CMS Doubles Down on Their Expectation for Price Transparency

by | Nov 17, 2021 | Blog

Overview

On November 2, 2021, CMS released the anticipated CY 2022 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Final Rule (CMS-1753-FC), finalizing this year’s Medicare payment rates for hospital outpatient and ASC as well including regulatory guidance regarding several high profile policies for hospitals providing outpatient services. CMS evaluated industry feedback to the proposed modifications, including halting the elimination of the Inpatient Only list (IPO), broadening the impact of the Hospital Price Transparency Rule, and other updates.

The Hospital Price Transparency Rule Remains

CMS has confirmed they will not be repealing the “Hospital Price Transparency Rule” but instead made modifications to increase compliance with the Rule beginning January 1, 2022. Although independent industry research suggests that over 90% of our nation’s hospitals have failed to fully comply with this Rule, CMS stressed that they “expect hospitals to comply with these requirements” and will enforce the Rule to ensure people understand what hospitals charge for services.

Enforcement and Penalties for Non-Compliance

One of the most significant ‘modifications’ CMS will be implementing is the increase in civil monetary penalties (CMP) associated with non-compliance. CMS has already begun auditing hospital websites and is also following up on complaint submissions received since January 1, 2021, effective date, which has resulted in the issuance of hundreds of warning letters. The warnings provide hospitals 90-days to address any deficiencies identified before any additional corrective action is taken. Beginning on January 1, 2022, hospitals failing to comply with the price transparency provisions in the CY 2022 OPPS Final Rule may also be subject to the following CMPs:

  • The daily penalty for hospitals with up to 30 beds will be $300/day;
  • The daily minimum penalty for hospitals with more than 30 beds will be $10/day/bed, with the maximum penalty set at $5,500/day;
  • The maximum civil monetary penalties for 1-year failed compliance would range from $109,500 for smaller hospitals and stretch to $2,007,500 per hospital for larger systems.

Prohibiting Barriers to Accessibility

The OPPS 2022 Final Rule also reinforces the requirements relating to the machine-readability of the files, including what needs to be displayed and accessible. The Rule explicitly requires publication of the regular rate established by the hospital for at least 300 “common” services and items provided and includes:

  • The gross charge for the service;
  • The payer-specific negotiated charge for the service;
  • The de-identified minimum negotiated charge;
  • The de-identified maximum negotiated charge; and
  • The discounted cash price.

These five (5) charges must be made available in file form on the hospital website and include descriptions of the health service or item along with a common billing code. CMS also requires the file to be made available on a user-friendly website and easily accessed by automated searches and direct downloads.

CMS has stressed that while these enforcement activities are necessary to ensure compliance with the price transparency initiative, CMS is also cognizant of the burdens already faced by health care providers and wants to collaborate with hospitals to help them meet these requirements.

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