Price Transparency and Compliance With Federal Regulation for Pediatric Tonsillectomy

To improve hospital price transparency, the Centers for Medicare & Medicaid Services (CMS) requires, as of January 2021, that all hospitals reveal charges for specific items and services. This analysis investigates whether otolaryngology residency-affiliated hospitals have complied with this new regulation, and it evaluates the variability in hospital-reported charges for pediatric tonsillectomy.

Cross-sectional analysis.

Subset of hospitals affiliated with otolaryngology residency programs.

Hospital websites were searched to determine compliance rates with CMS guidelines by posting a price transparency tool and specific charges for Current Procedural Terminology code 42820 (tonsillectomy and adenoidectomy, <12 years old). Various charges were collected: gross charge, discounted cash price, deidentified minimum and maximum negotiated charges, hospital fees, and physician fees.

Overall 104 unique hospitals were analyzed: 81 (78%) provided pricing data, but only 28 (27%) complied with CMS guidelines. The median reported total gross charge was $13,239 (range, $600-$41,957); deidentified minimum negotiated charge, $9222 (range, $337-$25,164); and deidentified maximum negotiated charge, $17,355 (range, $1002-$54,987). Hospital fees (median, $11,900; range, $2304-$38,831) were consistently higher than physician fees (median, $1827; range, $420-$5063). All estimates included a disclaimer stating that values likely underrepresent true prices.

Hospital compliance with the new regulation remains low, which limits efforts toward improved price transparency. There is wide variability in reported charges for pediatric tonsillectomy and adenoidectomy.