The CMS Price Transparency Rule

By Richard Walker

In July 2020, CMS unveiled the Outpatient Prospective Payment System proposed rule for 2022. It addressed the Price Transparency rule which became effective on January 1, 2021 and has proposed sanctions for hospitals that remain non-compliant with the federal mandate. The rule requires hospitals to post 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 on their websites.

CMS will consider a hospital as having met the requirement of posting a consumer-friendly list of standard charges if the hospital has an online price estimator tool that provides out-of-pocket cost estimates in real time.

Most hospitals are still not fully compliant with the federal mandate. Some have opted to pay the maximum $300 per day noncompliance fee rather than face the potential costs of price disclosure. Some have made attempts to comply but are not in full compliance. Several hospitals, particularly critical access providers, are not in compliance because of the tremendous amount of resource and time constraints required to implement the rule for their organizations.

Ramifications for Non-Compliance

For hospitals that violate the rule, CMS will request a corrective action plan. If a hospital remains non-compliant after submitting an action plan, further penalties will be assessed which may include the assessment of civil monetary penalty of up to $300 per day. They may also publicize the penalty on a CMS website. CMS has said the penalty and publicization is likely to occur if the hospital fails to respond to its request to submit a corrective action plan. To boost compliance, CMS proposed increasing the minimum fine for price transparency violations to up to $2m per year.

Hospitals with more than 30 beds in violation of the rule would pay $10 per day for each bed, up to $5,500 per day. Hospitals with 30 beds or fewer would continue to pay up to $300 per day. This would make the annual penalty at least $109,500, or as high as $2M a year for large hospitals that fail to make prices public.

BDO Solution

BDO has the technology, expertise, and resources to help your organization obtain compliance status as quickly as possible to avoid civil penalties and public humiliation. We offer a price transparency tool that allows hospitals to easily list all their negotiated prices and bundled services on their website. This also includes the ability to customize branding for a seamless look on hospital websites. We can help by you:

• Converting your data into a machine-readable form.

• Assisting in identifying CMS-mandated services and hospital specific shoppable services.

• Posting all standard negotiated charges for each service including gross charges, payer specific negotiated charges and discounted prices.