CMS eyes stiffer penalties for price transparency noncompliance

Since the hospital price transparency rule went into effect in January, the rate of compliance has been low. The rule was supposed to allow consumers to find the negotiated rate for common health care procedures and better estimate how much it will cost them. And while many consumers continue to be unaware of the new rule, those that do try to take advantage of it are likely to come up empty-handed.

A new proposal from the Centers for Medicare and Medicaid Services would increase the penalties for noncompliance. If approved, starting in January 2022, the penalty would rise to $300 a day for smaller hospitals and $10 per bed per day for larger hospitals, up to a daily maximum of $5,500. The maximum per-year penalty would rise from its current limit of $109,500 to $2,007,500 for large hospitals.

Related: Work in progress: Price transparency efforts need to go further

“No medical entity should be able to throttle competition at the expense of patients,” HHS Secretary Xavier Becerra said in a statement. “With today’s proposed rule, we are simply showing hospitals through stiffer penalties: concealing the costs of services and procedures will not be tolerated by this Administration.”

The proposal also addresses another issue that has arisen since the transparency rule was implemented: Facilities using computer coding to make their price list files inaccessible to internet searches. The CMS is seeking to update its list of activities that create barriers to access to prevent such workarounds.

The price transparency rule is just the first step in reforming a system with a history of price secrecy, and bringing those practices into the light will take time, as well as some trial and error. Thus, the CMS is also looking for input on other issues to further transparency in the future, including:

• Considerations for “best practice” online price estimator tools;
• Improving expectations related to “plain language” descriptions of shoppable services;
• Methods to identify and highlight exemplar hospitals; and
• Improving standardization of the machine-readable files.

Following a 60-day comment period and review, a final rule will be issued in November.

Read more: 

• Time to revisit out-of-pocket expenses calculations? Consumers burn through their share in a matter of days.
• When it comes to health care services, consumers are missing out on big savings
• Consumers are willing to shop around for a more transparent health care experience