The Hospital Price Transparency Final Rule was published three years ago this month. Also referred to as “the final rule”, it went into effect in January of last year. The rule makes it so that Americans are always made aware of the costs of hospital items and services before receiving them. Compliance to the regulation is considered mandatory. The purpose of implementing the Hospital Price Transparency Final Rule is to make hospital care more affordable.
One way the ruling does this is by promoting price competition. Naturally, hospitals that do not comply with the final rule compromise its overall effectiveness. The Centers for Medicare & Medicaid Services (CMS) is the federal agency responsible for enforcing the regulation. Along with the American Hospital Association (AHA), CMS works to ensure compliance in all hospitals.
Some of the biggest hospitals have failed to comply with the final rule.
As reported by Joanne Byron on behalf of the American Institute of Healthcare Compliance, many hospitals have been found to be non-compliant with the final rule. She cites a December 2021 Wall Street Journal article entitled, “Hospitals Still Not Fully Complying with Federal Price-Disclosure Rules”. It reports upon a Johns Hopkins Bloomberg School of Public Health study that found that 55 percent of hospitals were non-compliant with the final rule.
“Another report issued by the Patient Rights Advocate found that only 14 percent of hospitals were fully compliant with all of the provisions of the final rule as stated in their Semi-Annual Hospital Price Transparency Compliance Report published in February, 2022,” Bryon reveals, “Over half of the approximately 40 percent of hospitals that posted negotiated rates were non-compliant with other provisions of the final rule including failure to post the payer specific negotiated rates.”
The regulations set forth by the final rule are clear.
Among them is the requirement of hospitals to make public a machine-readable file. It must contain a list of all the standard charges for all items and services. As well, the file must display charges for the hospital’s 300 most shoppable services in a consumer-friendly format. In addition, the final rule stipulates that hospitals must make public the gross charges, the discount cash price, the payer-specific negotiated charges and the de-identified minimum and maximum negotiated charges for all items and services.
If hospitals are found to be non-compliant, the Department of Health and Human Services issues them warning notices. They may also receive requests for a corrective action plan (CAP) if non-compliance constitutes a material violation of one or more of the final rule’s requirements. If the non-compliance is still not resolved, the hospital can face a civil monetary penalty (CMP).
Hundreds of warning letters have been issued.
Byron reports that, at the beginning of last year, CMS began proactive audits of hospitals for compliance with the final rule. They also reviewed complaints submitted via the hospital price transparency website. As of January 2022, CMS has issued over 300 warning letters. They have also issued 98 requests for CAP for hospitals deemed to be non-compliant. In June 2022, CMS issued CMP notices to two hospitals for failure to comply with the final rule.
“20 percent of hospitals did not allow consumers to see discounted cash price, which is in clear violation of the final rule,” Byron reports of a CMS press release, “This follows a series of other reports documenting hospitals’ slow compliance with the requirements of the final rule, and some hospitals’ complete lack of compliance.”
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