Northside Hospital fined over $1M for failure to share medical prices

Intended to help consumers budget for health care, transparent hospital pricing information is required, but compliance varies among providers
Photo courtesy of Northside Hospital

Photo courtesy of Northside Hospital

The federal government has fined Northside Hospital for violating patients’ rights to transparent health care price information, in what the U.S. Centers for Medicare and Medicaid Services said was the first such fine nationwide.

Starting last year, hospitals across the country were required by the CMS to post the prices of certain services on their websites. The effort was intended as a tool to help patients shop and plan for the cost of medical care. The lists are required to be posted in specific formats, including a consumer-friendly searchable list of 300 medical services.

In issuing the penalties Tuesday, the CMS echoed some findings of an examination by The Atlanta Journal-Constitution last year that found some of Northside’s health care price lists were not posted as required or could not be searched online.

A spokeswoman for Northside, Katherine Watson, said it had no comment on the fine.

The fines for Northside Hospital Atlanta and Northside Hospital Cherokee total $1.1 million. According to the firm Cost Report Data Resources, Northside Hospital Atlanta last year posted total patient revenues of $9.5 billion.

Since the federal rule took effect Jan. 1, 2021, CMS has contacted hospitals across the country that didn’t adequately comply, notifying them of violations and allowing them time to make corrections before facing fines.

Only Northside has been fined so far, according to a CMS spokeswoman. CMS would not comment on whether more hospitals might be fined for violating the price transparency rule. CMS can fine a large hospital up to $2 million each year.

Northside Hospital’s flagship facility in Sandy Springs, Northside Hospital Atlanta, was fined $883,180. Northside Hospital Cherokee was fined $214,320.

This is the score the AJC gave Northside Hospital in 2021 in a review of compliance with a then-new federal Hospital Price Transparency Rule.  Federal investigators who issued a fine this year focused on the same problem areas found by the AJC.

icon to expand image

In citing Northside this week, CMS pointed to responses from the Northside Hospital system that seemed openly defiant of the rule. CMS said it had asked Northside Hospital Atlanta at least twice for a corrective action plan on how it was going to comply, but Northside had instead told CMS that patients should call or email the hospital for a personalized estimate.

James Gelfand is senior vice president of health policy for the ERISA (Employee Retirement Income Security Act) Industry Committee, a Washington-D.C.-based nonprofit that represents some of the largest U.S. employers.

“I mean, there’s no shortage of hospitals they could choose to go after,” Gelfand said. “It sounds like (Northside’s) behavior was beyond just failing to comply. It was contemptuous, right? One of (the two Northside hospitals) straight up said, ‘Oh, you want prices? You have to call.’”

The medical journal JAMA this week published a review of hospital compliance with the rule, measured within the first 6 to 9 months after it took effect. It found that hospitals less likely to comply with the rule were those in more concentrated markets, with fewer independent hospitals and less competition. Metro Atlanta’s market is becoming increasingly concentrated, with five hospital systems owning all the area’s hospitals.

The JAMA review also found that the hospitals less likely to comply were hospitals that made more money per patient.

JAMA authors found that nine months after the rule took effect, just over half of the hospitals it looked at, more than 2,000, still had not posted either a “machine-readable” price list — meaning the data can be read by a computer — or a searchable list for consumers, both required under the rule.

Indeed, Georgia’s renowned academic hospital system, Emory Healthcare, had some price postings Thursday that led patients to a page empty except for one sentence: “You are not authorized to view this page.”

The Atlanta Journal-Constitution last year examined Georgia hospitals’ compliance with the new federal rules, and gave each of the hospitals in the analysis a report card. Among all hospitals the AJC analyzed, Northside scored the lowest.

The federal citation and fines for Northside focused on the two areas of violation that the AJC reported on last year. The AJC found that Northside had not posted a machine-readable list of prices as required. And the required consumer-friendly searchable list of certain services and their prices did not function when tested by AJC reporters.

Northside responded then that the information required by the federal government would not actually be useful to consumers because it lacked context. Prices paid by patients can change depending on variables like insurance contract negotiations.

The recent fine citation says Northside Hospital Atlanta didn’t have the searchable list for consumers posted in a prominent manner that clearly identified the location of the hospital concerned. For Northside Hospital Cherokee, CMS said, “Specifically, no consumer-friendly list of standard charges was found.”

As to the machine-readable file, CMS said this week that Northside’s didn’t include all required services, and the services weren’t included in one single file.

Gelfand, of the employers’ organization, said some hospitals probably just don’t want to comply.

“I mean, for many years, the hospitals have benefited from a lack of understanding from patients about where the cheapest offerings were,” Gelfand said. “If you are a hospital that is not competitive on price or quality, the best thing for you is for the patients not to know anything.”

Our reporting on hospital prices

After the federal government’s Hospital Price Transparency Rule had been in effect a few months, the AJC last year examined 14 Georgia hospitals’ compliance with the rule. The AJC examined the public price lists posted, and looked at 10 factors determining whether they were as accessible and “shoppable” for consumers as the rule required. The AJC found that none of the hospitals reviewed was yet perfectly in compliance.

This week’s federal review of hospitals’ compliance with the rule echoed many of the findings made in the AJC’s review. The newspaper created a two-part grading system for data transparency and data completeness, and Northside scored lowest among the 14.

Emory Hospital Midtown scored the highest, with 100 points out of 100 for data completeness, and 93 points out of 100 for data accessibility. Northside Hospital scored the lowest, with 25 points out of 100 for data completeness and 2 points out of 100 for data accessibility.