Price transparency compliance tied to potential of increased penalties

Hospitals have made significant efforts to comply with price transparency regulations due to increased civil monetary penalties (CMP) from CMS, according to a recent JAMA Network Open study.

The study looked at how increased penalties impacted 4,377 acute care hospitals’ compliance with the Hospital Price Transparency rule between 2021 and 2022. Study authors noted that because CMS only issued CMPs to two hospitals during the time of their research, the results should be interpreted in terms of potential penalties.

Regardless of bed count, hospitals could only receive $300 in CMPs per day in 2021. CMPs increased to $10 per bed per day in 2022. Hospitals with no more than 30 beds had a minimum of $300 in penalties per day, and hospitals with 550 or more beds had a maximum of $5,500.

The Hospital Price Transparency rule requires hospitals to list all prices online 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. To determine compliance rates, study authors checked the website of each sampled hospital in December 2021 and December 2022 to confirm whether a file was posted.

Overall, compliance rates among the sampled hospitals increased by 17.3% during the study period, with 87.7% of hospitals complying by the end of 2022. In other words, noncompliance rates decreased by over half, from 29.6% in 2021 to 12.3% in 2022.

“The results of this cohort study suggest that financial penalties may be a valuable tool for ensuring compliance with CMS policy when fines are sufficiently large, noncompliance is readily observable and well defined, and enforcement is credible,” wrote study authors.

CMS released a fact sheet in April to detail its updated enforcement policies for the Hospital Price Transparency rule. The agency revealed it would start requiring corrective action plan (CAP) completion deadlines, imposing CMPs earlier and automatically, and streamlining the compliance process.

As of the fact sheet’s publication, CMS had issued more than 730 warning notices and 269 CAP requests. It has also imposed CMPs on two additional hospitals for noncompliance.

To avoid CMPs and other enforcement actions by CMS, organizations must prioritize price transparency compliance. Add price transparency to internal audit plans and ensure all requirements are met for both online formats.

Editor’s note: Find more NAHRI coverage of price transparency here.