CMS Ramping Up Hospital Price Transparency Enforcement

Written by Catherine B. Moore.

It is more important than ever to ensure that hospitals are in compliance with the Centers for Medicare & Medicaid Services (“CMS”) Hospital Price Transparency Regulations (Section 2718(e) of the Public Health Service Act) (“Price Transparency”), as CMS reported that they will be tougher with their Price Transparency enforcement moving forward. On April 26, 2023, CMS issued a “Hospital Price Transparency Enforcement Updates” Fact Sheet detailing their efforts to double down on enforcement and compliance with the Price Transparency rules. The Hospital Price Transparency regulations generally require each hospital operating in the U.S. to make its standard charges publicly available in: (1) a single comprehensive machine-readable file; and (2) a consumer-friendly display of standard charges for shoppable services. The Price Transparency regulations are very detailed on the types of standard charges that must appear in each format. Hospital compliance with the requirements has been varied, with some hospitals arguing that the Price Transparency requirements are too difficult and complicated to comply with.

Original Enforcement Process

Under the original enforcement process, if it was determined that a hospital was out of compliance with the Price Transparency regulations, the case cycle consisted of first a warning notice with instructions to correct the deficiencies within 90 days. After the 90-day period, if the hospital was still not in compliance, CMS would issue a corrective action plan (“CAP”) request. Then, for hospitals that had not completed the necessary steps to come into compliance, CMS would issue a civil monetary penalty (“CMP”). Under that cycle, the average time from initiating an enforcement action to completion of a case was between 195 and 220 days.

Audits and Penalties

CMS has increased the number of comprehensive reviews of hospital’s published Price Transparency information from 30-40 per month to over 200 comprehensive reviews per month. 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.

Updates to Enforcement Process

As part of its efforts to ensure that every hospital complies with the Price Transparency requirements, CMS is updating the enforcement process with respect to areas that do not require rulemaking. In summary, the updates include:

Streamlining the Process: For hospitals that have not made any effort to satisfy the requirements, including those that have not posted any machine-readable files or shoppable services, CMS will no longer issue a warning notice to the hospital and will immediately request that the hospital submit a CAP.

Deadlines: CMS will continue to require hospitals that are out of compliance with hospital Price Transparency regulations to submit a CAP within 45 days of when the request is issued. Previously, hospitals after submitting a CAP, hospitals were permitted to propose a completion date for complying with the CAP. Now, CMS will require full compliance within 90 days from when CMS issues the CAP request.

Imposing Penalties Earlier: Under the original enforcement process, CMS did not impose automatic CMPs for failure to submit a requested CAP. Now, CMS will automatically impose a CMP on hospitals that fail to submit a CAP at the end of the 45-day submission deadline.                 

According to CMS, these updates will shorten the average time by which a hospital must come into compliance with the Price Transparency requirements after a deficiency is identified to no more than 180 days, or 90 days for cases with no warning notice.

What Does This Mean for Louisiana Hospitals?

Currently, no CMPs have been imposed on any Louisiana hospitals. However, the current penalties issued have ranged from $102,000 to nearly $900,000. Hospitals should make every effort to comply with the Price Transparency regulations. CMS has increased its audit of hospital’s Price Transparency files so it will be difficult to hide non-compliance. If you receive a warning notice, do not ignore the notice. You must take immediate steps to come into compliance with the Price Transparency regulations. Given the shorter timelines to comply with warning notices and CAPs, it is important to act quickly.

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