Effective January 1, 2021, CMS implemented the price transparency rule requiring hospitals, defined as an institution that is licensed as a hospital or is meeting the applicable licensing requirements, to annually disclose to the public the standard charges/prices for all services and/or items to be provided to patients. More than two years later, price transparency is here to stay, and compliance is no longer optional.
The rule provided specific guidance on how information should be displayed for ease of patient use. The two formats of display include:
- Machine-Readable File (MRF): An electronic file that contains the hospital’s charge description master (CDM) standard fields plus gross charge/price, discounted cash amount, payor and plan-specific negotiated amounts, and minimum/maximum negotiated amounts. In addition, the MRF should further differentiate between inpatient/outpatient negotiated amounts, along with individual versus packaged negotiated amounts. The only acceptable file formats are XML, JSON, or CSV. The MRF should be posted on the hospital’s website and accessible to the public without restrictions.
- Consumer-Friendly Display of Shoppable Services: The shoppable services display can take the form of an electronic file (like the MRF) or an electronic estimator tool/software. Shoppable services are defined as services that can be scheduled in advance of performance. CMS requires hospitals to report a minimum of 300 services, which can be a combination of 70 services (CPTs and DRGs) assigned by CMS and 230 services of the hospital’s choosing. The reporting requirements include discounted cash amount, payor and plan-specific negotiated amounts, and minimum/maximum negotiated amounts.
To date, CMS has been lenient on its assignment of penalties for noncompliance with the price transparency rule. As of March 2023, only two hospitals had been fined for noncompliance; then April 2023 saw two more hospitals being fined along with updated penalty language. On April 26, 2023, CMS announced its commitment to ensuring quality and compliant reporting and indicated its plan is to increase price transparency audits from 40 per month to 200 per month.
If your hospital is determined to be noncompliant, you will receive dated correspondence from CMS; the date of the correspondence begins the countdown clock. You will have 45 days to provide a corrective action plan (CAP) and 90 days to show full compliance. If you are late with the 45-day CAP, your hospital will be automatically fined the civil monetary penalties.
Penalty amounts are calculated based on the organization’s size and the number of days of noncompliance as determined by CMS. Hospitals with up to 30 beds will pay $300 per day with a maximum of $109,500 annually and hospitals with more than 30 beds will pay $10 per bed per day with a maximum of $5,500 per day and a maximum of up to $2,007,500 annually.
If you have any questions or need assistance, please reach out to a professional at FORVIS or use the Contact Us form below.