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| 1 minute read

What factors influence hospital compliance with the price transparency rules?

Beginning this year, Medicare rules (45 CFR §180.50) require hospitals to publicly list negotiated rates and cash prices for 300 shoppable services online in a consumer-friendly format and a machine-readable file. Hospitals must use a publicly available website for purposes of making public the standard charge information in a prominent manner and clearly identify the hospital location with which the standard charge information is associated.

Hospitals must ensure that the standard charge information is: easily accessible; without barriers; free of charge; available without requirements to log into a user account with a password; and without having to submit personal identifying information. 

In an interesting article published in Modern Healthcare, students and faculty within the Owen Graduate School of Management at Vanderbilt University conducted a survey to collect a sample of transparency data from hospitals throughout the United States. They concluded that compliance with the hospital price transparency rule is still quite variable, and offered six notable observations based on their findings to date:

1. Hospital competition is associated with more compliance.

2. Insurer competition is associated with less compliance.

3. Tax status and hospital size did not play a role in compliance.

4. Compliance was not associated with financial performance.

5. Existing state policy did not play a role in compliance.

6. Compliance ultimately appears to be a cultural decision.

The students and faculty reported that they could not attach primary factors to compliance or non-compliance with the price transparency rule, concluding that the rule did not appear to selectively disadvantage any particular set of hospitals. Compliance spanned a wide range of hospitals: from big to small, nonprofit to for-profit, and independent to corporate-owned, leaving them with the conclusion that price transparency compliance is a cultural decision on the part of each hospital

Given the variability in compliance, we wondered what factors were associated with the decision of hospitals to comply. We investigated 324 short-term acute care hospitals from 26 metropolitan statistical areas (MSAs), which were chosen based on differences in hospital and insurer market concentration.


health care & life sciences, hospitals, price transparency, medicare