Hospital Price Transparency: CMS Steps up Enforcement
By Richard Riter
Director, Health Care Practice
Moss Adams
Original Publish Date: May 9th, 2023
After over two years of providers being slow to comply with Centers for Medicare & Medicaid Services (CMS) pricing transparency requirements, CMS has signaled that it’ll be getting serious about enforcement and issued a fact sheet on April 26, 2023, outlining a new enforcement approach.
Some Enforcement Details
Instead of allowing an initial 90-day period for providers to comply before requesting a corrective action plan (CAP), providers who haven’t posted a machine-readable file and shoppable-services list or price-estimator tool will no longer receive a warning notice. Instead, CMS will immediately request the provider submit a CAP. Providers will also be limited to 90 days in their CAP to come into compliance.
CMS is also ramping up the volume of their reviews from 30–40 per month to over 200. They’ll begin automatically imposing a civil monetary penalty (CMP) on providers who either:
- Fail to submit a CAP within the 45-day period
- Remain out of compliance 90 days after the initiation of the CAP
Implications for Providers
Many providers have struggled to comply with these regulations due to market sensitivities, ambiguous language, and competing priorities. Providers believing they’re in compliance could still be cited by CMS auditors over a file being incomplete. It could even be something as simple as a file name.
CMS is also sending hard-copy notifications, typically addressed to the hospital and generally to the attention of the hospital CEO. In many cases, these letters aren’t being routed to teams equipped to respond. With these changes, providers have a very high risk of a civil monetary penalty being imposed and publicized on the CMS website without even knowing that CMS has identified an issue.
Background
As a rare area of bipartisan consensus, pricing transparency appears to be here to stay. It’s likely to evolve to be more user friendly and allow for real-time comparisons among providers. Combined with the No Surprises Act, it’ll fundamentally redefine the relationship between providers and payers.
As payer and provider relationships recalibrate to this new environment, health care leaders have an opportunity to help patients make informed health care decisions while safeguarding their organization’s financial future.
What Providers Can Do
To reduce compliance risks and thrive in the post-transparency world, providers should:
- Post. If you haven’t posted your required information yet, work either internally or with a vendor to create files that comply with CMS requirements, per their website.
- Review. Identify a team with experience in this CMS approach to interpret requirements and perform a thorough review.
- Analyze. Identify a relevant peer group and compare rates. This can be complex since there’s no standard posting format. Assistance may be required.
- Strategize. Determine target reimbursement rates by payer and service line.
- System Approach. While only hospitals are required to comply with these regulations, health system leaders should incorporate all provider types into this analysis.
- Deploy. Begin incorporating peer data and targets into payer contracting process and future price transparency postings.
We’re Here to Help
For help complying with the price transparency regulations and preparing to thrive in the post-transparency world, contact Richard Riter at Moss Adams.
About the author:
Richard Riter has worked in health care financial management since 1996. He leads the Revenue Cycle Consulting Team at Moss Adams. Most recently, Richard was the vice president of reimbursement for Providence, a health system with 51 hospitals and $26 billion in revenue. His previous experience also includes working in the Consulting Practice of a Big Four firm and in revenue and population health functions for MassGeneral Brigham.