PBGH Statement in Response to CMS Raising Penalties for Hospitals Failing to Make Prices Public

We are very pleased that the Biden administration is signaling its intention to aggressively implement the previous administration’s hospital price transparency rule. This rule, which will raise penalties as high as $2 million a year for large hospitals that fail to make prices public, enjoys bipartisan support and the strong support of employers and purchasers.

Fewer than half of hospitals have complied with the rule, which has now been in effect for more than seven months. But even the limited information gleaned from the rule thus far shows wide variation in prices between hospitals and between the rates negotiated by insurers. These variations demonstrate a fundamentally distorted market for hospital services.

Once hospitals are fully compliant, the rule will provide meaningful information to the people and entities paying medical bills in this country – consumers, employers and purchasers – to make smarter decisions about where to seek care.

The rule appropriately seeks further comment on improving the standardization of reported prices. Because hospitals use different billing systems, it can be difficult for consumers, employers and purchasers to compare prices between hospitals, even when those hospitals are compliant with the rule. We look forward to working with the administration to make recommendations on how to standardize reported prices between hospitals.

Price transparency is just one of the many reforms necessary to create a functional market for health care services. Going forward, price transparency should be paired with meaningful information on quality outcomes, patient experience and patient safety. Ultimately, public and private payers need to move away from the fundamentally broken fee-for-service payment system and to a system that holds providers accountable for total cost of care, patient experience and outcomes.