Are We Keeping It Real? Virginia Hospital Compliance with Price Transparency Laws
Written by Mary Kate Hogan
Edited by Eryn Rhodes and Lauren Watts
Despite wider access to private medical insurance in the United States, high medical debt remains a persistent problem. About one in 10 Americans owe significant healthcare bills, with serious injuries or chronic illnesses being major culprits of higher debt incurrences. Patients are often blindsided by the intransparent costs of their treatments and services, facing billing uncertainties after having already received care. As of 2021, over $140 billion in unpaid medical bills burdened United States’ citizens. Consequently, patients have increasingly supported the emergent healthcare consumerism industry, which grants them autonomy over the payment and management of their medical care plans. Consumers capitalize upon new technological advancements, such as comprehensive websites and large-scale databases, which provide more accessible resources and greater financial awareness for understanding and comparing healthcare prices. The practice of price transparency thus allows patients to make more informed medical decisions and promotes higher quality care at lower costs by fostering market competition within the healthcare industry.
In 2021, Congress passed a bill requiring all hospitals to make standard charges accessible to the public, as stated in H.R.3029 - Health Care PRICE Transparency Act. The bill states that hospitals should present such prices “in plain language without subscription and free of charge, in a consumer-friendly, machine-readable format.” Congress intended this comprehensive display to provide an easy and understandable layout of all service prices, removing the barriers which previously hid such knowledge from the general public. There has been a striking lag in hospital compliance with this bill across the nation, largely due to pushback and distaste from healthcare providers themselves, potentially due to fears of reduced profits and increased competition. Comparing prices across providers in advance is a key component to improving the overall patient experience and preventing unexpectedly high medical bills. Although the treatments for medical emergencies cannot be readily planned or chosen in advance, the services and transactions for routine and elective care can. The ability for healthcare consumers to select optimal costs is a gamechanger in lowering unforeseen debt and improving patient outcomes, yet hospitals—including in Virginia—are still not meeting these federal standards.
As of an August 2022 statewide survey, only 20% of Virginia hospitals were in compliance . Although hospitals face high fines for noncompliance, these consequential penalties have not deterred hospitals from obscuring health care costs. Consequently, a House subcommittee has proposed a new state bill which may materially threaten hospital finances if such standards are not met. Various other states, seeking to better regulate their hospital systems, have enacted bills which reach beyond the ordinary civil monetary penalties owed for such violations. According to the Centers for Medicare and Medicaid Services (C.M.S.), the Hospital Price Transparency Final Rule contains no exemption provisions or hardship waivers, meaning that every hospital in the United States, without exception, must publicly disclose their standard prices of services. In an effort to ensure that all citizens of the Commonwealth are aware of health costs prior to receiving care, the Virginia General Assembly has proposed House Bill 2427, which allows patients to sue Virginia hospitals for up to three times the cost of their medical bills if in violation of the federal transparency law.
The other vital aspect of the new bill would bar hospitals which are noncompliant with transparency regulations from pursuing legal actions against patients. This saves patients the struggle of being sued while already facing higher than expected charges (should cost knowledge not be accessible to them in advance). The strategy of creating more expansive state-level legislation to enforce the flouted federal law has worked in ensuring price transparency requirements are met in other states, including the exemplary successful model of Colorado. Their Prohibit Collection Hospital Not Disclosing Prices bill prevents hospitals from initiating or pursuing debt collection from patients if their website does not comply with the C.M.S.’ price transparency rules. With higher stakes from state regulatory action, compliance rates are more likely to increase, providing patients with the security and clarity needed to ensure that personal medical decisions are financially feasible.
Although Virginia hospitals are concerned about the detrimental effects these potential lawsuits may have on their finances, stronger consequential repercussions for violating the federal law will implement much higher hospital accountability through the addition of specific state bills. For the sake of patients, who deserve access to cost information, hospitals will be obliged to use more accessible methods for displaying the service prices on websites, as reports have previously shown them to be challenging to navigate. Essentially, hospitals would avoid concern regarding the threat of lawsuits if they are already complying with price transparency regulations. Passing this Virginia bill will simply ensure that existing law is being followed, an outcome now due for over two years. This new bill would hopefully incentivize hospitals across the state to finally post prices out of consideration for Virginia residents and to respect the federal law.
