Hospitals Warned to Avoid Deceptive Pricing or Wind Up in Federal Court

Hospitals must provide complete and accurate price information to patients before they agree to an elective procedure, or they may find themselves in federal court, Andrew Ferguson, director of the Federal Trade Commission (FTC), said at a healthcare transparency forum on Oct. 5.

Ferguson said he’d written to the CEOs of 24 of the nation’s largest healthcare companies, reminding them that the FTC has the power to enforce federal laws on unfair and deceptive pricing.

“Let me be clear: these letters are a warning. Healthcare providers must disclose their prices to consumers and must do so starting today,” Ferguson told forum attendees.

Hospitals have been required to publicly post price information since 2020, although only about half fully comply with that regulation, according to a recent report.

Even when posted, however, many of the online files are extremely large and may be difficult for consumers to navigate.

Lack of clarity will no longer be tolerated, Ferguson said.

“Hospitals cannot conceal the true cost of a procedure to prevent patients from shopping for better deals at competing facilities, and hospital price disclosures must be complete, accurate, and offered in advance of scheduled services,” he said.

A price can be deceptive if it either discloses or conceals information that might reasonably mislead a consumer, according to the FTC. That means prices must be clear and easily found by the shopper.

A price can also be deceptive when it omits critical information, like physician or facility fees, or it covers only part of the expense for services that would be provided for the patient’s care.

Inaccurate prices are deceptive, according to the FTC. When a reasonable person would conclude they’ve been told the entire cost of the service but they have not, the price is misleading.

Just 18 percent of hospitals that post their fees online list dollars-and-cents prices for at least half of their services, according to a September report from the group Patient Rights Advocate.

“Too many patients are still being denied the real, upfront prices they need to shop for affordable care and protect themselves from overcharges,” Cynthia Fisher, the group’s founder and chair, said in a statement.

Trent England, executive director of the conservative policy research group Save Our States, hailed the Oct. 5 announcement.

“Healthcare price transparency is one of the most obvious policies in American politics. That it has taken this long to guarantee patients and employers actual prices is absurd,” England said in a statement.

The warning letters were not based on a specific assessment of each of the 24 healthcare company’s practices, Ferguson said, but aimed to encourage the businesses to conduct an internal review to be sure they are not violating federal law.

Enforcement investigations into some hospitals are already underway though, Ferguson said, and the FTC is especially focused on what it deems vulnerable populations, which include rural Americans, seniors, and veterans.

“We will not rest until pricing transparency in healthcare is the universal norm,” Ferguson said.