CMS Holds Off on Hospital Price Transparency Noncompliance Penalties

CMS will hold off on hospital price transparency noncompliance penalties for the moment, a CMS spokesperson told Bloomberg Law. CMS proposed an increase in penalty amounts for noncompliant hospitals in the Medicare Outpatient Prospective Payment System (OPPS) proposed rule issued in July.

The news arrives just a few months after CMS began sending letters to noncompliant hospitals. CMS sent 165 warning letters as of mid-July, a CMS spokesperson told Bloomberg Law.

The warning letters state that hospitals have 90 days to address their noncompliance before additional actions will be taken. However, the agency has not yet issued any fines to hospitals.

"CMS intends to continue its monitoring and enforcement activities and will issue additional warning letters on a monthly basis going forward, as necessary," the CMS spokesperson stated.

Recent data from PatientRightsAdvocate.org revealed that 94 percent of hospitals were noncompliant with the price transparency rule over six months after its implementation. The price transparency rule requires hospitals to publish payer-specific negotiated rates and a user-friendly list of prices for shoppable medical services.

The calendar year 2022 OPPS rule suggested increasing the penalty amounts to a minimum of $300 per day for small hospitals with 30 beds or fewer, and $10 per bed per day for hospitals with more than 30 beds. 

“As President Biden made clear in his executive order promoting competition, a key to price fairness is price transparency,” Xavier Becerra, HHS secretary, said in a press release when the OPPS rule was released.

“No medical entity should be able to throttle competition at the expense of patients. I have fought anti-competitive practices before, and strongly believe health care must be in reach for everyone. With today’s proposed rule, we are simply showing hospitals through stiffer penalties: concealing the costs of services and procedures will not be tolerated by this Administration.”

Compliance with the rule has been an ongoing challenge for hospitals since it went into effect in January. Analysis from ADVI found inconsistent pricing information on the websites of the 20 largest hospitals in the US.

AHA and other industry groups have expressed concerns with the OPPS rule and its implications. AHA said that it was “deeply concerned about the proposed increase in penalties for non-compliance, particularly in light of substantial uncertainty in the interpretation of the rules,” in a press release.

CMS has not yet released an official statement about its decision to delay the penalties.