Civil Financial Penalties for non-compliance with the Hospital Worth Transparency Rule have arrived

The Hospital Worth Transparency Rule (the “Rule”) turned enforceable as of January 1, 2021 and is designed to make it simpler for Individuals to match the prices of care earlier than going to the hospital by requiring hospitals to make sure details about costs publicly obtainable. Whereas enforcement has been gradual to take off, as of June 2022, two hospitals – Northside Hospital Atlanta and Northside Hospital Cherokee, each a part of the identical system in Georgia – now face $883,180 and $214,320, respectively, in civil financial penalties underneath the Rule.  

The Rule requires all hospitals (Medicare-enrolled establishments and non-Medicare enrolled establishments) to make public their customary prices for objects and providers offered by the hospital. The time period “customary prices” is outlined to incorporate every of the next:

1. Gross cost – The cost for a person merchandise or service that’s mirrored on a hospital’s chargemaster, absent any reductions
2. Discounted money worth –  The cost that applies to a person who pays money, or money equal, for a hospital merchandise or service
3. Payor-specific negotiated cost – The cost {that a} hospital has negotiated with a 3rd get together payor for an merchandise or service
4. De-identified minimal negotiated prices – The bottom cost {that a} hospital has negotiated with all third-party payors for an merchandise or service
5. De-identified most negotiated prices –  The best cost {that a} hospital has negotiated with all third-party payors for an merchandise or service

“Objects and providers” is broadly outlined to embody “all objects and providers, together with particular person objects and providers and repair packages, that may very well be offered by a hospital to a affected person in reference to an inpatient admission or an outpatient division go to for which the hospital has established a typical cost.” 

Below the rule, hospitals are required to make the usual prices for his or her objects and providers public in two methods (usually described):

1. By making a single digital “complete machine-readable file” publicly obtainable on-line in an simply accessible method, freed from cost, that features every kind of ordinary cost for all objects and providers offered by the hospital, up to date yearly, and
2. A “consumer-friendly” record of shoppable providers, together with 70 CMS-specified shoppable providers and 230 hospital-selected shoppable providers, written in plain language, simply accessible by the general public, and up to date yearly.

CMS can implement the Rule in numerous methods, together with by reviewing complaints and analyses of noncompliance made by entities or people on to CMS and/or by auditing hospitals’ web sites. If CMS determines a hospital is noncompliant with any of the necessities of the Rule, it might assess a financial penalty to such hospital. 

CMS issued a “Hospital Worth Transparency Discover of Imposition of a Civil Financial Penalty (CMP)” to each Northside Hospital Atlanta and Northside Hospital Cherokee (the “Notices”) for 5 alleged violations of the Rule: (1) failure to make customary prices public for every separate hospital location underneath a single hospital license; (2) failure to make public a machine-readable file with the record of all customary prices for all objects and providers offered on the hospital; (3) failure to make such machine readable file obtainable as one single file; (4) failure to observe CMS’ file naming conference; and (5) failure to make a consumer-friendly record of ordinary prices for “a restricted set of” shoppable providers publicly obtainable on-line. 

These Notices, nevertheless, weren’t the primary time these hospitals had heard from CMS on the matter of non-compliance, which is price noting for different hospitals not but in compliance with the Rule. In line with regulation, a number of alternatives have been offered to those hospitals to take corrective motion. Over a yr previous to the issuance of those Notices, CMS issued every hospital a warning discover with an “alternative to reply and supply supporting documentation to CMS concerning the cited violations.” Neither hospital responded. Between 4-6 months later, CMS accomplished a evaluate of every hospitals’ web site and famous continued non-compliance, after which level CMS issued a “Request for Corrective Motion Plan (CAP)” to every hospital. CMS then performed a technical help name with every hospital and offered one other alternative to submit a CAP (or revised CAP) earlier than imposing the CMPs for the above-described violations. Every hospital had 30 calendar days from the issuance of their discover to request a listening to earlier than an Administrative Legislation Choose and enchantment these CMP determinations.

Some hospitals till this level could have been weighing the prices of compliance with the Hospital Worth Transparency Rule. It’s now obvious, nevertheless, that non-compliance can include a hefty price ticket. Hospitals ought to take any communication from CMS concerning Hospital Worth Transparency violations severely and take steps to show a willingness to take corrective motion. 

Alma Carver and Nicole Jobe are members of Thompson Coburn’s Well being Legislation Observe Group.