Abstract and Introduction
Introduction: In an attempt to improve price transparency, the Centers for Medicare & Medicaid Services (CMS) now requires hospitals to post clear, accessible pricing data for common procedures. We aimed to determine how many top orthopaedic hospitals are compliant with the new regulation and whether there was any correlation between hospital charges and outcomes after total hip arthroplasty (THA) and total knee arthroplasty (TKA).
Methods: The hospital websites of the top 101 orthopaedic hospitals per the US News & World Report 2020–2021 were explored to assess compliance with the price transparency requirement. We recorded the gross inpatient charge, cash price, payer-specific negotiated charge, and deidentified maximum and minimum payer rates for THA and TKA. Outcome metrics included hospital ranking and Medicare risk-adjusted arthroplasty readmission and complication rates.
Results: Although 94 hospitals (93%) posted some shoppable service information as required by CMS, only 21 hospitals (20%) were fully compliant. The mean inpatient charge for THA and TKA was $72,111 (range, $14,716 to $195,264), cash price was $39,027 (range, $2,920 to $110,858), and minimum and maximum payer rates were $16,140 and $57,949, respectively. Better hospital ranking was weakly correlated with higher charges (coefficient 0.223; P = 0.049). No correlation between charges and complications (P = 0.266) or readmissions (P = 0.735) was observed.
Conclusion: Few hospitals are fully compliant with the new CMS price transparency regulations. We found a wide range of hospital charges for THA and TKA without correlation with complications or readmissions. Although efforts by CMS to increase price transparency should be welcomed, increased costs should be justified by quality in the era of value-based care.
The cost of health care in the United States is higher than that of most developed countries around the world and continues to rise at an unsustainable rate.[1,2] In most cases, the patient is often unable to determine what they will be paying for each aspect of their health care until they receive their final bill. Without question, patients undergoing care for an acute condition would not have the time nor opportunity to determine the price of each intervention because of the urgency of the situation. However, there are many aspects of health care that are elective or semielective, wherein a patient has sufficient time to research and plan his or her own care before proceeding with a treatment procedure. This aspect of health care has been termed a "shoppable service." Among medical cases in the outpatient setting, 90% of the 300 highest spending categories were considered shoppable. Similarly, 73% of the 100 highest spending categories requiring inpatient care were considered shoppable. Notwithstanding, hospitals were historically not required to post charges for services, and thus, patients were generally not able to compare prices between different hospitals or providers.
In an attempt to decrease healthcare costs and to improve price transparency for patients, the Centers for Medicare & Medicaid Services (CMS) now requires all hospitals to post clear, accessible pricing data for common procedures starting January 2021.[4,5] This mandate requires most private health plans, including group and individual health insurance plans, to disclose pricing and cost-sharing information. The goal of this new requirement is to improve information asymmetry, giving patients the pricing information required to make more informed financial decisions for their care. Hospitals which are noncompliant with posting price transparency information will be asked to submit and carry through a corrective action plan. If they are unable to do so, they risk monetary penalties up to $300 per day and public display of noncompliance on a CMS website.
In a review of a large insured population who were offered a price estimator for advanced imaging, Desai et al found that only 1% of the patients used the available tool. However, those who used the price estimator tool paid an average of 14% lower for their imaging compared with those who did not. Because the emphasis on price transparency continues to grow, hospitals and providers are concurrently challenged to provide value-based care, which has been defined as "the patient outcomes achieved per dollar expended." To our knowledge, no studies have evaluated the relationship between CMS-mandated published charges and clinical outcomes, and thus, it remains uncertain whether these charge metrics are truly value-based. The purpose of this study was (1) to determine how many of the top-ranked US orthopaedic hospitals were compliant with the new CMS regulation and (2) to assess whether there was any correlation between hospital charges and outcomes after total hip arthroplasty (THA) and total knee arthroplasty (TKA).
J Am Acad Orthop Surg. 2022;30(8):e658-e663. © 2022 American Academy of Orthopaedic Surgeons