Less Than One-third of Hospitals Provide Compliant Price Transparency Information for Total Joint Arthroplasty Procedures

Abstract

Background: The Centers for Medicare and Medicaid Services (CMS) recently implemented price transparency legislation. As total joint arthroplasty (TJA) procedures are widely used, expensive, and generally are predictable in terms of cost and expected outcomes, these procedures are a proxy for assessing how hospitals provide price transparency for their services as a whole. Furthermore, cost estimates for TJA procedures represent some of the most commonly sought-after price transparency information among the orthopaedic surgery patient population.

Questions/purposes: We asked: (1) Are hospitals compliant with federal rules mandating transparency in pricing for primary TJA? (2) Are hospitals providing these data in a user-friendly format? (3) Is there a difference in prices quoted based on Current Procedural Terminology (CPT) codes compared with Diagnosis Related Group (DRG) codes?

Methods: Our cross-sectional retrospective analysis used the CMS's Hospital Compare database. This database includes information for 5326 Medicare hospitals nationally. We excluded children's, psychiatric, Veterans Affairs, and active military base hospitals as well as hospitals performing fewer than 100 TJAs annually. A total of 1719 hospitals remained after this selection process. Random sampling stratified across practice setting, hospital size, TJA volume, type, ownership, and Census region was performed to identify 400 facilities for our final analysis. Included hospitals were located predominately in urban areas (79% [317 of 400]) and were mostly medium-sized facilities (43% [171 of 400]). Most hospitals were classified as acute care (98% [392 of 400]) versus critical access. Three reviewers thoroughly searched each hospital website for a machine-readable file providing the following five datapoints: gross charges, payer-specific negotiated charges, deidentified minimum negotiated charges, deidentified maximum negotiated charges, and discounted cash prices. Hospitals that provided all five datapoints through a machine-readable file were considered compliant. Additionally, we considered hospitals with any gross price information pseudocompliant. The consumer-friendliness of the website was assessed based on the following criteria: (1) languages other than English were offered, (2) it took less than 15 minutes to locate pricing information, (3) a phone number or email address was provided for questions, and (4) there was a description of procedure in common terms. Pricing information was recorded and compared for CPT codes 27447 and 27130 and DRG codes 469 and 470. Data were sourced from December 1 through 20, 2021, to assess compliance in the first year since the legislation was implemented.

Results: Only 32% (129 of 400) of the sampled hospital websites were compliant with all six requirements under the CMS rule for transparency in pricing. When segregating by individual procedures, 21% (84 of 400), 18% (72 of 400), 18% (71 of 400), and 19% (74 of 400) of hospitals provided CMS-compliant pricing information for CPT codes 27447 and 27130 and DRG codes 469 and 470, respectively. For each code, rates of pseudocompliance were 36% (143 of 400), 31% (125 of 400), 34% (135 of 400), and 50% (199 of 400) for the included codes, respectively. Most included hospitals provided at least some of their pricing data in a user-friendly format. Prices quoted using a DRG search were higher overall than prices quoted using a procedure-specific CPT code.

Conclusion: Although the CMS implemented a price transparency mandate at the beginning of 2021, our analysis demonstrated that most hospitals either do not provide TJA price estimates or are noncompliant when presenting related information. Specifically, approximately half of evaluated hospitals provided a gross charge for any TJA code, and less than one-third of these institutions were fully compliant with all CMS mandates for these procedures.

Clinical relevance: Given the potential influence compliance and price sharing may have on empowering patients' healthcare decisions and reducing healthcare expenditures, hospitals should use our analysis to identify where their compliance is lacking and to understand how to make their pricing information more readily available to their patients. In addition to ensuring that all six CMS mandates are met, this should include providing information in easy-to-understand formats and making related services identifiable across all levels of health literacy. Furthermore, we advocate for the use of CPT codes and layman terms when identifying provided services as well as a price estimator tool that allows for the download of a machine-readable file specific to the procedure of interest.

Fig. 1.

This STROBE flow chart shows the hospital selection process.

Fig. 2.

This chart shows the proportion of hospitals that were compliant with the CMS rule.

Fig. 3.

This box-and-whisker plot demonstrates extracted pricing information for CPT and DRG codes related to total joint arthroplasty.