Hospital Price Transparency Rule Compliance Remains Low as CMS Moves to Begin Penalties

The hospital price transparency rule, which was issued by the Centers for Medicare and Medicaid Services and went into effect on January 1, 2021, is largely being ignored by hospitals who would prefer to absorb any financial penalty than comply. CMS has only started to impose fines as of last Wednesday, according to an agency email, but the vast majority of hospitals remain noncompliant.

Compliance is disparate between larger hospital systems, which can absorb the monetary penalty suggested by CMS of up to $2 million per year, and hospitals in less concentrated markets. According to Modern Healthcare, researchers don’t think that  low enforcement will last. From Katherine Hempstead, senior policy adviser at the Robert Wood Johnson Foundation:

It is too bad that so far the public is not benefiting as intended from these hospital transparency regulations, but I do think those entities who may think they are winning this battle will ultimately lose the war. Time is not on their side.

Analysis of compliance with the Hospital Price Transparency Final Rule published in the JAMA Network last Tuesday shows that over half of the 5,239 hospital websites monitored since the effective date are entirely noncompliant with the rule. Benefits Pro reports that 14% had a machine-readable file that listed services, fulfilling one requirement for rule compliance. Another 30% had shoppable services displayed that include gross charges and discount cash prices for 300 services. Fewer than 6% of hospitals complied with both requirements.

Total gross revenue of a hospital had no significant association with adherence to the rule, but those with the lowest revenue per patient-day was associated with higher compliance. Rural hospitals were also less compliant with the rule.

The CMS email reported that two hospitals in Georgia have been fined more than $1 million for failing to disclose charges. Associated Press reports that Northside Hospital Atlanta and Northside Hospital Cherokee were the first two hospitals in the country to face these penalties. CMS also mentioned that both hospitals had been warned prior to receiving the fine, but Northside Atlanta told CMS last November that patients should request price estimates directly from a hospital representative.

Hospitals argue that the low adherence has to do with high cost of implementation, according to Fierce Healthcare. Furthermore, they claim to find the language of the rule difficult to parse. An April report that polled 66 hospital revenue cycle leaders on the rule, from KLAS Research,

Many organizations are not investing beyond the bare minimum requirements, and they don’t plan to do more until there is further clarity around the regulations and the expectations going forward.