule requires hospitals to publish a machine-readable list of the payer-negotiated prices, discounted cash prices, and standard charges for all items and services the hospital provides, along with a list of 300 shoppable services, of which 70 are specified by the rule and the remaining 230 are chosen by the hospital. The regulation also applies to health plans, requiring most commercial insurers and group payers to publish the out-of-pocket cost estimates for 500 items and services (enforcement of that rule began in July 2022).
The hospital price transparency rule is intended to help people make more cost-informed decisions about their care, hopefully incentivizing hospitals to provide better, more affordable items and services to attract patients.
The rule also helps shed light on the extreme variability in pricing among hospitals. According to Cynthia Fisher, founder of PatientsRightsAdvocate.org (PRA), MRIs can cost anywhere from $300 to $3,000 and C-sections from $6,000 to $60,000 depending on which hospital a patient chooses. "We're seeing even drug prices within the same hospital be 10 times different," Fisher says.
It’s not just lip service by experts. Take the case of Amanda Partee-Manders, a young mother who the Independent Women’s Forum says was charged $47,091.01 for a C-section in October 2021, including $4,000 for four doses of IV Tylenol, which went for “a fraction of the cost elsewhere.” Partee-Manders only became aware of the price of the Tylenol after demanding an itemized bill from the hospital.
The transparency rule is also incredibly popular. A PRA survey from last year found 87% of registered voters support the federal government requiring hospitals to post their prices, including 60% that strongly support the rule.
Despite the popularity, hospitals are lagging on compliance, leaving state and federal lawmakers to search for reasons why and figure out how to best get hospitals in line.
So, let’s go over what the research says about hospital price transparency in the U.S., and how lawmakers can get hospitals to play by the rules.
What the research says:
In February, the PRA released its latest Hospital Price Transparency Report, finding just 24.5% of 2,000 studied hospitals were in compliance with the federal transparency rule. The report found that while 51.3% of hospitals had posted negotiated prices, 49.8% still failed compliance because the majority of data was missing or incomplete. Of the nearly three-quarters of hospitals that were noncompliant, 5.8% had simply not posted any price information at all.
A KFF analysis that same month placed the blame on the rule itself, finding the inconsistent and poorly formatted price transparency data from hospitals results primarily from the rule’s “shortcomings in facilitating price comparisons,” including “a lack of standardization and specification in the reporting requirements.” KFF acknowledged that federal regulators have suggested ways for hospitals to format their data, but hospitals aren’t required to follow the guidance.
The PRA report came out just before the U.S. Centers for Medicare & Medicaid Services (CMS) released its own report suggesting 70% of hospitals were actually in compliance with two key parts of the rule: offering machine-readable files and patient-friendly versions.
Fisher says the CMS report is out of step with her organization’s report and other research on the topic, likening it to a “mere surface-level look” at the existence of the data and not whether it’s actually correctly listed. The CMS report also used a much smaller sample size, examining just 600 hospitals of the more than 6,100 nationwide (Fisher’s report included 2,000 hospitals), and even directly admits it “does not include all the requirements of the Hospital Price Transparency regulation.”
Either way, even if 70% of hospitals are compliant with those two key requirements, the PRA analysis shows they’re likely still failing to comply with the rule overall.
Why it matters:
So, how can lawmakers get hospitals to comply?
First, lawmakers can codify the transparency rules into law.
In March, Sophia Tripoli, director of health care innovation at the advocacy group Families USA, told the House Energy and Commerce Committee that despite the monetary penalty for noncompliance, hospitals simply aren’t incentivized enough to actually turn over their prices.
“It’s just about the business model of the sector, which is to keep prices hidden,” Tripoli told lawmakers. “There is not a strong enough financial incentive or requirement to disclose prices.”
Second, state lawmakers can start doing what the federal government has so far failed to do: enforce the rules.
A new bipartisan law in Colorado allows the state’s attorney general to go after hospitals that fail to comply with the federal transparency rules, carrying a fine of $20,000 per violation.
"People have the right to know exactly how much things cost and have the ability to actually shop around beforehand, rather than just get mysterious bills in the mail after the fact," Gov. Jared Polis said when he signed the bill.
PRA’s Fisher says the law is the toughest in the nation and should serve as a national model. "It means that for the first time, we're going to be able to be in the driver's seat to actually know prices and drive down the cost of care," she added. Fisher believes Colorado will be the first state where people can go online and shop for health care as they do anything else.
Whether Fisher ends up being right remains to be seen. One thing that’s certainly true, however, is that no matter how industry groups or lobbyists want to spin it, when a hospital can charge a new mother $4,000 for Tylenol and hide the price until she demands see it, something needs to change.
The Justice Department Released a Damning Report About Police in Minneapolis
Attorney General Merrick Garland on Friday announced the results of a two-year investigation into the Minneapolis Police Department, finding officers used excessive force, targeted racial minorities, neglected the safety of those in their custody, and violated the constitutional rights of citizens. The report was the result of a two-year probe following the murder of George Floyd by former Minneapolis police officer Derek Chauvin.
“We observed many MPD officers who did their difficult work with professionalism, courage, and respect,” Garland said at a news conference. “But the patterns and practices we observed made what happened to George Floyd possible.”
The city and police department have agreed to what’s known as a consent decree, which requires reforms to be overseen by an independent body and approved by a federal judge.
Cash-Strapped Russia Is Raising Nearly $4 Billion by Taxing Oligarchs
Russia unveiled a new windfall tax on corporations this week, hoping to raise an estimated $3.6 billion from oligarchs as its invasion of Ukraine and subsequent falling oil revenues under western sanctions continue to tap its coffers dry.
The 10% one-time tax targets companies that made profits of more than 1 billion Russian rubles (about $11.9 million) in 2021 and 2022, with analysts expecting the country’s metals and fertilizer industries to be hit the hardest.
Russian first deputy prime minister Andrei Belousov claimed the idea for the tax came from business owners themselves, who supposedly volunteered to pay the tax after having “colossal excess profits” the past two years.
The Grammys Issued New Rules on AI, Saying Only Human Creators Are Eligible for Awards
The Recording Academy updated its rules and guidelines this week, declaring that “only human creators are eligible” for the Grammy Awards, preventing purely AI-generated songs from winning in any category.
Human creators that use some AI in their songs can still be eligible, but works containing “no human authorship” won’t be eligible for any awards.
Artists are continuing to tool with AI, regardless of award outcomes. This week, Paul McCartney told BBC Radio 4 that he used AI to pull John Lennon’s voice from an old demo tape to create what he calls the “final Beatles record.”
The IRS Could Get $12 Back for Every $1 It Spends Auditing the Wealthy
A new report by researchers at Harvard University and the University of Sydney found for every additional $1 the Internal Revenue Service spends auditing taxpayers above the 90th income percentile, the agency generates over $12 in revenue. Audits of below-median income taxpayers yield $5 for every additional $1.
The report found auditing wealthy people is indeed more expensive, since they generally have more complicated tax returns, however, the additional expense is more than offset by the extra revenue generated. Audits of earners in the 99-99.9th percentile have a return of 3.2 to 1.
The report comes as the White House and House Republicans agreed to rescind $1.4 billion earmarked for the IRS in the recent debt limit bill. The agreement included a separate deal to take $20 billion from the agency over the next two years.
Women Are More Likely to Die After Having a Heart Attack than Men
A new study presented at the European Society of Cardiology’s Heart Failure 2023 conference last month found women are more than twice as likely to die after suffering a heart attack than men.
The researchers compared the adverse health outcomes of 884 women and men who suffered a heart attack. After adjusting for several potential risk factors, the team found 11.8% of women had died at 30 days (i.e., 30 days after the attack), compared to just 4.6% of men. Within five years, 32.1% of women had died, compared to 16.9% of men.
The researchers found older women experience even higher rates of adverse outcomes and the differences persist even when controlling for treatment times.
Humans Have Pumped So Much Groundwater It’s Caused the Earth to Tilt
A new study led by researchers at Seoul National University in South Korea found that by pumping massive amounts of groundwater and moving it elsewhere, humans caused the Earth to tilt 31.5 inches east between 1993 and 2010.
The study confirms previous research that estimated humans pumped 2,150 gigatons of groundwater between that period, associated with 0.24 inches of sea level rise over that time.
“Earth’s rotational pole actually changes a lot,” said lead author Ki-Weon Seo. “Our study shows that among climate-related causes, the redistribution of groundwater actually has the largest impact on the drift of the rotational pole.”
$280 billion - The amount of federal COVID relief funding that was potentially stolen by fraudsters, according to a new analysis by the Associated Press. The analysis found another $123 billion was wasted or misspent. Combined, the loss represents around 10% of the total $4.2 trillion in COVID relief funding the government has disbursed to date.
69% - The percentage of U.S. adults who think transgender athletes should only be allowed to compete on sports teams that conform with their birth gender, according to a new survey by Gallup. The figure is an increase from 2021, when 62% of Americans reported a similar belief.
27% - The percentage of all U.S. physicians who are foreign born, according to new data from the Bureau of Labor Statistics.
€200 - How much 750,000 18-year-olds in Germany will receive from the national government (equivalent to about $218) to spend on a variety of local cultural activities of their choice, including museum visits and tickets to films, theater performances, and concerts. The “KulturPass,” which cost the government €100 million to implement, is designed to encourage young Germans to experience culture locally and support the country’s cultural sector.
Long Video. The stunningly simple technique that’s helping fight drought. (11 min)
Short Video. Learn about T.J. Maxx’s “recession-proof pricing strategy.” (6 min)
Fun Video. The incredible engineering of Taco Bell’s Crunchwrap Supreme. (6 min)
Good Read. An expert Q&A about mRNA vaccines fighting cancer. (2,284 words; 11 min)
Neat List. Here are 200+ things Fox News has labeled “woke.”
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