Publish prices or pay the penalty - that’s the message the Biden administration is sending to healthcare systems nationwide. Earlier this week, the Centers for Medicare and Medicaid Services fined two Atlanta-area hospitals $1.1 million dollars for failing to comply with price transparency laws (source), marking the first time a healthcare system has been fined for non-compliance. 

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Northside Hospital Atlanta must pay more than $883k and Northside Hospital Cherokee was fined over $214k for failing to post a machine-readable list of prices and a “consumer-friendly list of standard charges” on their websites (both are required under federal law passed January 1, 2021). 

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In an investigation by the Atlanta Journal-Constitution last year, Northside said a list of standard charges wouldn’t be useful to consumers because those prices lack context and can change depending on variables like insurance contract negotiations.

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We founded Serif Health to address that exact problem and mentality. Yes, procedure prices can and should vary based on underlying costs, complexity of cases and the negotiated insurance rate. Yes, exact diagnoses pre-visit are impossible. And yes, exact bill totals are hard to calculate due to the complexities of medical billing and coding multiple procedures in a visit. But hiding the charges, cash pay, and mean insurance reimbursement rates for all services under the guise of ‘lack of patient context’ is a smokescreen. Not publishing makes it impossible for consumers to benchmark a hospital’s affordability versus other hospitals, and makes it impossible for competitors to decide whether to enter the market. That smokescreen approach is the status quo in the healthcare industry, and it serves no one other than the non-compliant hospital system.

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We believe consumers should have access to upfront estimates for their cost of care, but patient-facing transparency alone doesn’t solve the problem of ballooning healthcare prices. Market competition will. We believe that by compiling and publishing relative reimbursement data across markets, other providers and facilities (like ASCs, outpatient imaging facilities, and speciality practices) can identify which hospital systems are getting substantially above-market reimbursements, enter that market, and make a compelling pitch to those payers to provide similar care. In Northside’s case, that’s an estimated 400,000 patients who could be served at a cost advantage. 

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Rational competition based on transparent pricing information should level the playing field for smaller providers and bring price disparity more in line across entire regions. 

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The $1.1 million CMS fine for the Northside hospital system should be a major wakeup call to hospital systems around the country who have delayed or ignored compliance. It’s also an incentive for all insurance plans to post their in-network negotiated rate files by July 1 to stay in compliance with the upcoming effective date for the Transparency in Compliance act. 

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If you operate an ASC, outpatient facility or practice, and are interested in reimbursements data for expansion planning or payer contracting proposals, get in touch!

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