CMS Imposes Civil Penalties for Price Transparency Violations
After months of sending out warnings, the Centers for Medicare & Medicaid Services (CMS) has imposed its first civil monetary penalties on hospitals for failing to comply with price transparency notification requirements. Georgia-based Northside Hospital Cherokee was fined $214,320, and Northside Hospital Atlanta was fined $883,180.
Both hospitals were deemed noncompliant with the price transparency requirements for hospitals to make standard charges public under 45 C.F.R. Part 180. CMS said they failed to make public a machine-readable file containing a list of all standard charges for all items and services.
Hospital price transparency helps people know what a hospital charges for the items and services they provide, an important factor given that healthcare costs can cause significant financial burdens for consumers. CMS has stated that although enforcement activities are necessary to drive compliance with price transparency, CMS is also committed to working with hospitals to help them meet those requirements.
The regulation 45 CFR 180.50(a)(2) also requires each hospital location operating under a single hospital license (or approval) that has a different set of standard charges than the other location(s) operating under the same hospital license (or approval) must separately make public the standard charges applicable to that location.
In June 7 letters to the hospitals’ CEOs, CMS stated that they were provided the opportunity to respond and provide supporting documentation to CMS regarding cited violations and did not.
In the case of Northside Hospital Cherokee, CMS said it first reached out to the hospital about noncompliance in September 2021 and requested corrective action. It conducted a technical assistance call on Jan. 11, 2022, during which the designated representative for the hospital confirmed that previous violations had not been corrected and, in fact, the hospital system had intentionally removed all previously posted pricing files.
“CMS then reiterated that your hospital is required to post a machine-readable file and a shoppable services file (or price estimator tool) that meet price transparency requirements for hospitals to make standard charge information public in accordance with 45 C.F.R. § 180.40–180.60. CMS issued a recap of the technical assistance call via email on January 24, 2022, requesting that Northside Hospital Cherokee submit a Corrective Action Plan (CAP) within 10 calendar days from the date of the e-mail,” the letter states. “Your hospital did not submit a CAP and continues to fail to meet CAP requirements as described in 45 C.F.R. §180.80. Moreover, your hospital continues to be out of compliance with 45 C.F.R. §180.40 – 180.60.”
The formula for penalties is $300 per day of noncompliance plus $10 per bed per day for hospitals with a bed count greater than 30 but not more than 550.
For hospitals that remain noncompliant, CMS may issue subsequent notices imposing additional penalties for continuing violations.
