On January 1, 2021, the Federal Hospital Price Transparency Rule went into effect requiring hospitals to disclose certain pricing information. Specifically, the Rule requires hospitals to provide pricing information:
- in a “single machine-readable digital file containing the following standard charges for all items and services provided by the hospital: gross charges, discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges” and
- display “at least 300 ‘shoppable services’ (or as many as the hospital provides if less than 300) that a health care consumer can schedule in advance. Must contain plain language descriptions of the services and group them with ancillary services, and provide the discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges.”
In July 2021, PatientRightsAdvocate.org, “a nonprofit, non-partisan organization that provides a voice for consumers — patients, employees, employers, and taxpayers — to usher in healthcare price transparency” conducted a review of 500 randomly selected hospitals to check for compliance with the Rule.,  Here is what it found:
- Only 28 of the 500 hospitals sampled (5.6%) were in complete compliance with the Rule
- 471 hospitals (94.4%) did not post a complete machine-readable file of standard charges
- The most significant area of non-compliance was a failure to post all payer-specific and plan-specific negotiated rates
- 258 hospitals (51.6%) did not post any payer negotiated rates
- 96 hospitals (19.2%) displayed the 300 shoppable services in a consumer-friendly manner
CMS began issuing warnings to non-compliant hospitals in April and, as of mid-July, had sent out 165 warnings. Non-complaint hospitals currently face penalties of up to $300 per day. However, CMS has not imposed a monetary penalty on any hospital to date and has announced that it will be holding off on penalizing hospitals to allow them time to adjust to the Rule.
At the same time CMS is holding back on penalizing hospitals, it has proposed a new rule that would increase the penalties. The newly proposed rule would penalize non-compliant hospitals as follows:
- $300/day for hospitals with 30 beds or less;
- $310-$5,500/day for hospitals with 31-550 beds; and
- $5,500/day for hospitals with more than 550 beds.
Comments on the proposed rule are due by September 17, 2021 and are scheduled to go into effect on January 1, 2022.
Perhaps a stiffer penalty will increase compliance. However, even with the increased penalties, hospitals will likely calculate the cost of the penalty compared to the value of concealing the pricing information. $5,500/day or $2,007,500/year is nothing compared to the average net patient revenue of $334.5 million for U.S. hospitals (more than 50 of which have net patient revenues exceeding $1.6 billion).
Will the threat of penalties prompt compliance? Only time will tell, but simple math suggests it is unlikely.
 Semi-Annual Hospital Price Transparency Compliance Report, July 2021, PatientsRightsAdvocate.org.
Federal Register, Vol. 86, No. 147.