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Are hospital systems following price transparency rules?

Price transparency tools are required to be in place for hospital surgeries and procedures, but are consumers using it and are hospitals compliant?

COLUMBUS, Ohio — On Jan. 1, hospitals across the country were required to display pricing for surgeries and procedures in a consumer-friendly format. The rule to make visits more transparent was implemented by The Centers for Medicare and Medicaid.

“There's over 70,000 billing codes. In our system, the average American only has a vocabulary of about 44,000 words. So I don't think it's useful for most folks,” said Loren Anthes, a senior fellow at the Centers for Community Solutions in Cleveland. “I think what the price transparency tool does is it points us in the direction of trying to understand more about why things cost, what they cost in health care. It's a significant part of our economy, it's 20% of our economy. So you know, what are we getting for that investment?”

The Georgia-based company ZeaMed has been following compliance with hospitals. According to its founder Dr. Chandra Bondegula, the company began in 2018 to bring transparency and affordability to Americans with a searchable tool to track data and pricing. They have analyzed more than 5,000 hospitals nationwide.

“It took us almost more than close to three and a half months to take all the files analyzed,” said  Bondegula. “We have done [this] five times because we wanted to make sure. Sometimes the data was not opening, sometimes systems were down, so we have to do multiple times.”

The findings show 1,688 hospitals out of the more than 5,000 examined gave were compliant according to ZeaMed tool. Bondegula said 67% were not compliant.

“If CMS is going to collect the penalties from these hospitals,” Bondegula says, “they can collect $287 million.”

In Ohio, out of 180 hospitals analyzed, only 31 hospitals were compliant, 157 hospitals, or 84% are non-compliant, according to ZeaMed.

Bondugula says CMS could penalize these hospitals up to $13 million.

“What the research tells us is that most people don't use this price transparency tools to make choices,” said Anthes. “And in fact, once they do know more about the price, they're actually more likely to utilize more services.”

Anthes says the price tag listed is rarely the price you will pay.

“The real dollar amount comes down to a negotiation between insurance companies and the providers. So those prices may be much higher than what insurance companies end up negotiating, they might be much lower. And even then there is always a reconciliation process between people and how they get built,” said Anthes. “So what I'd rather have happen is some leadership out of government, leadership from our policymakers to, to take advantage of the information they have available to them, and come up with some strategies to lower the cost for individuals.”

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