Hospital Price Transparency Enforcement Updates
CMS is committed to ensuring that consumers have the information they need to make fully informed decisions regarding their health care. CMS expects hospitals to comply with hospital price transparency requirements and is enforcing these rules to ensure that people are easily able to learn what a hospital charges for items and services. This fact sheet outlines process updates CMS is making to increase compliance with the hospital price transparency requirements. CMS continues to explore additional ways to ensure that hospitals fully comply with the hospital price transparency requirements, including whether to propose additional changes through rulemaking.
Hospital Price Transparency Background
CMS’s hospital price transparency requirements are authorized by section 2718(e) of the Public Health Service Act, which requires each hospital operating in the United States to make its standard charges public. The Hospital Price Transparency regulation establishes enforceable guidelines by which hospitals must make public the standard charges they have established. The regulation defines several types of standard charges, including:
- Gross charges (as found in hospital chargemasters, which is the list of all individual items and services maintained by a hospital for which the hospital has established a charge, absent any discounts);
- Discounted cash prices (the charge that applies to an individual who pays cash or cash equivalent for a hospital item or service); and
- Charges negotiated between the hospital and third-party payers.
Hospitals are required to make these standard charges public in two ways:
- A single comprehensive machine-readable file with all standard charges established by the hospital for all the items and services it provides.
- A consumer-friendly display of standard charges for as many of the 70 CMS-specified shoppable services that are provided by the hospital, and as many additional hospital-selected shoppable services as is necessary for a combined total of at least 300 shoppable services. This requirement can be satisfied through the release of a shoppable services file or by offering a price estimator that generates a personalized out-of-pocket estimate that takes into account the individual’s insurance information.
Comprehensive Review Process
CMS has three main avenues for monitoring and assessing hospitals’ noncompliance:
- Evaluating complaints made by the public;
- CMS’s review of individuals' or entities' analysis of noncompliance; and
- Internal audits of hospitals’ websites.
CMS prioritizes hospitals for comprehensive reviews based on the degree to which the hospital appears to be out of compliance with the Hospital Price Transparency regulation. When initially evaluating complaints, if a hospital has alleged egregious violations, such as failure to publish any machine-readable file, that case is prioritized.
Under the current enforcement process, the case cycle consists first of a warning notice with instructions to correct the deficiencies within 90 days. If a hospital has not come into compliance after 90 days, CMS issues a corrective action plan (CAP) request with a 45-day deadline for hospitals to submit a CAP. Hospitals are then required to propose a completion date for CMS approval, which has ranged from 30 to 90 days on average. For hospitals that have not completed the necessary steps and come into compliance, CMS issues a civil monetary penalty (CMP). To date, the average time to complete a case cycle is 195 to 220 days.
Enforcement Actions to Date
CMS is leveraging automation to complete hospital reviews quickly, accurately, and consistently. By using automation to group complaints based on file types and hospital systems, CMS has increased the number of comprehensive reviews conducted from 30-40 per month to over 200 comprehensive reviews per month.
As of April 2023, CMS has issued more than 730 warning notices and 269 requests for CAPs. CMS has imposed CMPs on four hospitals for noncompliance, which are posted and made publicly available on the CMS website. Every other hospital that was reviewed through a comprehensive compliance review has corrected its deficiencies or is in the process of doing so, and CMS helps hospitals come into compliance by conducting extensive technical assistance with hospitals throughout the compliance process.
Updates to Enforcement Processes
As recently noted, CMS is engaged in continued efforts to ensure every hospital complies with the hospital price transparency requirements. As part of these efforts, CMS is updating our enforcement process, with respect to areas that do not require rulemaking, with the following changes:
- Requiring CAP completion deadlines. CMS will continue to require hospitals that are out of compliance with the hospital price transparency regulation to submit a CAP within 45 days from when CMS issues the CAP request. CMS will also now require hospitals to be in full compliance with the hospital price transparency regulation within 90 days from when CMS issues the CAP request, rather than allowing hospitals to propose a completion date for CMS approval which can vary. This change will standardize and streamline the timeframe and promote compliance at earlier dates.
- Imposing CMPs earlier and automatically. Currently, CMS does not impose automatic CMPs for failure to submit a requested CAP or failure to come into compliance within 90 days from when a CAP request is issued. CMS will now automatically impose a CMP on hospitals that fail to submit a CAP at the end of the 45-day CAP submission deadline. Before imposing the CMP, CMS will re-review the hospital's files to determine whether any of the violations cited in the CAP request continue to exist and, if violations are found, impose a CMP. For hospitals that submit a CAP by the 45-day CAP submission deadline but fail to comply with the terms of that CAP by the end of the 90-day deadline, CMS will re-review the hospital’s files to determine whether any of the violations cited in the CAP request continue to exist and, if so, impose an automatic CMP.
- Streamlining the compliance process. For hospitals that have not made any attempt to satisfy the requirements (i.e., those that have not posted any machine-readable file or shoppable services list/price estimator tool), CMS will no longer issue a warning notice to the hospital and will instead immediately request that the hospital submit a CAP. Currently, CMS does not issue CAP requests without first issuing a warning notice.
These enforcement updates will shorten the average time by which hospitals must come into compliance with the hospital price transparency requirements after a deficiency is identified to no more than 180 days, or 90 days for cases with no warning notice, and will complement future efforts. CMS is continuing to engage interested parties, including patients, consumer advocates, researchers and other experts, as well as hospitals, to obtain their feedback on the most useful and meaningful ways to display hospital standard charge information and exploring how to further drive standardized reporting of price transparency information.