Patient Estimates | CMS | Price Transparency
The Centers for Medicare & Medicaid Services’ (CMS’s) initial price transparency rule went into effect on January 1, 2021. While January 1st, 2024, marks the three-year anniversary of this sweeping regulation, the rule is still evolving, and compliance is proving to be an ongoing challenge for many organizations.
If your organization hasn’t yet achieved full compliance, fines are avoidable. However, you can mitigate the scope and severity of fines by prioritizing key updates to your pricing strategy.
CMS regulators will be evaluating your organization to determine whether it has made a good-faith effort to achieve price transparency. They will also be evaluating your website to ensure it has the appropriate text file and footer link.
Join us as we further explore these requirements, the fining process, and what you can do to protect your organization’s revenue in 2024. We’ll also highlight what changes go into force in 2024, what key deadlines to look out for, and what they mean for you.
Understanding the Fines Process
The fines process is CMS’s primary means of enforcing the transparency rule and promoting compliance at scale. Typically, an auditor or other party will issue a written communication of issues.
Then, CMS will conduct a review and impose a civil monetary penalty based on the hospital’s size and annual revenue. The hospital can pay the penalty or request a hearing.
While CMS was lenient on penalties during year one, the organization has been much more stringent since the start of 2022. The mean penalty amount for 2021 was $110,000, but it jumped to $511,000 the following year. Some common issues that may result in a fine include failing to post machine-readable files (MRFs) or shoppable services field, updating your files annually, and including all requisite data.
In early 2021, only 27% of organizations were compliant. One year later, that figure jumped to 70%, which corresponds to the increase in mean penalty amounts.
While 2023 data is still being compiled and several enforcement actions remain under review, CMS appears to be continuing this trend of swift and harsh penalties. Among the 2023 enforcement penalties that are under review is a $979,000 fine levied against a Florida based hospital, which would be one of the highest penalties to date if upheld.
The CMS has yet to issue the maximum penalty of $2 million. While the maximum fine threshold is not changing in 2024, penalty amounts have been trending upward, which is a major concern if your organization isn’t compliant. CMS is also bringing penalties faster and publicizing its enforcement actions, which magnifies the impacts of a violation.
Late Adopters: Minimizing Excessive Fines
If your organization is already out of compliance, there’s a good chance that you will incur at least some penalties in 2024. However, “good-faith efforts” are a factor that CMS considers when levying penalties and determining fine amounts. Therefore, exhibiting diligence in rectifying your compliance issues can help you minimize excessive fines.
First, review all protocols and designate a team member to respond to CMS inquiries and attest to data accuracy. Remember that CMS can require your organization to submit certifications for the accuracy and completeness of your data. This extends beyond a website audit. CMS will review charges data and uncover anything that violates the price transparency rule.
Second, don’t forget to connect with your hospital-employed providers. They fall under the umbrella of the price transparency rule. If they fail to comply, the liability could be shifted to your hospital.
Third, ensure that the team responsible for updating your hospital’s website is well-informed and actively involved in the compliance process. Compliance is a team effort, and your website management personnel must be kept in the loop.
If you have a price transparency provider, use this resource to assist you in making sure your documents are up to date as soon as possible. If not, consider finding such a partner, as they can alleviate the burden on your internal team in this race toward compliance.
What You Need to Do Differently in 2024
The 2024 updates require a shift from reliance on historical data. Now, you need to focus on current, accurate, and complete data. Posting data based on past allowed amounts is not compliant.
CMS’s heightened focus on comprehensive data means your organization must ensure that its information, including all locations and providers, is thoroughly updated and accurate. Good faith efforts to make these updates are mandatory, and compliance must extend to the entire hospital system.
3 Key Updates to Minimize Fines
As of January 1st, 2024, your organization is required to take three steps to maintain compliance with CMS’s price transparency rule:
- Make a good-faith effort to facilitate price transparency.
- Update your website with the CMS-mandated text file.
- Update your homepage with a footer link to the price transparency content.
Additionally, talk with your price transparency provider to ensure that all information is accurate and correct across the entire hospital system. You should also be prepared to provide CMS with a statement of accuracy so you can avoid compounding fines.
Preparing for Q3 & Q4 of 2024
The final phase of the price transparency rule goes into force on July 1st, 2024. CMS is adding 15 new data elements and format requirements for your MRFs that must be in place by that deadline.
If you are already implementing major changes to your compliance strategy, go ahead and roll out the new data elements, too. While CMS isn’t currently issuing fines for lacking those requirements on your digital files, they will start doing so after July 1st, and you’ll need to be ready.
The Price Transparency Rule Is Here to Stay — Are You Prepared?
Navigating the CMS price transparency updates for January 2024 requires a proactive approach focused on the accuracy and completeness of pricing data. By understanding these changes and what’s at stake for non-compliance, you can mobilize your team and minimize the severity and scope of penalties.
Three years after the price transparency rule went into effect, one thing has become clear: CMS has no intention of showing leniency. Therefore, you must accelerate your compliance efforts to protect revenue.