30. Evaluation of hospital compliance with federal price transparency regulations and variability of negotiated rates for spinal fusion

BACKGROUND CONTEXT To improve price transparency, Centers for Medicaid & Medicare Services (CMS) enacted the Hospital Price Transparency Final Rule in January 2021 requiring hospitals to post accessible pricing for common elective procedures to empower health care consumers. No studies have evaluated compliance of variability in negotiated rates for spine fusion. PURPOSE To evaluate hospital compliance to CMS regulations for both price estimators and machine-readable files for mandated procedures. Our secondary objective was to report the variation in negotiated rates for spinal fusion procedures and evaluate associations of these rates to hospital and geographic factors STUDY DESIGN/SETTING Cross-sectional analysis PATIENT SAMPLE Top 100 orthopedic hospitals ranked by US News & World Report. OUTCOME MEASURES Compliance was assessed by presence of mandated prices and consumer-shoppable services. Gross inpatient charge, cash price, and deidentified maximum and minimum rates for all 11 spine diagnosis related groups (DRGs) were collected. METHODS We searched all Google and all hospital websites for the presence of machine-readable files and consumer-friendly price transparency tool. We categorized file compliance as publication of all required charges for at least one DRG and price estimator compliance as publication of cash price for a noncervical and cervical fusion. The variability in spine fusion pricing between hospitals was evaluated utilizing hospital ranking and presence in a top 20 metropolitan statistical area (MSA). Spearman's correlations were conducted to assess correlation of DRGs without complications to expected Medicare reimbursements, poverty rate, and median income ratio. RESULTS Only 72 hospitals were fully compliant with CMS price estimator regulations for cervical and noncervical spine fusions, and only 39 were fully compliant with publication of all required rates for at least one spine DRG via machine readable file. Discounted cash prices were higher for both noncervical ($110,115 vs $84,876, p=0.0461) and cervical ($72,218 vs $53,695, p=0.0341) fusions at top 50 hospitals than those ranked 51-100. Hospitals located in a top 20 MSA had higher discounted cash prices ($150,394 vs $82,321, p=0.0407) for noncervical fusions but not cervical fusions. Average minimum negotiated rates ranged from 0.88-1.15 times the Medicare reimbursement across DRG, while negotiated maximum rates and cash prices were 3.41-3.90 and 2.53-4.08 times Medicare reimbursement, respectively. Minimum negotiated rates and cash rates for all DRGs demonstrated weak positive relationships with the median income ratio and weak negative correlations with poverty rate, while maximum rates were not correlated to socioeconomic parameters. Maximum negotiated rates for DRG 455, 460, and 473 all demonstrated weak correlations with Medicare reimbursement rate (r=0.3339, r=0.3701, and r=0.3854, respectively), while the maximum rate for DRG 458 and no minimum negotiated rates or cash prices demonstrated any relationship with Medicare reimbursement. CONCLUSIONS Most US hospitals are not fully compliant with CMS price transparency regulations for spinal fusions despite increased overall utilization of price estimators and machine-readable files. While higher ranked hospitals charged more for spinal fusions, DRG prices remain widely variable with little to no correlation with practice cost or socioeconomic parameters. FDA Device/Drug Status This abstract does not discuss or include any applicable devices or drugs. To improve price transparency, Centers for Medicaid & Medicare Services (CMS) enacted the Hospital Price Transparency Final Rule in January 2021 requiring hospitals to post accessible pricing for common elective procedures to empower health care consumers. No studies have evaluated compliance of variability in negotiated rates for spine fusion. To evaluate hospital compliance to CMS regulations for both price estimators and machine-readable files for mandated procedures. Our secondary objective was to report the variation in negotiated rates for spinal fusion procedures and evaluate associations of these rates to hospital and geographic factors Cross-sectional analysis Top 100 orthopedic hospitals ranked by US News & World Report. Compliance was assessed by presence of mandated prices and consumer-shoppable services. Gross inpatient charge, cash price, and deidentified maximum and minimum rates for all 11 spine diagnosis related groups (DRGs) were collected. We searched all Google and all hospital websites for the presence of machine-readable files and consumer-friendly price transparency tool. We categorized file compliance as publication of all required charges for at least one DRG and price estimator compliance as publication of cash price for a noncervical and cervical fusion. The variability in spine fusion pricing between hospitals was evaluated utilizing hospital ranking and presence in a top 20 metropolitan statistical area (MSA). Spearman's correlations were conducted to assess correlation of DRGs without complications to expected Medicare reimbursements, poverty rate, and median income ratio. Only 72 hospitals were fully compliant with CMS price estimator regulations for cervical and noncervical spine fusions, and only 39 were fully compliant with publication of all required rates for at least one spine DRG via machine readable file. Discounted cash prices were higher for both noncervical ($110,115 vs $84,876, p=0.0461) and cervical ($72,218 vs $53,695, p=0.0341) fusions at top 50 hospitals than those ranked 51-100. Hospitals located in a top 20 MSA had higher discounted cash prices ($150,394 vs $82,321, p=0.0407) for noncervical fusions but not cervical fusions. Average minimum negotiated rates ranged from 0.88-1.15 times the Medicare reimbursement across DRG, while negotiated maximum rates and cash prices were 3.41-3.90 and 2.53-4.08 times Medicare reimbursement, respectively. Minimum negotiated rates and cash rates for all DRGs demonstrated weak positive relationships with the median income ratio and weak negative correlations with poverty rate, while maximum rates were not correlated to socioeconomic parameters. Maximum negotiated rates for DRG 455, 460, and 473 all demonstrated weak correlations with Medicare reimbursement rate (r=0.3339, r=0.3701, and r=0.3854, respectively), while the maximum rate for DRG 458 and no minimum negotiated rates or cash prices demonstrated any relationship with Medicare reimbursement. Most US hospitals are not fully compliant with CMS price transparency regulations for spinal fusions despite increased overall utilization of price estimators and machine-readable files. While higher ranked hospitals charged more for spinal fusions, DRG prices remain widely variable with little to no correlation with practice cost or socioeconomic parameters.