In September, The Centers for Medicare & Medicaid Services (CMS) issued fines against two hospitals that allegedly violated the agency’s price transparency rule. This marks a notable increase in the agency’s enforcement efforts, as it issued fines for the third consecutive month, after several years of generally light enforcement.
The victims of the two fines handed out on September 5th were Saint Elizabeths Hospital in Washington, D.C., which was fined $677,440, and Holy Cross Hospital in Silver Spring, Maryland, which was fined $325,710. These fines represent the 13th and 14th penalties CMS has imposed on hospitals for price transparency violations.
CMS’s rule is designed to promote patient access to hospital pricing data, thereby better enabling them to compare costs and make informed decisions regarding their healthcare services. It mandates that hospitals must post their gross charges, payer-specific negotiated charges, de-identified minimum negotiated charges, de-identified maximum negotiated charges, and cash prices on their websites. It also requires them to publish a consumer-friendly version of the pricing for their 300 most commonly used services.
Since the rule went into effect on January 1, 2021, enforcement was relatively lax until June 2022, when two Georgia hospitals became the first to be fined. A subsequent round of fines were issued in April of this year.
However, CMS seems to have ramped up its enforcement of the rule in the last few months, issuing three fines in July and five in August. It appears that the increased enforcement may be due to hospitals starting to better comply with the rule – something that was not always the case.
While a JAMA study from June last year found that fewer than 6% of hospitals were fully compliant with the rule, recent data from Turquoise Health shows improvements in compliance rates. In the first quarter of 2023, 84% of hospitals had posted some sort of pricing data online, according to a report by the organization.
In response to those improvements, CMS updated its enforcement process in April. Hospitals found in violation now have 45 days from the time a noncompliance notice is issued to submit a corrective action plan and must achieve full compliance within 90 days of that notice. Civil monetary penalties are automatically imposed on hospitals which fail to submit a corrective action plan within this timeframe.
Following the issuance of a noncompliance fine, hospitals have a 30-day window to appeal. Of the 14 hospitals hit with noncompliance fines, three have chosen to appeal their penalties, with CMS noting these cases are still under review.
For additional reading check out the article from MedCityNews.