A majority of hospitals are now complying with price transparency laws, publishing the list prices of common procedures, but some lawmakers want to increase penalties on those not in compliance.
The price transparency laws were introduced during the Trump administration and required hospitals to post the list prices of 300 common procedures so patients had the ability to shop around for their care and know their responsibility. The rule incited controversy since its proposal, with hospitals and health systems fighting the requirement and claiming the requirements were too challenging.
Last year, one survey found only 16% of hospitals were complying with the rules. However, compliance has seemingly increased significantly. A more recent finding revealed compliance jumped to 70% in 2022, according to an article published in Health Affairs.
While more hospitals are meeting the requirements, all hospitals are supposed to comply with the rules, which went into effect Jan. 1, 2021. Without all hospitals complying, the goals of the price transparency laws can’t come into fruition and allow patients to truly understand what they will have to pay for their care and what hospitals are charging. Price transparency has been a long-term goals of the Centers for Medicare and Medicaid Services (CMS), with the aim that by making healthcare prices less opaque, they will start to come down.
CMS has implemented several actions to boost compliance among hospitals for price transparency, including webinars, listening sessions, and online implementation aids, including frequently asked questions and checklists designed to summarize the requirements since before they were implemented. With low compliance, CMS increased penalties against hospitals that failed to follow the new requirements in 2021, with the maximum potential penalty increasing from more than $100,000 annually to $2 million annually per hospital in 2022, wrote Meena Seshamani, MD, PhD, deputy administrator and director of CMS, and Douglas Jacobs, MD, chief transformation officer at CMS, in Health Affairs.
“As of January 2023, CMS had issued nearly 500 warning notices and over 230 requests for corrective action plans since the initial implementing regulation went into effect in 2021,” they wrote. “Nearly 300 hospitals have addressed problems and have become compliant with the regulations, leading to closure of their cases. While it was necessary to issue penalties to two hospitals in 2022 for noncompliance (posted on the CMS website), every other hospital that was reviewed has corrected its deficiencies.”
Still, even with higher compliance, as much as 30% of hospitals are not following the requirements, according to CMS. According to Seshamani and Jacobs, this is “not sufficient,” and CMS is exploring more ways to bring hospitals into compliance.
Others are also looking to improve the compliance rate. Sen. John Kennedy (R-La.) recently introduced the Hospital Transparency Compliance Enforcement Act that would increase penalties on hospitals by double. For non-compliant hospitals, penalties would increase to $600 per day for hospitals with 30 or fewer beds, $620 to $11,000 per day for hospitals with 31 to 550 beds and $11,000 per day for hospitals with more than 550 beds, according to Kennedy.
“Patients deserve to know the true cost of hospital items and services. I wrote this bill to protect patients by making hospitals clarify how much a visit might really cost so that patients can make informed choices about their care,” Kennedy said in a statement.
CMS is also engaging with parties for feedback on the best path forward, including holding a listening session from consumer groups on the best ways to display the information for consumers. Plus, the agency is working on standardizing the price transparency information. Third, CMS is looking at ways to make it easier to find and access hospital machine-readable files for the public. Feedback has indicated these files are hard to find. Lastly, CMS is focused on streamlining enforcement efforts, such as expediting the timeline for hospitals to comply with a corrective action plan.
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."