CMS Eyes Stricter Enforcement of Hospital Price Transparency Compliance

Hospital price transparency compliance is a top priority for CMS, which plans to take “aggressive additional steps” to identify hospitals lacking required pricing information on their websites.

Since Jan. 1, 2021, hospitals have had to make public their standard charges for items and services they provide. The standard charges include gross charges, discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges.

CMS requires the information to be made public both as a consumer-friendly display of at least 300 shoppable services and a comprehensive, machine-readable file.

Hospital price transparency lagged in the first year, CMS reports in a recent Health Affairs blog post. Less than a third (27 percent) of a randomly selected group of hospitals met consumer-friendly display criteria and posted a machine-readable file, the agency found.

Additionally, 66 percent of the 235 hospitals analyzed met consumer-friendly display criteria and 30 percent posted a machine-readable file that met the website assessment criteria.

Hospitals found to have price transparency requirement deficiencies were referred internally by CMS for a comprehensive compliance review, which includes direct hospital engagement and discourse around compliance.

That year, CMS also upped the penalty for noncompliance from a maximum of just over $100,000 annually per hospital to over $2 million annually per hospital. The federal agency also called on consumers to report hospitals that do not appear to comply with the price transparency requirements.

Hospital price transparency compliance increased significantly in 2022, the second year of the requirements. CMS reports that 70 percent of a larger sample of hospitals (600 acute care hospitals) met consumer-friendly display criteria and posted a machine-readable file.

That year, 82 percent of the hospitals also posted a consumer-friendly display that met the consumer-friendly display website assessment criteria and 82 percent posted a machine-readable file that met the website assessment criteria.

CMS conducted the second-year assessment of hospital price transparency to understand the impact of stronger enforcement actions on hospitals, officials said in the blog post. The federal agency issued nearly 500 warning letters in 2022 and more than 230 requests for corrective action plans. Two hospitals received penalties for noncompliance.

Moving forward, hospitals will face stricter enforcement efforts. CMS said in the blog post those efforts may include “expediting the timeframes by which it requires hospitals to come into full compliance upon submitting a corrective action plan.”

The agency also intends to more aggressively identify hospitals with deficiencies and “prioritize action against hospitals that have failed entirely to post files.”

CMS officials also stated that it is prioritizing standardized reporting of price transparency information, a common complaint with the requirements. Kaiser Family Foundation (KFF) recently reported that hospital price transparency information on hospital websites is messy and inconsistent primarily because of a lack of standardized reporting.

“The issues discussed above result primarily from the way the rule is crafted, particularly from the lack of specificity and uniformity about what should be included with each charge in their machine-readable files and how that information should be laid out,” KFF stated.

CMS said more standardization would help hospitals comply with the regulations, aid CMS enforcement, and better enable third parties to develop tools that make prices available to consumers.

The federal agency is also considering “mandating the centralization of information or being more prescriptive about the placement of the link on a hospital’s website” in future rulemaking.