CMS preparing to raise fines on price transparency noncompliance

We are now over six months past the deadline for hospitals to comply with the Centers for Medicare and Medicaid Services’ (CMS) Hospital Price Transparency final rule. However, a random sampling of 500 hospitals performed by PatientsRightAdvocate.org revealed that ~95% were noncompliant. The current penalty for non-compliance in following the guidelines, knowingly or unknowingly, is $300 per day.

Given the current trends, CMS is preparing to make noncompliance more expensive. A proposed 2022 update would keep the $300 penalty for hospitals with 30 or fewer beds, but raise the penalty on each additional bed by $10, with a maximum allowable penalty of $5,500 per day. This equates to upwards of $2 million for a hospital with over 500 beds and roughly $300K for a community hospital with ~100 beds.

This new requirement would be in line with the recent Executive Order on Promoting Competition in the American Economy signed by President Biden, who is seeking to promote competition in the American marketplace. The order specifically calls on the Department of Health and Human Services to increase enforcement on hospital price transparency.

To comply with price transparency, hospitals must publish:

  •  A single machine-readable digital file containing the following standard charges for all items and services provided by the hospital: gross charges, discounted cash prices, payer-specific negotiated charges and de-identified minimum and maximum negotiated charges.
  • A display of at least 300 “shoppable services” (or as many as the hospital provides if less than 300) that a healthcare consumer can schedule in advance. The information must contain plain-language descriptions of the services and group them with ancillary services, provide the discounted cash prices, payer-specific negotiated charges and de-identified minimum and maximum negotiated charges.

Many organizations are still operating extremely lean and do not have the bandwidth to comply with the mandate, nor can they take on a significant additional financial burden. Others may not understand or be fully aware of the requirements or the penalties of noncompliance.

Mazars has the expertise and ability to help you achieve and maintain compliance and avoid costly penalties. Learn more about how Mazars’ Healthcare Consulting Practice helps.

Published on July 26, 2021

Authored by Cheyenne Holland & C.J. Ehrentraut

Author