The barriers to hospital price transparency compliance

Although CMS' price transparency rule went into effect in January 2021, hospitals have been slow to comply with the regulation. 

The CMS final rule aims to make hospital pricing information readily available to patients to compare costs and make more informed healthcare decisions. To aid with this, hospitals in the U.S. are required to post both a machine-readable file with the negotiated rates for all items and services and display the prices of 300 shoppable services in a consumer-friendly format.

After finding that a majority of hospitals weren't fully complying with the rule, CMS boosted the monetary penalty for noncompliance in November 2021. Under the updated rule, hospitals with 30 beds or fewer would continue to pay up to $300 per day of noncompliance, but hospitals with more than 30 beds will pay $10 per bed each day. The maximum penalty will be capped at $5,500 per day. A full year of noncompliance with the regulation would result in a maximum penalty of $2 million per hospital. 

But in a survey of 1,000 hospitals released in February, just 14.3 percent were compliant with the federal price transparency rule. 

So why aren't hospitals complying?

Despite raising the penalties for noncompliance, no hospitals have received penalties yet, CMS told Becker's in early April. CMS said it sent about 345 warning notices to hospitals, and the agency has made 136 corrective action plan requests to hospitals. Hospitals are asked for corrective action plans when they receive warning notices but haven't made corrections. While warning letters may sway hospitals to comply, until CMS leverages monetary penalties, hospital compliance will likely remain low across the country.

Additionally, noncompliant hospitals have also said they were not fully complying due to resource constraints. Specifically, revenue cycle leaders told KLAS in April that transparency compliance requires significant investment in software and outside resources. As hospitals struggle financially from the COVID-19 pandemic, hospitals may put compliance on the backburner.

Revenue cycle leaders cited several barriers to compliance, including the confusing and complex regulation and difficulty with the software used to publish machine-readable files. 

Read more about the KLAS report here

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