After months of warnings, CMS hands out its first fines to hospitals failing on price transparency
By Dave Muoio / June 9,2022
Eighteen months after its final rule on price transparency went into effect, the Centers for Medicare and Medicaid Services issued its first penalties to a pair of Georgia hospitals that did not update their websites or reply to the agency’s warning letters.
Northside Hospital Atlanta and Northside Hospital Cherokee have been issued civil monetary penalties of roughly $880,000 and $214,000, respectively, according to letters published on CMS’ Hospital Price Transparency website. Both hospitals are part of the same health system.
The agency calculated the penalties based on the hospitals’ size and how long their websites were non-compliant (up to $300 per day). The hospitals may submit a request for a hearing to have their penalties appealed.
“CMS expects hospitals to comply with the Hospital Price Transparency regulations that require providing clear, accessible pricing information online about the items and services they provide," Director of Medicare Meena Seshamani, M.D., said in an email statement provided to Fierce Healthcare. "This enforcement action affirms the Biden-Harris Administration’s commitment to making health care pricing information accessible to people across the country and we are committed to ensuring that consumers have the information they need to make fully informed decisions regarding their healthcare.”
Since Jan. 1, 2021, CMS has required hospitals to post a comprehensive machine-readable list of their services and prices as well as a patient-friendly tool to help shop for 300 common services.
Hospitals that are not compliant with the requirements receive warning letters from CMS requesting they submit a corrective action plan to amend their websites.
The agency began delivering those letters in April, saying at the time it was hesitant to issue civil monetary penalties due to the harm that publicly naming noncompliant hospitals could bring to those organizations.
In the warning letters, CMS said it had conducted reviews of their websites, requested corrective action plans and delivered warning notices to both hospitals last fall. CMS issued warning to the hospitals in April and May, according to the letters, which neither hospital responded to.
CMS has issued a total 352 warning letters to hospitals as of this month, according to a CMS spokesperson. Among these, 171 received case closure notices after addressing the agency's citations while 157 remain non-compliant, the spokesperson said.
Industry-wide compliance with the federal transparency requirements has been spotty to date. Only 14.3% of hospitals were compliant with both major components of the mandate one year after it went into effect, according to a review by PatientRightsAdvocate.org.
A study published in JAMA earlier this week corroborated low compliance as of the six to nine months after the rule went into effect, noting that hospitals in low-concentration healthcare markets, urban hospitals and those with lower per patient-day revenue were more likely to be in compliance.
Hospitals and health systems say their adherence struggles are the result of the high cost and complexity of implementation. They’ve also pointed to the final rule’s language, which they say is vague and difficult to interpret.
“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,” KLAS Research wrote in an April report polling 66 hospital revenue cycle leaders on price transparency compliance.