More than half of Colorado hospitals have posted all consumer price information required by the federal government, but others still have more work to do toward full transparency, according to a new state report.
The Department of Health Care Policy and Financing’s report, released Tuesday, assessed whether hospitals posted a file in a format that a computer can read and search, and if they have a list or an estimator tool to look up prices for “shoppable” services. Both are required under federal rules.
Colorado law allows patients to sue if a hospital that isn’t complying with federal price transparency requirements takes certain actions against them, such as sending them to collections. The report doesn’t label hospitals as noncompliant, though, leaving that determination up to the Centers for Medicare and Medicaid Services.
The federal agency only has punished four hospitals nationwide for failing to comply with price transparency requirements since 2021. Each of those hospitals received a six-figure fine after allegedly ignoring demands that it post complete information.
The Colorado report rated 59% of 101 reviewed hospitals as good on price transparency, 10% as fair (meaning they posted information in the most important categories) and 31% as poor.
The department is reaching out to hospitals flagged as having poor performance to help them improve, said Nancy Dolson, special financing division director.
“We are really looking to help them be compliant,” she said.
The criteria the department uses lines up with the federal requirements, but rating hospitals as good, fair or poor doesn’t capture all the work they’ve done on transparency, said Tom Rennell, senior vice president for financial policy and data analytics at the Colorado Hospital Association.
A different rating system, by the consulting group Turquoise Health, didn’t penalize hospitals when small amounts of information were missing and determined that 80% in Colorado deserved five stars, its highest rating, he said.
“If you miss one of these measures, you immediately drop from good to fair” under the state’s methodology, he said.
The results from the state report, which used data from September, showed more hospitals were performing well than in November 2022. The percent performing poorly barely budged, though, when comparing the same group of 83 facilities. The more recent report included psychiatric hospitals and others that the state didn’t previously examine.
In the original group, 35 hospitals improved their ratings, 38 stayed the same and 10 dropped in the rankings. The federal guidelines changed during that time, so some postings that looked acceptable in 2022 weren’t in 2023, Dolson said. Some hospitals already have made corrections, she said.
“I think it is great for folks to see the improvement that hospitals have made,” she said.
As federal rules change, hospitals are having to adjust and update their postings, Rennell said.
“I think it highlights the challenge of trying to evaluate this,” he said. “Hospitals are definitely committed to providing price transparency.”
Small, rural hospitals were less likely than other general hospitals to be rated as “good,” though a larger percentage were based on the September data than in 2022. Interestingly, they were also less likely to be rated as “poor,” with more falling in the middle.
The report rated five out of eight hospital systems as good, finding they’d provided all required information. The exceptions were Banner Health, which was missing three out of 12 data types; HealthOne, also missing three; and San Luis Valley Health, the smallest of the systems with only two hospitals, which was missing one data type.
Complete data doesn’t automatically mean easy-to-use data, though. KFF, formerly known as the Kaiser Family Foundation, found that hospitals that complied with the federal rules still didn’t necessarily present their data in the same way, meaning potential patients couldn’t easily tell if one hospital truly offered a lower price for their knee replacement, or if it just didn’t include as many parts of the procedure under the same price heading.
The Centers for Medicare and Medicaid Services are setting new requirements for the machine-readable files to make them easier to use starting this summer, but the sheer size of the files discourages many people who aren’t working in the health field from using them. Neither the Colorado Department of Health Care Policy and Financing nor the Colorado Hospital Association had any data assessing how often people use the transparency postings, or how helpful they found them.
The idea behind requiring price transparency is that people (or their insurers) will move toward lower-priced alternatives, saving themselves and the system money. The Department of Health Care Policy and Financing also recently unveiled a tool aimed at employers and health insurance companies looking to compare hospital prices for specific types of care. It uses information from the state’s All-Payer Claims Database about what health plans actually paid, which may be different from the listed price, Dolson said.
“At the end of the day, it is often the (employer) purchasers and (insurance) carriers that drive down health care prices,” she said.
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