CMS Is Getting More Serious About Penalizing Hospitals For Price Transparency Noncompliance

CMS Is Getting More Serious About Penalizing Hospitals For Price Transparency Noncompliance
CMS Is Getting More Serious About Penalizing Hospitals For Price Transparency Noncompliance

The Centers for Medicare & Medicaid Services (CMS) has fined two hospitals in September for alleged violations of its price transparency rule. This marks the third month in a row that the agency has issued fines against hospitals for price transparency noncompliance, following a yearslong period of light enforcement.

The two fines issued on September 5 were the thirteenth and fourteenth penalties CMS has imposed on hospitals for price transparency violations. Saint Elizabeths Hospital in Washington, D.C. was fined $677,440, and Holy Cross Hospital in Silver Spring, Maryland was fined $325,710.

CMS’ rule aims to make hospitals’ pricing data more accessible to patients so they can compare costs and make more informed decisions about the healthcare services they choose. The law requires all hospitals to post their gross charges, payer-specific negotiated charges, de-identified minimum negotiated charges, de-identified maximum negotiated charges and cash prices on their websites in a machine-readable file. It also mandates that hospitals must publish pricing for the 300 most commonly used services to their website in a consumer-friendly manner.

The rule went into effect on January 1, 2021. CMS didn’t start penalizing hospitals for their noncompliance with the rule until June 2022, when the agency fined two Georgia hospitals. The next fines didn’t come until April of this year. 

But enforcement of the rule seems to have picked up in recent months, as CMS issued three fines in July and five in August. 

CMS’ increasing enforcement of its price transparency rule could stem from the fact that hospitals are beginning to have an easier time complying with the rule — this was not always the case

In June of last year — a year and a half after CMS began enforcing the rule — a JAMA study revealed that fewer than 6% of hospitals were fully compliant. But a Turquoise Health report from this year showed that hospitals’ compliance rates are steadily increasing. In the first quarter of 2023, 84% of hospitals had posted some sort of pricing data online, according to the report. 

CMS updated its enforcement process for the rule in April. The agency requires hospitals deemed out of compliance with the rule to submit a corrective action plan within 45 days from when CMS issues its request for one — and hospitals are required to be in full compliance with the rule within 90 days from when the agency issued its corrective action plan request. CMS also automatically imposes civil monetary penalties on hospitals that fail to submit a corrective action plan within the 45-day time frame.

After CMS issues a noncompliance fine, the hospital has 30 days to appeal. Three of the 14 hospitals that have been fined for noncompliance have appealed their penalties, and CMS said these cases remain under review.

Photo: gustavofrazao, Getty Images

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