CMS Cracks Down on Hospital Price Transparency Compliance

CMS is cracking down on hospital price transparency compliance — or lack thereof.

The federal agency announced yesterday updated enforcement procedures, including earlier and automatic civil monetary penalties, or CMPs.

Only four hospitals have received CMPs for noncompliance with the hospital price transparency rule, which requires hospitals to publish standard charges on their websites in a single, machine-readable file. Standard charges include gross chargers, discounted cash prices, and charges negotiated between hospitals and third-party payers.

Many more hospitals have received warning notices and requests for corrective action plans (CAPs), as of April 2023 — more than 730 warning notices and 269 requests for CAPs.

However, more hospitals could face CAPs and CMPs under the updated process, which imposes deadlines on hospitals to complete corrective actions or face automatic penalties.

CMS stated that it will also require hospitals to fully comply with the hospital price transparency rule within 90 days of a CAP request. Hospitals already have to submit a CAP following CMS’ request within 45 days.

The federal agency said the new deadline for CAP completion will “standardize and streamline the timeframe and promote compliance at earlier dates.” Currently, hospitals can propose a completion date for CMS approval, which can vary.

Under the updated enforcemet process, CMS will also automatically impose a CMP on hospitals if it fails to submit a CAP at the end of the 45-day CAP submission deadline. Although CMS will re-review the hospital’s files to verify rule violations are still present.

Hospitals that submit a CAP by the deadline but fail to comply with the plan within 90 days will also receive an automatic CMP after CMS reassesses the hospital’s compliance.

Finally, CMS announced that it plans to streamline the compliance process by eliminating warning letters for hospitals that have not complied with the rule at all (i.e., the hospital has not posted any machine-readable file or a shoppable services list/price estimator tool). Instead, hospitals will immediately receive a CAP request.

The actions will bring hospitals into compliance sooner, according to CMS. Hospitals will have to correct deficiencies after no more than 180 days, or 90 days for cases with no warning letters.

Over 84 percent of hospitals are complying with the hospital price transparency rule, compared to 65 percent at the end of 2022, according to an analysis released earlier this month by Turquoise Health. Yet, compliance remains spotty, with 73.6 percent having negotiated rates posted and 70.6 percent having cash rates.

In light of compliance numbers, consumer health advocate Families USA recently called on the federal government to improve hospital compliance with the rule, including increased oversight to identify noncompliance.