Hospital price transparency update: Regulatory enforcement soon could become stricter, CMS leaders say

Although nothing is official, CMS leaders indicate enforcement of hospital price transparency regulations is set to become more stringent.

For an article published in Health Affairs, the Center for Medicare’s Meena Seshamani, MD, PhD, director, and Douglas Jacobs, MD, chief transformation officer, touted progress that has been made since the rules took effect Jan. 1, 2021. But they also described room for improvement.

They noted that a CMS analysis found at least 30% of hospitals were not fully complying with the regulations in 2022, down from 73% the year before.

The second-year tally “represents a marked improvement over the 2021 analysis, but it is not sufficient,” they wrote.

The latest enforcement data

In the first two years of the regulations, according to the article, CMS issued nearly 500 warning notices and more than 230 requests for corrective action plans. About 300 hospitals have addressed the issues that led to a warning notice, thereby coming into compliance and allowing for their cases to be closed.

To date, only two hospitals have been fined for persistent noncompliance. The combined penalty for the hospitals, which are part of the same health system in the Atlanta area, amounted to almost $1.1 million. The patient advocacy group PatientRightsAdvocate.org reported last year that soon after paying the fine, the hospitals were found to have come into full compliance with the regulations.

Daily fines can be assessed to hospitals that do not expeditiously make improvements in accordance with a corrective action plan. Amounts per day vary based on bed size from $300 for the smallest hospitals to $5,500 for the largest. A proposed bill by Sen. John Kennedy (R-La.) would double those penalties, but its chances of becoming law are murky.

A glaring lack of standardization

One potential change is an increased emphasis on standardization in hospitals’ posting of price information, the CMS leaders stated.

“The current regulations permit some flexibility related to form and format, so long as the hospital makes public its standard charges in a machine-readable file format and includes certain minimum data elements,” Seshamani and Jacobs wrote.

A recent report from the Peterson-KFF Health System Tracker cited inconsistency in linking listed prices to specific services as one issue hampering the application of price transparency data.

“These challenges do not result necessarily from lack of compliance with the rule; rather, these findings highlight its shortcomings in facilitating price comparisons,” the report states. “The complexity of using the data is largely due to a lack of standardization and specification in the reporting requirements.”

Posted charges should have to incorporate the following elements, the report recommends:

• The charge’s applicable hospital setting (inpatient or outpatient)
• Charge type (facility or professional)
• Associated charge modifiers
• The relevant time period
• Any bundles that include the charge
• Health plan type
• The difference between the charge and the base rate

Seshamani and Jacobs noted that a standardized template has been available since November for use on a voluntary basis. They did not say whether such a template could become mandatory.

Other changes under consideration

Seshamani and Jacobs said CMS also could incorporate precise requirements governing the location and accessibility of price transparency information on hospital websites. The agency also is considering whether to reduce the time for hospitals to come into full compliance after submitting a corrective action plan to CMS.

“CMS also plans to take aggressive additional steps to identify and prioritize action against hospitals that have failed entirely to post files,” they warned.