Four Kansas hospitals fail to meet new federal standard for cost transparency

By: - August 26, 2021 1:27 pm

A consumer advocate’s report found four Kansas hospitals have failed to meet a new federal rule for fully disclosing the cost of services. Hospitals says the pandemic consumed resources before the rule went into effect. (Getty Images)

Four medical providers in Kansas have yet to fully disclose their costs for services, violating a federal order that went into effect this year, according to a new report from a national advocacy group.

Hundreds of hospitals across the United States have yet to comply with the rule, which requires online posting of costs for easy access. The Kansas locations are Shawnee Mission Medical Center, now known as AdventHealth; Saint Luke’s Hospital of Kansas City, which operates hospitals in both Kansas and Missouri; Stormont Vail Hospital in Topeka; and the University of Kansas Health System.

The rule, established by the Affordable Care Act, requires that hospitals disclose prices and negotiated rates with health insurers beginning in January of this year. A recent report studied whether providers were complying and found a majority of local hospitals are still missing information about standard charges in their files.

The report was conducted by the nonprofit Patients Rights Advocate. It took a look at the standard charges files of a random sample of 500 hospitals across the country. Of those hospitals, 471 of them were missing aspects of pricing information as of July. The Biden administration proposed raising the penalty against these hospitals to $2 million last month. Among those 471 hospitals were the four in Kansas.

Without full access to hospital cost information, Patients Rights Advocate founder Cynthia Fisher said, patients lose the ability to weigh options and run the risk of encountering unnecessary financial burdens. Fisher started the organization in hopes of preventing that.

The rule is intended to give patients the opportunity to shop for the health care experience they are looking for — especially with non-emergency care — and compare not only prices but quality metrics.

“They’re oftentimes blindsided by outrageous medical bills and expected to pay with a blank check,” Fisher said. “The only way we can lower the cost of health care is to put consumers in charge of their choices.”

Fisher said each of the four Kansas hospitals in the report posted some information, but all of them lacked details, such as negotiated rates or specific plan names. Since the release of this report, Fisher said, hospitals across the country have already followed up saying they plan to make changes and want to be observed again in coming months.

“It has moved the needle — let’s put it that way,” Fisher said. “Once you deploy the consumer to be empowered, it’s going to eliminate a lot of the errors and even fraud and overcharging that’s been conducted every day by patients being kept in the dark.”

Cindy Samuelson, senior vice president of the Kansas Hospital Association, said the organization began working with Kansas hospitals to educate them about compliance with the federal rule before it went into effect. Handling the COVID-19 pandemic has been a priority for Kansas hospitals, Samuelson said, and it took precedence over tasks such as updating price information.

“It was something everybody had to do an about-face and really focus on, to even be in the place that we are today,” Samuelson said. “We have staff that are burnt out, that are retiring early or leaving or are sick. We have worked to send letters and share testimonial stories about the challenges hospitals have had with price transparency to make sure that legislators and others that may not see this as a burden understand that it’s not because hospitals aren’t wanting to do what we think the intent was.”

Creating a machine-readable format for all pricing and a list of 300 shoppable services is a daunting task, even for big hospital systems that specifically have staff for such tasks, Samuelson said. But in Kansas, meeting this criteria with limited staff and allocating space for it in hospital budgets has been even more challenging.

“We have 82 critical access hospitals in our state, which means these are hospitals that are less than 25 beds and in many cases, a very small facility in rural parts of our state,” Samuelson said. “We as an association have been working really hard to help find other sources of support to help even our smallest hospitals be able to meet the rules.”

The specificity of health care can make it difficult to simplify pricing, Samuelson said. With differences in each procedure and the ways procedures are tailored for different patients, predicting a cost can sometimes be complicated. That’s why financial counseling at hospitals can be important, she said, and the personalized resources those offices provide aren’t necessarily part of a machine-readable list.

“Every patient is so unique,” Samuelson said. “Making sure that we are meaningful in regards to providing upfront pricing can be a challenge because it’s a big range with so many variables.”

These same hospitals will be evaluated again, alongside an additional 500 hospitals across the country, in a January 2022PRA report, one year after this rule went into effect.

A lot has changed since KHA members were introduced to this legislation in the fall of 2019, Samuelson said, and she anticipates that more of them will comply.

“Patient care is the priority,” Samuelson said. “But they have rules and regulations out there for a reason, and our members and hospitals want to do all we can to meet all those needs.”

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Lucie Krisman
Lucie Krisman

Lucie Krisman graduated from the William Allen White School of Journalism at the University of Kansas in the spring of 2021. She has reported on beats that include local government, business, and arts and culture. Before writing for the Pitch and the Lawrence Times, she previously worked as a City Hall reporter for the Eudora Times, an initiative out of the KU journalism school to provide community news to Eudora through student reporters. During the COVID-19 pandemic, she also remotely covered stories for the North Dakota Newspaper Association that were distributed to newspapers across the state. She has received awards from the Kansas Press Association for business, education and government reporting.

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