CMS Posts Hospital Price Transparency Enforcement Updates
CMS released a fact sheet that outlines process updates they are making to increase compliance with the hospital price transparency requirements, which went into effect in January 2021 and enforced in July of 2022.
The hospital price transparency regulation was authorized by the Public Health Services Act, which allows patients to know the cost of a hospital item or service before receiving that item or service. The goal of this regulation is to encourage a more competitive market for medical coverage and treatment by making the healthcare prices visible before point of service. Each operating hospital in the U.S. is required to make its standard charges public, including:
- Gross charges (individual items and services typically found in hospital chargemasters);
- Discounted cash prices (items and services that are paid by cash or cash equivalent); and
- Negotiated charges between the hospital and third-party payers.
As stipulated in the regulation, hospitals are required to make their charges public by providing:
- A single comprehensive machine-readable file with all standard charges established by the hospital for all the items and services it provides; and
- A consumer-friendly display of standard charges for as many of the 70 CMS-specified shoppable services that are provided by the hospital, and as many additional hospital-selected shoppable services as is necessary for a combined total of at least 300 shoppable services. This requirement can be satisfied through the release of a shoppable services file or by offering a price estimator that generates a personalized out-of-pocket estimate that takes into account the individual’s insurance information.
To enforce compliance with this regulation, CMS audits a sample of hospitals in addition to investigating complaints submitted to CMS through automated means. As part of the enforcement process, CMS issues warning notices to a hospital with “egregious violations”, providing instructions to correct deficiencies within 90 days. If the hospital does not come into compliance after 90 days, CMS issues a corrective action plan (CAP) request with a 45-day deadline for hospital CAP submission, including a proposed completion date, for CMS approval. For a hospital that does not complete the steps to come into compliance, CMS issues a civil monetary penalty (CMP). As of April 2023, CMS has issued more than 730 warning notices, 269 requests for CAPs and CMPs on four hospitals, which are listed on the website.
CMS has recently updated the enforcement process with the following changes:
- Requiring CAP completion deadlines – requiring hospitals to be in full compliance with the hospital price transparency regulation within 90 days rather than allowing hospitals to propose a completion date.
- Imposing CMPs earlier and automatically – automatically imposing CMPs on hospitals that fail to submit a CAP rather than issuing CMPs after the warning notice 90-day deadline for compliance.
- Streamlining the compliance process – immediately requesting hospitals that have not made any attempt to meet reporting requirements to submit a CAP rather than issuing a warning notice first.
These changes will shorten the average time that hospitals must come into compliance with the hospital price transparency requirements after a deficiency is identified to no more than 180 days; or 90 days for cases with no warning notice. For additional information, see the Hospital Price Transparency website and Frequently Asked Questions.
