Hospitals Drag Their Feet in Posting Prices for Joint Replacements

LAS VEGAS — Only about one-third of hospitals had met the legal requirement to make price lists for at least one type of joint replacement procedure openly available as of December 2021, despite a federal mandate enacted 12 months earlier, a researcher reported here.

Among 400 hospitals selected randomly for investigation, just 32% “were compliant with all requirements under the Centers for Medicare & Medicaid Services (CMS) rule for transparency in pricing,” said medical student Robert Burkhart, BS, of the Cleveland Clinic in Ohio.

In fact, only half the hospitals provided prices for even a single diagnostic code as required under the rule, which went into effect in January 2021, Burkhart reported at the American Academy of Orthopaedic Surgeons annual meeting.

But it wasn’t all bad news. Among the hospitals that did comply with the regulation, a large majority went above and beyond the bare minimum requirements. It took Burkhart’s team less than 15 minutes to locate the price sheets on 84% of those hospitals’ websites, for example.

And most of the hospitals analyzed, including those out of strict compliance, had made some effort to increase transparency. More than 80% offered pricing tools on their sites, and many listed phone numbers for prospective patients to call for information.

On the negative side, about two dozen hospitals put their price sheets into massive documents (greater than 3 gigabytes) that few patients could easily digest. And nearly all the compliant hospitals posted their information exclusively in English.

Hospitals had fought the requirement bitterly, but the Trump administration was insistent, having long maintained that market-based competition was the best way to hold down soaring healthcare costs. Officials argued that if patients could compare prices, they would choose cheaper options and that would drive prices down all around.

It’s too soon to tell if that will happen, not least because hospitals have been slow to comply, and technical compliance may not equate to genuine transparency. Compliance might be picking up, though, if only because CMS started issuing fines last summer for violations.

Another study presented alongside Burkhart’s also examined price transparency for hip and knee replacement procedures, in the context of inter-hospital competition. Medical student Gloria Zhang, BS, of Duke University Medical Center in Durham, North Carolina, and colleagues looked at price postings (or lack thereof) by 1,366 U.S. hospitals, and found that about half had posted at least some information about costs for such procedures.

The Duke group also discovered that the variation was tied to physician and hospital business factors. Disclosure was significantly less likely in areas with high availability of orthopedic surgeons and hospitals — that is, where provider competition would presumably be most fierce. Hospitals with high quality ratings also tended to be those with the least disclosure, Zhang reported.

For the Cleveland Clinic analysis, Burkhart and colleagues first tallied up all the 5,000-plus hospitals that accept Medicare and hence are tracked by CMS. These were then winnowed down to 1,719 with adequate data on their characteristics and that were performing at least 100 total knee and hip replacements annually. The final 400 were selected to be nationally representative for geography, size, procedure volume, and ownership status.

Not all of the 32% rated as compliant had posted prices for each of the CPT and diagnosis-related group (DRG) codes for joint replacement (CPT 27447 and 27130; DRG 469 and 470). Compliance rates ranged from 18% to 21%. Only 8% of hospitals listed prices for all four codes.

Though not central to the study’s main aim, Burkhart and colleagues also examined the price information they located. They found astounding variation in the quoted figures. Means for the two CPT codes (27447 and 27130) were roughly $20,000-$30,000; costs for the corresponding DRG codes were somewhat higher. But the group also identified a few institutions listing costs in excess of $250,000. One unnamed hospital posted a price of $400,000 for DRG 469.

“Our findings emphasize the need for all [of the federal] mandates to be addressed during internal audits of compliance,” Burkhart concluded.