Colorado law adds penalties to price transparency requirements

Federal price transparency regulations are forging ahead with the help of state-level reinforcements like Colorado’s HB 22-1285. The act prohibits a hospital from collecting a patient’s debt if their charges were acquired on a date when the hospital was noncompliant with the CMS price transparency requirements.

The act, titled “Prohibit Collection Hospital Not Disclosing Prices,” took effect August 10, but critical access hospitals have until February 15, 2023, to comply. Patients can file a lawsuit if they believe “a hospital was not in material compliance with price transparency laws,” according to the bill. If the court rules in favor of the patient, hospitals could be required to pay a penalty equal to the amount of debt originally sought through collection.

The Hospital Price Transparency Rule, which requires hospitals to clearly list prices for items and services online, took effect January 1, 2021. According to CMS, these prices must be in the form of a machine-readable standard charges file, as well as a consumer-friendly display or tool for the 300 most common shoppable services.

Hospitals have been slow to adopt all of the requirements of CMS’ price transparency regulations since implementation, but the agency has recently shown that it will enforce them. After failing to respond to notices and provide corrective action plans, two Georgia hospitals were the first to receive civil monetary penalties (CMPs) from CMS. In June, Northside Hospital Cherokee and Northside Hospital Atlanta were fined $214,320 and $883,180, respectively.

PatientRightsAdvocate.org issues its “Semi-Annual Hospital Price Transparency Compliance Report” to assess the extent systems are following the 2021 Hospital Price Transparency Rule. Its third report, published August 9, showed 16% of 2,000 sampled hospitals in full compliance and 5.1% in “total noncompliance.” Additionally, the report showed the two Georgia hospitals who were issued CMPs by CMS are now in full compliance.

This new data shows price transparency regulation compliance rates are continuing to increase. The first report, published six months after implementation, showed full compliance in 5.6% of 500 sampled hospitals. After one year, 14.3% of 1,000 sampled hospitals were in full compliance.

Along with CMS enforcement, potential CMPs, and increasing compliance rate among competitors, state-level legislative attention and an increasingly price-conscious, savvy public will encourage noncompliant hospitals to act.

Revenue integrity professionals need to stay up to date on the latest price transparency developments at the state and federal level. Add price transparency to internal audit plans and ensure public-facing price information is current. Ensure any compliance gaps are addressed and that these efforts continue to receive support from senior leadership.

Editor’s note: Find more NAHRI resources on price transparency here.