In April, CMS sent its first wave of warning letters to hospitals that were not in compliance with its Hospital Price Transparency Rule, which took effect at the beginning of the year.
While it’s not clear which hospitals received warning letters or even how many hospitals CMS contacted, the odds that any given hospital would receive such a letter after being audited are high. According to the most recent data available (published in July), only 5.6 percent of hospitals are fully compliant with the rule.
If you’re among the 94.4 percent without fully compliant pricing files published on your site – whether or not you received a letter from CMS – Healthcare Data Analytics can help you come into compliance. Here’s what you need to know to take action.
(Not sure whether you’re compliant? Find out with our Compliance Dashboard.)
What Does a Warning Letter Mean?
If CMS sent your hospital a warning letter in April, it means that someone from CMS audited your hospital’s website and determined that it is not in compliance with the Hospital Price Transparency Rule. This could mean…
- You have posted incomplete pricing information (e.g., you’ve posted either a consumer-friendly version of prices or a machine-readable version, but not both.)
- You’ve posted complete pricing information that doesn’t meet formatting requirements (e.g., it’s in the wrong file type).
- You have published pricing information that meets formatting requirements but is not easily findable on your website.
- You have not published any pricing information.
In the spring, sources noted that hospitals that received a warning letter would have 90 days to get into compliance after receiving the letter, after which point CMS would re-audit their sites.
If the site was still not in compliance, CMS would either issue a second warning or request a corrective action plan.
It’s worth noting that warning letters represent a gentler form of enforcement than what’s outlined in the final Rule, which states that, if a hospital is noncompliant, the CMS can…
- Request a corrective action plan.
- Assess a civil penalty of up to $300 per day.
- Publicize the penalty on the CMS website.
Since the first wave of warning letters, though, we haven’t heard any more about enforcement. That has frustrated patients’ rights organizations, some of which have taken to conducting their own audits and publishing the names of compliant and noncompliant hospitals on their own websites.
Despite CMS’s relative quiet on the enforcement front, hospitals shouldn’t be lulled into a false sense of security. Here’s why.
Noncompliance Penalties May Rise
In July, The Biden Administration proposed higher penalties for hospitals that don’t comply with the Hospital Price Transparency Rule – up to $2 million per year or more than $5,000 per day. That’s a significant increase from the current $300 per day maximum penalty.
While no increase has yet been implemented, there is other evidence suggesting that they might in the future. In September, for example, the Robert Wood Johnson Foundation published a report examining the effectiveness of the Rule and offering recommendations for making it more effective.
Among them was a recommendation that noncompliance penalties increase to $5,500 per day, or just over $2 million per year.
The report also urged CMS to dedicate more resources to enforcement and to bring in other parties (including states) to support enforcement efforts.
No Guidance on File Format Hampers Compliance
Another main finding from the Robert Wood Johnson report is that CMS’s decision not to issue guidance on the format price transparency files should take is hampering compliance.
This isn’t surprising: CMS asked hospitals to publish a lot of data while adhering to a lot of requirements, but left it up to individual organizations to figure out the “how.”
Few hospitals have the resources to do that work. What’s more, it’s inefficient to ask every hospital to essentially solve the same problem over and over. The report recommended that CMS publish a template hospitals can use to publish their data compliantly.
In the absence of such a template, though, HDA’s consultants can help hospitals create and publish data files that meet CMS’s requirements.
Compliance Helps Improve Healthcare Outcomes
The CMS’s stated goal in requiring hospitals to publish their prices is to not only boost transparency but also to drive innovation in healthcare. While we agree that price transparency can pave the way for greater innovation, we also recognize that most hospitals don’t have the resources to organize and publish their pricing data in a way that meets CMS criteria – especially in the absence of any clear guidelines on formatting.
That’s why we’ve committed to not only making published data easier to view and analyze but also to help hospitals get their pricing files live. If you’d like to hear more about how we can help you publish your pricing so that you’re compliant with the Hospital Price Transparency Rule, get in touch.