Hospitals will soon have less wiggle room if they do not comply price transparency requirements.
The Centers for Medicare and Medicaid Services (CMS) announced new enforcement moves that aim to increase compliance with its hospital price transparency rules, which obligate hospitals to post the list prices of their most common procedures. The new actions come as several studies have found very few hospitals are in compliance with the rule and actually have their prices available to the public, despite the rule being in effect for some time. In fact, one study last year found just 16% of hospitals were complying with the requirements, though a more recent study showed that figure improving over time.
The price transparency rule came from the Trump administration and was part of CMS’ goal to give the public more healthcare information, particularly around pricing, to make decisions about providers and procedures. The idea was that having the knowledge of price would give consumers more opportunity to shop around for the best care for certain procedures and also increase competition between hospitals and potentially bring down costs through this market strategy. However, with not all hospitals complying with the rule, it is unclear if the transparency rule is having any impact on decreasing healthcare costs. In addition, some studies have shown that Americans don’t really shop around for healthcare.
CMS has been monitoring hospitals’ compliance with the price transparency rule through public complaints, reviews and analysis of noncompliance and internal audits of hospitals’ websites. The current enforcement process starts with a warning notice to correct the deficiencies within 90 days, followed by a corrective action plan (CAP) if compliance is not met within those 90 days. CAPs have a 45-day deadline, during which hospitals are required to give CMS a completion date for the agency’s approval, typically between 30 and 90 days. After that, if hospitals are still not in compliance, CMS issues a civil monetary penalty (CMP). So far, CMS has said the average case time is 195 to 220 days.
According to CMS, it has “increased the number of comprehensive reviews conducted from 30-40 per month to over 200 comprehensive reviews per month,” thanks to the use of automation.
“As of April 2023, CMS has issued more than 730 warning notices and 269 requests for CAPs. CMS has imposed CMPs on four hospitals for noncompliance, which are posted and made publicly available on the CMS website,” the agency said. “Every other hospital that was reviewed through a comprehensive compliance review has corrected its deficiencies or is in the process of doing so, and CMS helps hospitals come into compliance by conducting extensive technical assistance with hospitals throughout the compliance process.”
While the enforcement process to date has had success moving more hospitals to comply with the rule, CMS has created new enforcement measures to move the needle even further. Instead of allowing hospitals to submit their own completion date of a CAP, CMS will now require full compliance of the rule within 90 days from when CMS issues the CAP request. This move will push hospitals to comply faster and standardize CAPs.
In addition, CMS will impose penalties sooner, automatically imposing a CMP on hospitals that fail to submit a CAP at the end of the 45-day CAP submission deadline. CMS will re-review the hospitals' files before imposing the automatic CMP. Lastly, CMS said it will streamline the compliance process by no longer issuing a warning notice to hospitals that have not made any attempt to comply with the rules and instead issue a demand for a CAP.
“These enforcement updates will shorten the average time by which 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, and will complement future efforts,” CMS said.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."