To be compliant with CMS’ Hospital Price Transparency Rule, which went into effect on January 1, 2021, all hospitals in the U.S. are required to publish pricing information online for inpatient and outpatient services, and the rates they negotiate with private insurers in two ways:
- As a comprehensive machine-readable file
- As a list of shoppable services in a consumer-friendly format
The new rule’s goal is to make it easier for consumers to find and compare costs in different hospitals and estimate their cost of care before treatment.
Yet few adults are aware of this new requirement, according to a May 2021 Kaiser Family Foundation Survey. Only 9% know that hospitals are required to disclose the prices of treatments and procedures on their websites, 22% say hospitals are not required to reveal this information, and 69% are unsure about the rules.
A University of Minnesota School of Public Health faculty study in early 2021 showed that less than a quarter (23.7%) of hospitals were fully compliant with the price transparency regulations. Less than 6% of hospitals were fully compliant in a Patient Rights Advocate analysis conducted from May to July.
CMS began auditing hospital websites, reviewing complaints, and issuing warning letters to non-compliant facilities in April. Once hospitals receive a warning letter, they have 90 days to address the findings of noncompliance. After that time period, they may receive a second warning letter or a request for corrective action. CMS can also fine hospitals for violating the requirements.
Hospitals opposed the implementation of Trump administration’s price transparency policy, but the Biden administration has made it clear that the rule is here to stay. The administration is cracking down on hospitals that are not making clear, accessible pricing available online. CMS has proposed increasing the minimum fine to $300 per day for hospitals with 30 or fewer beds, and $10 per day per bed in hospitals with more than 30 beds (up to $5,500 daily). Facilities could be fined between $110,000 and more than $2 million.
But though the Biden administration is upholding existing transparency rules, experts expect that these initiatives aren’t likely to drive its healthcare agenda. The new administration may be more open to other legislative or regulatory changes, including price setting, to decrease healthcare costs for consumers.
Learn more about Stroudwater’s Pricing Transparency services for hospitals.