The OIG brings teeth to hospital price transparency

When it comes to hospital price transparency, CMS has thus far been ‘all bark and no bite.’ The agency mandated hospitals to make their prices readily available to consumers as of January 1, 2021. However, it hasn’t done a whole lot in the way of enforcing the rule, with the exception of sending warning letters to various hospitals that haven’t yet complied. To date, CMS has only issued two civil monetary penalties (CMP).

However, all of this may soon change. In fact, it probably will change. Why? The OIG recently announced it would put pressure on the agency to monitor and enforce the hospital price transparency rule. More specifically, the OIG wants to see whether CMS is statistically sampling hospitals, identifying instances of noncompliance, and imposing consequences when necessary. Starting in fiscal year 2023, you can bet that CMS will start cracking down harder on healthcare organizations. This means more audits, more investigations, more CMPs, and more pressure in general on hospitals to comply.

What are the penalties?

In its CY 2022 hospital OPPS final rule, CMS set a minimum CMP of $300 per day for smaller hospitals with a bend count of 30 or fewer and a CMP of $10 per bed per day for hospitals with a bed counter greater than 30 not to exceed $5,500 per day. For a full calendar year of noncompliance, hospitals could see a minimum of $109,500 and a maximum of $2,007,500.

How many hospitals currently comply?

In July 2021, PatientRightsAdvocate.org reviewed a random sample of 500 hospitals and found that only 5.6% were compliant. The PatientRightsAdvocate.org report came one week after President Biden issued an executive order enforcing the rule. An updated report published in February 2022 wasn’t much more promising. Only 14.3% of hospitals were found to comply. That percentage increased slightly to 16%, according to an August 2022 update.

Many consumers continue to remain ‘in the dark’ about the rule and their rights to ask about prices. A recent Kaiser Family Foundation tracking poll found that only nine percent of adults nationwide are aware that hospitals must disclose this information online.

How can hospitals prepare?

If your healthcare organization hasn’t already complied with the hospital price transparency rule, now is the time to do it. Focus on posting a machine-readable file of standard charges and a consumer-friendly display of at least 300 shoppable services. Also refer to this FAQ document for more information about general provisions and public disclosure requirements. As always, Rivet Health Law can also help you navigate the rule to ensure compliance. Contact us for more information.