Hospital Price Transparency Enforcement Heats Up

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CMS is enforcing its rule with penalties.

The Centers for Medicare & Medicaid Services (CMS) is focusing new funding and efforts on hospital price transparency compliance enforcement. At the same time, state-level agencies like the Texas Health and Human Services Commission (HHSC) have begun issuing material violation notices and penalties for non-compliance.

In September 2022, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) added CMS Hospital Price Transparency oversight to their Work Plan. The Work Plan includes a review of the audit controls in place at CMS to ensure that mandated hospital price transparency information has been made publicly available, as required by law.

“To evaluate CMS’s monitoring and enforcement of the hospital price transparency rule, we will review the controls in place at CMS and statistically sample hospitals to determine whether CMS’s controls are sufficient to ensure that hospital pricing information is readily available to patients as required by Federal law,” the agency said.

If the hospitals reviewed do not comply with CMS’s rule for publicly posting their pricing and rate information, OIG will contact the hospitals to assess the reason for noncompliance and determine any imposed consequences.

In addition to the OIG Work Plan, HHSC recently awarded a contract to an outside consulting agency for an initiative titled “Hospital Price Transparency Enforcement and Compliance.” The start date of the award is July 7, 2022, with enforcement work continuing into 2027.

Compliance with the federal price transparency mandate has been proceeding at a crawl, as many hospitals claim that the overwhelming administrative burden and lack of IT and revenue cycle staff make meeting the requirements difficult. There is also the difficulty and complexity associated with gathering the correct data sources, extracting the information, and building the technical resources required to meet the rule.

There are two core mandated formats that hospitals must produce to meet the price transparency mandate. First, and most importantly, there is the comprehensive machine-readable file of all items and services. This format must include pricing information for all of a hospital’s items and services, and all commercial payor-negotiated rates, down to the plan level.

In addition to the machine-readable file, hospitals must also produce a display of “shoppable” services, providing a user-friendly experience for patients to filter through pricing information. This format requires a total of 300 services, 70 of which have been pre-defined by CMS. The consumer-friendly experience must be free of barriers, such as requiring registration, login, or insurance information to gain access to hospital pricing.

Hospitals can benefit by creating the machine-readable file in a modern and API-ready data format (like JSON or XML) to prepare for the next phase of requirements, and to utilize their own data points within other internal software programs. Unlike the hospital price transparency rule, CMS has invested in the development of a standardized schema for the Transparency in Coverage rule, which is a similar rule applicable to the insurance companies.

An assumption can be made that a similar schema will soon apply to the hospital price transparency machine-readable files to address inconsistencies with the data formats due to a looser set of restrictions in the rule.

About the Author:

Jory Hatton is CEO of ClaraPrice, Inc., a hospital compliance organization based in Austin, Texas. ClaraPrice provides hospitals with innovative software solutions to offload the administrative burden of internal management of CMS Price Transparency and No Surprises Act compliance. After serving in roles both as Vice President of Engineering and Product, Jory co-founded ClaraPrice to accelerate innovation in healthcare IT and patient access.

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