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Many hospitals fail to post prices as required by new federal rules, report finds

Hospital Hallway
Posted at 8:14 AM, Aug 08, 2021

SAN DIEGO (KGTV) -- Some of San Diego’s largest hospitals are not complying with new federal regulations requiring medical centers to post their prices online for patients to review, according to a non-profit patient advocacy group.

Jacobs Medical Center at UC San Diego Health, Kaiser Permanente’s Zion Medical Center, Sharp Memorial Hospital and Sharp Chula Vista Medical Center all lack key pricing information required by the law, according to Patient Rights Advocate.

Kaiser rejected the group's findings, while UCSD and Sharp sought to clarify them. Their statements appear in full below.

As of Jan. 1, roughly 6,000 hospitals were subject to a federal rule requiring hospitals to post the prices they charge patients and the various rates they have negotiated with insurers.

The rule is designed to increase competition, drive down healthcare prices, and ultimately enable tech companies to build search tools allowing patients to shop for medical services like they shop for airline tickets or hotels.

However, Patient Rights Advocate said the vast majority are hospitals nationwide are failing to provide the necessary information. The group randomly surveyed 500 of the 6,000 hospitals subject to the rule and found 94 percent were not compliant.

The group’s initial survey did not analyze hospitals in San Diego, Bakersfield, or Santa Barbara, so PRA reviewed six additional hospitals at ABC 10News’ request.

The group said all six were not compliant with the federal regulations, including Dignity Health Memorial Hospital in Bakersfield, Santa Barbara Cottage Hospital, and the four San Diego hospitals mentioned above.

“They have to post all of these prices so that all of us can be well informed about what the costs are in healthcare,” said PRA founder Cynthia Fisher. “It allows every patient to know what is a fair price before you get care.”

The transparency rules have bipartisan support. They were first crafted by the Trump Administration. The Biden Administration is now seeking to strengthen the penalties on hospitals that don’t comply, proposing to raise the fines from $300 per day to a maximum of $5,500 per day starting next year.

At Jacobs, UCSD listed the price of several procedures as “variable” and did not include the cash price without insurance, PRA found. Many hospitals give patients a discount when they pay cash up front, and the federal regulations require hospitals to list discounted cash rates.

In a statement, UCSD explained the cost of many of its procedures is determined by a percentage rather than a fixed price, making it impossible to list certain prices in the required online format. “Consistent with CMS guidelines, we have listed the fixed rates where possible and, where that is not possible, have listed them as ‘variable,’” UCSD said in a statement.

Said Fisher, “If you can’t go in and see your plan and see the exact price you’d pay, they’re not compliant.”

In response to PRA's findings, Dignity Health Memorial Hospital said it was committed to price transparency and was "now working as quickly as possible to fully comply with the complex regulatory requirements."

The group said it was compiling and analyzing data to ensure it is both understandable and compliant with the federal rule. "We expect to begin posting this information over the next several months," Dignity Health said.

Kaiser called Patient Rights Advocate's findings “erroneous,” saying certain aspects of the federal regulations should not apply to it because the organization operates differently than most hospitals. Kaiser is an integrated health system, acting as both a hospital and an insurance plan.

“Kaiser Permanente has complied with the required elements for price transparency,” said spokeswoman Jennifer Dailard in a statement. “The patient rights advocacy group that conducted this survey is not a government entity with authority to interpret CMS requirements and erroneously categorized Kaiser Permanente as non-compliant for elements that should be deemed as non-applicable.”

PRA said Kaiser’s shoppable services file does not contain discounted cash rates, as required.

Santa Barbara Cottage Hospital also disputed PRA's analysis that it was out of compliance.

The patient rights group found Cottage Hospital's price list was missing required information, such as charges listed by specific payers and plans. Cottage Hospital only provided negotiated rates for one payer, PRA found.

Cottage Hospital's transparent pricing data also did not list the discounted cash prices for items and services, PRA said. Cottage Hospital told ABC 10News by email it posts its gross charges and offers a 30 percent discount for cash pay; PRA said the discount is not reflected in the files as required.

Cottage Hospital spokesman Bob Behbehanian said all of the rates for 19 insurance plans were posted online in separate tabs within the hospital's charge files. ABC 10News asked PRA to review Cottage Hospital's website a second time. The group still only found rates for one insurance plan.

Dignity Memorial Hospital Statement

“We support price transparency and empowering patients to understand their health care costs. We have offered price estimates to patients in advance of scheduled care for many years, and we will continue to do so going forward.

“Our first priority related to price transparency requirements was to expand our online tools to help patients estimate their out-of-pocket costs for hospital services based on their specific insurance situation. These enhanced online resources for patients were published on our hospital website by January 1st.

“We are now working as quickly as possible to fully comply with the complex regulatory requirements to publish our negotiated rates with health plans. In addition to compiling information from our many health plan contracts across our health system, we are analyzing significant amounts of data to ensure the information we publish appropriately represents our negotiated rates in a way that is understandable and complies with the federal rule. We expect to begin posting this information over the next several months.”

Kaiser Permanente Statement

"Kaiser Permanente has complied with the required elements for price transparency. The patient rights advocacy group that conducted this survey is not a government entity with authority to interpret CMS requirements and erroneously categorized Kaiser Permanente as non-compliant for elements that should be deemed as non-applicable. As a fully integrated system- health plan, hospitals and medical group all under a common umbrella - the Kaiser Permanente Plan Rates are our negotiated rate. Kaiser Permanente does not negotiate rates for other insurers to use our hospital services and does not have negotiated rates with other payers. Since there is only one Kaiser Permanente Plan rate, there is no negotiated minimum or negotiated maximum to include. Our standard charges file and shoppable services files are complete as they include all the information that is applicable in our integrated system. In addition, the regulation requires either a shoppable services list or a price estimation tool. Kaiser Permanente provided the shoppable services list."

UC San Diego Health Statement

"UC San Diego Health is committed to helping patients and their families make informed decisions about every aspect of their care, including the costs associated with the care they seek.

"The Centers for Medicare and Medicaid Services (CMS) has created new regulations, effective this year, with two requirements that aim to support pricing transparency in hospitals nationwide.

"The first requirement is to provide a consumer-friendly list of estimates for 300 “shoppable services” that are typically scheduled in advance. The information can be found here.

"Additionally, to make this information accessible to patients, UC San Diego Health developed a price estimator tool that goes beyond the CMS requirements. This tool provides transparency to patients about real-world charges for their health care. Importantly, the tool enables any patient – current or prospective – to enter their specific health plan, to better estimate the expenses they could expect for their health procedures and services.

"Regarding CMS’s requirement on fixed charges, most of our contracts establish the cost of a procedure or service terms that do not offer set or fixed prices for individual codes, but as a percentage of total gross charges. In such instances, the cost of one procedure or service would vary depending on the total gross charges billed for all care provided to that case. Other contracts include language of “not to exceed” or stop loss provisions that impact the final negotiated rate. The format required under the CMS provision does not allow for these types of variables. Although we could not generate a set dollar figure in such instances, we wanted to convey that a negotiated rate based on other criteria exists, so we populated those aspects of the spreadsheet with the term 'variable.' Consistent with CMS guidelines, we have listed the fixed rates where possible and, where that is not possible, have listed them as 'variable.'

"We encourage patients who have questions about their potential hospital charges to contact us for individualized estimates. We have a team of financial advisors available to help with estimates of potential financial responsibilities, provide financial assistance and discounts for patients who have no insurance or, for patients who qualify, help them enroll in available government programs."

Sharp HealthCare Statement

"Sharp HealthCare is committed to providing the highest quality care at an affordable price to the entire San Diego community. We fully support a high degree of price transparency so that consumers have a clear idea of their true out-of-pocket costs.
· Prior to these regulations, Sharp had already implemented a tool for estimating hospital costs. We are able to provide a personalized estimate of out-of-pocket information using this online service. We are constantly looking for new ways to innovate and make the process easier for consumers.
· Providing general commercial negotiated rates is confusing for consumers because costs vary by type of plan and coverage. The only way a consumer can know their true “out-of-pocket” costs is to use their specific insurance information applied to their specific type of care. Our tools and services help consumers navigate this complicated process and provide a personalized estimate."