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How hospitals can get ahead of the coming CMS price transparency enforcement wave

September 22, 2021
From the November 2021 issue of HealthCare Business News magazine

A slow start to CMS enforcement
CMS has authority to monitor hospital compliance with the price transparency requirements, including by evaluating complaints made by individuals or entities to CMS, reviewing an individual or entity’s analysis of a hospital’s noncompliance, or conducting audits of hospital websites. If CMS concludes that a hospital is noncompliant with one or more of the price transparency requirements, it may take any of the following steps, generally but not necessarily in this order: issue a written warning to the hospital of the specific violation(s), request a corrective action plan if noncompliance constitutes a material violation of the regulations, or impose a civil monetary penalty (“CMP”) of up to $300 per day (updated annually for inflation).

Even before the D.C. Circuit affirmed the viability of the regulations, CMS issued a public statement underscoring its intent vigorously to enforce the transparency rules. On December 18, 2020, CMS announced that it “plans to audit a sample of hospitals for compliance starting in January” 2021.

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But changes in administrations often yield a temporary lull in enforcement as new political leadership is onboarded and triages time-sensitive matters they would like to take in a new policy direction. Areas in which a new administration agrees with the prior one—as is largely the case within HHS on price transparency—can fall by the wayside. As a result, many in the industry were unsurprised when CMS’s announcement was not accompanied by any immediate enforcement actions. Although CMS did follow through on its threat to initiate at least some audits immediately in early 2021, it confirmed this summer that its response was limited to issuing warning letters. Pandemic burdens on providers may also have contributed to CMS’s decision not to impose harsh penalties for violations.

CMS appears ready to make enforcement a priority
There are signs that CMS’s willingness to tolerate hospital noncompliance may soon be coming to a close. President Biden’s wide-ranging July 9, 2021 executive order on “promoting competition in the American economy” specifically directed the Secretary of Health and Human Services (“HHS”) to “support existing price transparency initiatives for hospitals….” The Biden administration’s endorsement of this Trump-era regulation underscores how price transparency has become a popular, bipartisan issue. This regulation also dovetails with similar transparency requirements in a payor version of the Hospital Price Transparency regulations—portions of which go into effect on January 1, 2022—as well as ancillary transparency requirements imposed by Congress in the No Surprises Act, which is a federal surprise medical billing law passed in late December 2020 that will also largely go into effect on January 1, 2022.

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