Transparency Push: New GAO Report on Hospital Pricing

A United States Government Accountability Office (GAO) report released October 2 to the House Committee on Energy and Commerce outlines users' experiences with hospital pricing data before the Centers for Medicare and Medicaid Services (CMS)'s 2024 updates, details the updated requirements introduced in 2024, and assesses CMS's enforcement of these regulations.

Following a rise in hospital service prices that have driven a nearly 50% increase in private health plan spending between 2012 and 2022, CMS began requiring hospitals to post their prices in 2021. In 2024, CMS updated its requirements to address some challenges with using the pricing data.

Although this a hospital requirement, the push for transparency in pricing, ownership and others areas is growing throughout the health care sector-including in long-term care, particularly on the relationship between ownership, cost and quality. New CMS ownership, management, and related party transparency regulations for nursing homes go into effect this month and, earlier this year, Congress focused on assisted living cost and quality transparency.

In the GAO's report, "Health Care Transparency - CMS Needs More Information on Hospital Pricing Data Completeness and Accuracy" stakeholders identified three main challenges users face when utilizing hospital pricing data to reduce healthcare costs: technical issues, complex pricing information, and data that is missing, incomplete, or potentially inaccurate. In addition, stakeholders reported that usability issues with hospital machine-readable files, prior to the 2024 requirements, have hindered widespread, systematic price comparisons between hospitals and effective negotiation for lower hospital service costs.

According to many stakeholders, patients seldom utilize hospital shoppable service pricing information and online price estimators for out-of-pocket costs due to these challenges and limited interest.

CMS updated the hospital price transparency requirements to help address some usability concerns and aimed to address challenges in using hospital pricing data, boost competition for hospital services and standardize machine-readable files and data elements. These changes should facilitate easier access and analysis for employers, health plans, and other stakeholders.

The GAO report recommendations include:

• CMS Administrator evaluate the completeness and accuracy of hospital price transparency machine-readable files to ensure they adequately support CMS's program goal and, if deficiencies are found, additional cost-effective enforcement activities should be implemented as needed.
• CMS Administrator gather stakeholder feedback or commission a study examining the completeness and accuracy of hospital files. This approach would help ensure that the transparency initiative achieves its intended purpose of providing usable pricing information.