CMS to Audit Some Hospitals for Price Transparency Compliance

hospital price transparency rule

CMS is taking steps to ensure hospitals comply with a controversial price transparency rule taking effect on January 1, 2021.

On that date, every hospital in the country is expected to provide publicly accessible standard charge information about the items and services they render. That includes gross charges, discounted cash prices, de-identified minimum and maximum negotiated charges, and even payer-specific negotiated charges.

That information must also be machine-friendly and easily accessible to patients, according to the hospital price transparency rule.

The price transparency requirements have generated significant buzz from hospital groups, some of which continue to fight the rule in court. The groups argue that revealing the rates negotiated by providers and private payers could lead to higher prices for consumers and potentially more provider consolidation since the rates are typically regarded as trade secrets.

Hospitals have also complained that compliance with the rule would require significant resources, including a major data project to create a comprehensive list of all the items and services rendered by a hospital and all the pricing information attached to each service.

Some hospitals have even considered not complying with the rule come January 1, especially since the organizations are still funneling resources to fighting COVID-19 and other pandemic-related challenges.

But CMS wants hospitals to comply with the new price transparency rule, so in addition to investigating complaints submitted to them, the agency also plans to audit a sample of hospital websites for compliance starting in January.

The news coming from a Special Edition email to Medicare providers also says hospitals could face civil monetary penalties if they are found to be non-compliant.

CMS plans to audit hospital websites next year and if the agency finds the hospital to be non-compliant with one or more of the requirements in the price transparency rule, it will provide a written warning identifying the specific violation(s) and later request a corrective action plan if hospital non-compliance constitutes a “material violation” of one or more requirements.

A material violation includes failing to make public its standard charges or make standard charges public in the form and manner required by the overall price transparency rule, which includes presenting the information in a machine-friendly format on the hospital website.

Then, CMS said it will impose a civil monetary penalty of up to $300 per day. It will also publicize on a CMS website which hospitals have failed to respond to requests for compliance or that neglected to submit and/or execute a corrective action plan.

The agency notes that it will generally take action in that order – written warning, request for a corrective action plan, then penalty imposition – but it does not have to if it finds a hospital is not complying with the price transparency rule.

Hospitals that receive notice of a civil monetary penalty will need to pay CMS in full within 60 calendar days, according to federal regulation.

Hospitals will be able to appeal any civil monetary penalty imposed by CMS for noncompliance with the price transparency rule. The organizations must submit an appeal within 30 calendar days of the issuance of the notice of imposition of a civil monetary penalty.

AHA reiterated on its website that it is still in the middle of a court battle over the rule’s price transparency requirements and their effective date in the midst of the pandemic. The hospital group also urged President-elect Jon Biden to rescind the requirement that hospitals publicly disclose negotiated rates.

However, hospital price transparency has been a big win for the Trump administration, which has focused health policy efforts on getting providers to share more pricing information with patients. Price transparency in healthcare has also generally been a bipartisan policy goal.

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