Price transparency rules tighten

Price transparency laws require healthcare providers, hospitals and insurance companies, to disclose the prices of their services and procedures to patients. The aim of these laws is to provide patients with more information about the costs of healthcare services, enabling them to make informed decisions about their medical care and potentially lower their out-of-pocket expenses.  

But a recent study from Turquoise Health shows how many hospitals are currently out of compliance with price transparency laws. As of the end of March 2023, 84% of hospitals had posted a machine-readable file with pricing information, 74% posted their negotiated rates and 71% posted their cash rates. 

On April 26, Centers for Medicare and Medicaid Services (CMS) announced that they are making changes to how they will enforce price transparency requirements in a press release. 

5 changes price transparency enforcement 

1. Hospitals will have to comply with price transparency requirements after a deficiency is detected within a maximum of 180 days, or 90 days if no warning notice is given. 

1. CMS still requires non-compliant hospitals to provide a corrective action plan within 45 days but is updating its policy to mandate full compliance within 90 days. Previously, hospitals were allowed to suggest a completion date for CMS approval, with varying possibilities. 

1. Hospitals that do not submit a corrective action plan at the end of the 45-day deadline will be automatically fined. CMS will conduct a follow-up review of the hospital’s records to identify any ongoing violations cited in the request for a corrective action plan, and subsequently impose fines, if applicable. 

1. If a hospital submits a corrective action plan within the 45-day deadline but fails to adhere to its terms by the 90-day deadline, CMS will review the hospital’s records again to ascertain whether any cited violations persist. If there are any outstanding violations, CMS will automatically impose a fine. 

1. Hospitals that make no effort to fulfill price transparency requirements will no longer receive warning notices. Currently, CMS issues a warning notice before initiating corrective action plans. 

As of April 2023, CMS has distributed more than 730 warning notices and 269 corrective action plans. Since the federal rule was enacted in 2021, only four hospitals have been fined for price transparency violations including two in June and two on April 19th, 2023.  

Most recently, Rochester, New Hampshire-based Frisbie Memorial Hospital was fined $102,660 for failing to provide machine-readable files with all standard charges.  

Wichita Falls, Texas-based Kell West Regional Hospital was fined $117,260 for failing to adhere to requirements to have a consumer-friendly display of standard charges.  

They have since filed an appeal citing issues with the company they hired to display standard charges. Kell West CEO Jerry Myers, MD, said CMS has already confirmed compliance as of May 4, 2023. 

In an appearance before Congress on April 26, CMS Administrator Chiquita Brooks-LaSure says the new enforcement policies, “will incentivize competition, improve consumer experience and result in additional savings for our healthcare system and for patients.”  

There are currently 17 additional proposals that could strengthen price transparency enforcement that the Health Subcommittee will consider at a later date.