Clinical laboratories should take a proactive approach to ensure compliance with current price transparency regulations
Price transparency in healthcare continues to be a focus of the Centers for Medicare and Medicaid Services (CMS). As of this ebrief, the agency has cited nearly a dozen hospitals this year that failed to, wholly or in part, follow through with federal legislation due to technical issues.
The citations, paired with President Trump’s executive order from February on price transparency, demonstrates a growing trend toward costly enforcement.
It’s not clear from the documentation posted by CMS if any of this involves price transparency with clinical laboratory tests. Labs that operate within hospitals or health systems are subject to the executive order; thus, diagnostic test pricing estimates are subject to transparency mandates.
Based on enforcement actions posted online by CMS, it’s clear that the agency is looking into technical issues of price transparency requirements that have little to do with diagnostic medicine. From that perspective, clinical laboratory teams may want to pass this Dark Daily ebrief along to their IT department and business analysts, whose work is drawing criticism from CMS at some hospitals.
The entire lab team should be proactive on the issue of price transparency.
“Imagine how a one-on-one conversation with a patient would go if a physician explained that a routine cholesterol test sent to Lab A would cost five times that of Lab B. Anyone think the patient would choose Lab A?” wrote Bryan Vaughn, senior vice president, health systems and mid-America division, Labcorp, in an article he penned for the lab company’s website. (Photo copyright: Labcorp.)
Hefty Fines and Warnings from CMS
According to CMS, already in 2025, 10 hospitals have received civil monetary penalty (CMP) notices of hefty fines for non-compliance. They include:
Arkansas Methodist Medical Center, Paragould, Ark. $309,738
Northlake Behavioral Health System, Mandeville, La. $257,180
Lawrence Rehabilitation Hospital, Brick, N.J. $120,120
Community Care Hospital, New Orleans, La. $93,214
Hill Hospital of Sumter County, York, Ala. $84,216
Bucktail Medical Center, Renovo, Pa. $75,582
D.W. McMillan Memorial Hospital, Brewton, Ala. $71,852
First Surgical Hospital, Bellaire, Texas $62,016
CCM Health, Montevideo, Minn. $55,611
Southeast Regional Medical Center, Kentwood, La. $32,301
Payments for citations are due 60 days after receiving the CMP notice.
Trump’s Executive Order
CMS’ price transparency focus comes alongside President Trump’s Executive Order 14221, “Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information,” which the administration put out in February of this year, CMS noted.
As covered in the March 31 issue of The Dark Report, a sister publication to Dark Daily, Trump’s order is an expansion of his previous price transparency ruling, which went into effect at the start of 2021.
At that time, hospitals were required to “provide clear, accessible pricing information online about the items and services they provide” that was easy understand and to use, and machine-readable files listing all services and items available, CMS noted.
Impact on Clinical Laboratories
CMS’ updated requirements and refreshed reinforcement against healthcare organizations remain pertinent to hospital laboratories mostly due to extreme variations in test pricing.
“Reports continue to point out wide differences in the prices of routine laboratory testing across settings. Yet, routine lab testing may be some of the most comparable procedures in healthcare, with minimal differences in methods or quality,” wrote Bryan Vaughn, senior vice president of health systems and the mid-America division at Labcorp, in an article he penned for the lab company’s website.
Vaughn cited as much as a $600 difference found between metabolic or lipid panels and other standard lab tests.
It behooves clinical labs to verify that the information they provide to consumers online about test prices is indeed easy to understand and meets the spirit of the executive order and CMS. Failure to do so could be costly to a health system or hospital.
Only about a third of the hospitals surveyed are in full compliance with giving public access to prices, the watchdog group contends, but the AHA disputes its methodology
It’s been almost four years since the Centers for Medicare and Medicaid Services (CMS) enacted its Hospital Price Transparency rule which requires hospitals—including their medical laboratories—to make their prices available and easily accessible to the public. But according to a 2024 report from PatientRightsAdvocate.org (PRA), just 34.5% of reviewed hospitals are fully compliant with the transparency rule. That’s a slight decrease from the 36% compliance rate the PRA listed in its 2023 report, the watchdog group stated in a blog post.
Released on Feb. 29, this was the group’s sixth semi-annual hospital price transparency report since the CMS rule took effect in 2021.
The rule “requires hospitals to post all prices online, easily accessible and searchable, in the form of (i) a single machine-readable standard charges file for all items, services, and drugs by all payers and all plans, the de-identified minimum and maximum negotiated rates, and all discounted cash prices, as well as (ii) prices for the 300 most common shoppable services either as a consumer-friendly standard charges display listing actual prices or, alternatively, as a price estimator tool,” the report states.
The required viewable prices are to be for, among others, medical imaging, clinical laboratory testing, and outpatient procedures such as a colonoscopies, etc.
“With full transparency, consumers can benefit from competition to make informed decisions, protect from overcharges, billing errors, and fraud, and lower their costs,” the report states. “Employer and union plans can use pricing and claims data to improve their plan designs and direct members to lower cost, high-quality facilities. However, continued noncompliance impedes this ability.”
At any time, the US Department of Justice (DOJ) could decide to file charges against a hospital or a clinical laboratory for not posting their prices on their websites in compliance with the federal rule. Such an action by DOJ officials would be to specifically put the entire industry on notice that there will be consequences for non-compliance.
The PRA’s report provides hospitals and clinical laboratories with a reminder that consumer watchdogs are also monitoring compliance.
“Our comprehensive study of 2,000 hospitals indicates nearly two-thirds (65.5%) of hospitals reviewed continue failing to fully comply with the rule, yet the Centers for Medicare and Medicaid Services (CMS) has only fined fourteen hospitals for noncompliance out of the thousands found to not be meeting all of the rule’s requirements. When hospitals don’t post their prices, they can charge whatever they want,” wrote PRA Founder and Chairman Cynthia Fisher (above) in a letter to President Biden. Hospital medical laboratories are also required to post their prices for tests. (Photo copyright: PatientRightsAdvocate.org.)
To compile their report, PRA analysts examined the websites of 2,000 US hospitals between September 3, 2023, and January 13, 2023, and found that 1,311, or 65.5%, were not in full compliance, mostly due to “missing or significantly incomplete pricing data,” the report states.
More than 6,000 licensed hospitals operate in the US, the report notes. The group said it focused on hospitals owned by the largest US health systems.
Among the notable findings:
The 2023 report found that 98% of Kaiser Permanente’s 42 hospitals were in full compliance with the rule, but in the 2024 study, none were compliant because the hospitals began posting multiple files instead of a single file.
In total, 103 hospitals rated as noncompliant in the previous report were found to be compliant in the new analysis. Conversely, 135 hospitals previously rated as compliant were listed as noncompliant in the 2024 report.
The report lauded three hospitals for posting “exemplary files” that were “easily accessible, downloadable, machine-readable, and including all negotiated rates by payer and plan.” Those were Cape Cod Hospital in Hyannis, Mass.; Christus Santa Rosa Medical Center in San Antonio; and UW Health University Hospital in Madison, Wis.
In its discussion of the findings, PRA called on CMS to step up enforcement of the pricing transparency rule. The group also wants the government to close what it describes as the “estimator tool loophole,” which allows hospitals to list non-binding price estimates and price ranges instead of concrete prices.
“Price estimator tools do not achieve the goals of price transparency policy and fundamentally undermine the intent of the regulations,” the PRA’s report contends.
In response to the 2023 PRA report, AHA Group Vice President for Public Policy Molly Smith issued the following statement, “Once again, Patient Rights Advocate has put out a report that blatantly misconstrues, ignores, and mischaracterizes hospitals’ compliance with federal price transparency regulations. The AHA has repeatedly debunked point-by-point Patient Rights Advocate’s intentionally misleading ‘reports’ on price transparency.”
Citing CMS data, Smith said that as of 2022, 70% of US hospitals had complied with two key federal rules:
One requiring hospitals to post machine-readable files with pricing information.
The other mandating a list of prices for at least 300 “shoppable” services.
More than 80% of hospitals had complied with at least one of the rules, she contended in an AHA press release.
Speaking to the New Orleans Times-Picayune, PRA Founder and Chairman Cynthia Fisher said her group performs a more in-depth study of pricing data compared with CMS.
“They did not do a comprehensive review,” she told the publication. “We do a deep dive for full compliance.”
The PRA study came on the heels of a January report from Turquoise Health that offered a rosier assessment of hospital compliance, albeit with different criteria. According to the Turquoise report, as of Dec. 15, 2023:
90.7% of 6,357 US hospitals had posted machine-readable files,
83.1% posted information about negotiated rates, and
77.3% posted cash rates.
The Turquoise Health end-to-end price transparency platform uses a 5-point system to rate the quality of hospitals’ machine-readable files and said that more than 50% scored five stars. Clinical laboratory managers and pathologists may find it timely to review their lab organization’s compliance with this federal price transparency rule.
Presented by: Rachelle Galant, Gregory Stein, Christopher Price Transparency: What Labs Need to Know Now about Existing Regulations and Pending Legislation by Rachelle Galant, Gregory Stein, Christopher https://www.darkdaily.com/wp-content/uploads/R-Galant-C-Ho-G-Stein-730-Strand10.mp3 PDF copy of the Presentation Slides...
Proposal comes as patient advocacy group reports poor compliance by hospitals with the federal price transparency regulation; AHA pushes back
Recent data compiled by Patient Rights Advocate, a non-profit group dedicated to nationwide healthcare transparency, appears to indicate that as many as two thirds of US hospitals continue to ignore hospital transparency rules established by Congress in 2021, according to an op-ed published in the Washington Examiner.
This may be why the Biden Administration has now proposed new amendments aimed at strengthening those requirements. According to KFF Health News (formerly Kaiser Health News), this new proposal “aims to further standardize the required data, increase its usefulness for consumers, and boost enforcement.”
However, “the goal of exact price tags in every situation is likely to remain elusive,” KFF Health News noted.
“Noncompliant hospitals are preventing patients and payers from shopping around for high-value care—and inflating healthcare costs in the process,” wrote Sally C. Pipes, President and CEO of Pacific Research Institute, in her Washington Examiner column.
Pathologists who were near the top of a Health Care Cost Institute (HCCI) list of medical specialties that most often billed out of network may be affected by CMS’ proposed new amendments to the transparency rule.
“The nonprofit group Patient Rights Advocate just published its fifth report exploring how hospitals are complying with federal price transparency requirements. About two-thirds are still flouting the rules. That’s unacceptable,” wrote Sally Pipes (above), President and CEO of Pacific Research Institute, in an op-ed she penned for the Washington Examiner. Federal law also requires clinical laboratories to post their prices for testing. (Photo copyright: The Heartland Institute.)
Hospitals, Clinical Laboratories Required to Post Chargemaster Prices
That rule also required hospitals to provide a list of charges for at least 300 “shoppable services,” including at least 14 laboratory and pathology tests.
“We’re closer to that, but we’re not there,” Gerard Anderson, PhD, a professor at the Johns Hopkins Bloomberg School of Public Health, told KFF. The goal may be the kind of pricing transparency that consumers are accustomed to when purchasing goods and services, but healthcare, he said, poses unique challenges.
“Each patient is unique and uses a slightly different bundle of services,” Anderson added. “You might be in the operating room for 30 minutes, or it might be 45. You might need this lab test and not that one.”
The KFF Health News story noted that health insurers have been subject to even stricter regulations, “with more prescriptive details and tougher penalties for noncompliance,” since 2022. CMS’ latest proposed amendments would bring requirements for hospitals that are more in line with those that apply to payers, KFF reported.
As described in the Federal Register, the proposed rule aims to:
Require hospitals to include a new data element known as the “consumer-friendly expected allowed charges,” KFF Health News noted.
Require hospitals to “affirm the accuracy and completeness of their standard charge information displayed in the MRF.”
Require hospitals to place a link to pricing information in the footers of their web pages.
The rule also includes provisions for enhanced enforcement of pricing transparency requirements. Under one proposal, CMS would publicly identify hospitals that are not in compliance.
Jeffrey Leibach, MBA, a healthcare finance strategist and Partner with the consulting firm Guidehouse, told KFF Health News that the new rules will make it easier for third-party data firms to create online price comparison tools. “And, ultimately, consumers who want to shop will then find this data more easily,” he said.
The proposal comes on the heels of a July report from Patient Rights Advocate (PRA) indicating that only 36% of US hospitals were in full compliance with the current transparency requirements. The report was based on an analysis of 2,000 hospital websites. However, that was an improvement over earlier reports. In February, the group reported that 24.5% were fully compliant, compared with 16% in August 2022.
Most hospitals in the report posted negotiated prices, but in many cases, “their pricing data was missing or significantly incomplete,” PRA contended. A total of 69 hospitals “did not post a usable standard charges file,” the report stated.
PRA Uses Humor to Highlight Discrepancies, AHA Pushes Back
According to KFF Health News, PRA is running a satirical ad campaign in which retailers adopt the “hospital pricing method,” listing estimates on store shelves instead of actual prices.
“When they ask for a price, we give them an estimate,” says one retail manager in the video ad. “Then we bill them whatever we want.”
This new video pokes fun at the lack of price transparency in healthcare. The American Hospital Association took issue with the clip’s tone.
“People need price certainty,” PRA founder and Chairman Cynthia Fisher, MBA, told KFF Health News. “Estimates are a way of gaming the people who pay for healthcare.”
However, executives from the American Hospital Association (AHA) pushed back on the video ad and PRA’s claims about HPT compliance. AHA contends that hospitals were flagged as being noncompliant if they left spaces blank or used formulas, both of which are permitted under the current rules.
“Very few health services are so straightforward where you can expect no variation in the course of care, which could then result in a different cost than the original assessment,” AHA Group Vice President for public policy Molly Smith, MS, told KFF. “Organizations are doing the best they can to provide the closest estimate. If something changes in the course of your care, that estimate might adjust.”
As for the July PRA report, in a July 25 AHA press release, Smith stated, “Patient Rights Advocate has put out a report that blatantly misconstrues, ignores, and mischaracterizes hospitals’ compliance with federal price transparency regulations.”
CMS, she said, “has found that as of last year 70% of hospitals had complied with both federal requirements and over 80% had complied with at least one. Due to the ongoing efforts of the hospital field, these numbers are surely higher today. Third party analyses have agreed that hospitals have made tremendous progress.”
But then what is motivating the government’s new amendments to the price transparency rule? Regardless, clinical laboratories and pathology groups should continue to monitor progress of these new amendments to the federal hospital transparency rule.
But insurers are complying under the Transparency in Coverage regulations and that is where discrepancies in the disclosure of prices to the public have been found
Despite federal regulations requiring hospitals to publicly post their prices in advance of patient services, some large health systems still do not follow the law. That’s according to a new Transparency in Coverage Report from PatientRightsAdvocate.org (PRA), which found that some hospitals are “flouting” the federal Hospital Price Transparency Rule.
By cross-referencing price disclosures by hospitals and insurance companies, which are required to publish the amounts they pay for hospital services under federal Transparency in Coverage regulations, PRA, a 501(c)(3) nonprofit, nonpartisan organization, discovered the healthcare providers’ noncompliance with federal transparency regulation.
“Prices revealed in newly released health insurance company data files show some major American hospitals are omitting prices from their required price disclosures in violation of the federal hospital price transparency rule,” according to the PRA report.
Hospitals conceal their prices because they don’t want people to know how much rates for the same procedure vary,” Sally C. Pipes (above), President and CEO of Pacific Research Institute, wrote in the Washington Examiner. “A lack of price transparency benefits hospitals but not patients or payers. The federal government should not let providers get away with flouting the law,” she added. Clinical laboratories are also required under federal law to publish their prices. (Photo copyright: The Heartland Institute.)
“PatientRightsAdvocate.org discovered several instances in which prices were omitted from the hospital files but appeared in the insurance company files,” noted the PRA report. “These discrepancies indicate that some large hospitals are not posting their complete price lists as required by the hospital price transparency rule.”
The federal Centers for Medicare and Medicaid Services (CMS) says hospitals must post standard charges in a single machine-readable digital file, and display in a consumer-friendly way, “300 shoppable services with discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges.”
But according to the PRA report and news release, the study team discovered that this was not always the case. Below are examples from the report of some of the discrepancies between prices on a hospital’s website and what payers’ websites showed as prices involving those same hospitals:
PRA’s report casts light on inconsistencies between what insurers and providers share with the public on prices.
“Today’s report confirms that hospitals are hiding prices from patients and [this] calls into question their public assertions that individual prices don’t exist for many of the services they provide,” said PRA Founder and Chairman Cynthia Fisher in the news release.
“The data made possible by the [federal] Transparency in Coverage (TiC) rule reveals prices negotiated with insurers that hospitals did not disclose in the machine-readable files required by law. Our report is just the tip of the iceberg of what the staggering amount of data in TiC disclosures will reveal,” she added.
Ascension, HCA Note Compliance with CMS Rule
For its part, Ascension, in a statement to Healthcare Dive, confirmed it is complying with the CMS rule and offers consumers tools to estimate costs.
“We’re proud to be a leader in price transparency,” Ascension said.
HCA told Healthcare Dive it has “implemented federal transparency requirements in January 2021 and provides a patient payment estimator in addition to posting third-party contracted rates.”
Advice for Clinical Laboratories Sharing Test Prices
Hospitals flouting the federal transparency rule is not new. Dark Daily has covered other similar incidences.
Clinical laboratory leaders who oversee multiple labs in healthcare systems may benefit from advice about CMS rule compliance shared in HealthLeaders.
Post a separate file for each provider.
Be “cognizant” of different sets of standard charges for multiple hospitals under one license.
“Today’s healthcare consumer wants to know prices in advance of service. That’s because many have high deductible health insurance plans of, say, $5,000 for an individual or $10,000 for a family as the annual deductible,” said Robert Michel, Editor-in-Chief of Dark Daily and its sister publication The Dark Report.
Clinical laboratory tests may not be the most expensive healthcare service. But they are critical for high-quality hospital care and outcomes. Increasingly, patients want to know in advance how much they will cost. This is true of patients of all generations, from Baby Boomers to Generations X, Y, and Z.
