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Pricing Transparency Evolves: Ensuring Hospital Compliance Amidst New Regulations
Blog Feature
Greg Kay

By: Greg Kay on August 1st, 2023

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Pricing Transparency Evolves: Ensuring Hospital Compliance Amidst New Regulations

CMS  |  CMS & Transparency

In July 2023, CMS proposed some major price transparency changes with the release of the 2024 OPPS rules. Most notably, the proposed rule changes move to standardize the formatting of the machine-readable files (MRF), increase data accessibility and greater accountability. This can lead to a significant impact on hospitals that are not completely compliant with existing regulations.

Even if you believe your organization is 100% compliant today, the proposed changes may expose your hospital to penalties. Let’s examine the proposed price transparency changes and highlight how PMMC is quickly moving to incorporate these changes to help our clients remain compliant.


When Will the Price Transparency Changes Take Effect?

The proposed price transparency requirements have not been approved but based on the recently released guidance and details, we anticipate the changes will be added to the existing rules. With that in mind, here are some key dates you need to be aware of: 

  • June 27, 2023 CMS published an updated Price Transparency FAQ 
  • July 06, 2023 CMS posted an updated MRF Sample Format and Data Dictionary 
  • July 13, 2023: OPPS proposed rules published and comment period begins 
  • Sept 11, 2023: Comment period ends 
  • October 2023: CMS will release final OPPS rules with approved price transparency modifications 
  • Jan 01, 2024: Effective date for price transparency changes  
  • Mar 01, 2024: CMS will begin enforcement of the new rules 

It is important to note that leading up to the proposed rules' release, CMS published an updated Price Transparency FAQ and a revised MRF format guidance document. The proposed rules focus on standardization and CMS has provided more specific expectations. The new requirements will involve more work and there is an expectation for greater accountability, but CMS is looking to find the right balance and has extended a two-month grace period for non-compliance measures being enforced. If you have doubts or concerns about your current level of compliance, you should immediately assess your current process against the new updated MSF Sample Format and Data Dictionary and incorporate meaningful changes now to reduce the risk of incurring future fines and penalties.

Why Does Your Organization Need to Prioritize Accountability?

With clear expectations comes greater accountability. CMS has proposed a requirement for a hospital staff member to sign off on a compliance statement to attest to the information's accuracy and completeness.

According to this proposed stipulation, the designated individual must be a member of the hospital’s executive team and be willing to certify that the organization is compliant to the best of their knowledge. The certification clause of the proposed price transparency changes will also create an additional sense of urgency across the organization. If these rule changes are approved, someone from your organization will have to put their integrity and reputation on the line to sign the certification form. While there’s no penalty for that person, the individual tasked with signing the certification will be especially committed to achieving compliance.

How Will CMS Communicate and Enforce Price Transparency Changes?

Under the current price transparency framework, CMS enforces its regulations through a series of progressive penalties. Initial violations have historically resulted in warning notices being issued along with a request for the hospital’s corrective action plan (CAP). 

Hospitals typically need to submit a CAPs within 45 days of the notice and have a completion date within 30 – 90 days for being compliant with the outlined regulations.  

As of April 2023, CMS has issued more than 730 warning notices and made 269 requests for CAPs. 

Under the proposed 2024 rules, there are no significant alterations to the existing enforcement structure. That said, CMS reiterated they can publicize enforcement actions against hospitals before civil monetary penalties are assessed. In other words, CMS can notify the public of a hospital’s non-compliance during preliminary enforcement action, even if the entity remedies the violations before incurring monetary fines.  

What are the current and/or proposed changed to the Civil Monetary Penalties (CMP)? 

CMS has the authority to levy monetary penalties if a hospital fails to obtain compliance within the specified period. Originally, the maximum potential penalty was capped at just over $100,000 but it was expanded in 2022. 

CMS has a maximum CMP of $300/day that applies to smaller hospitals with a bed count of 30 or fewer, a maximum CMP of $10/bed/day for hospitals with a bed count of 31 up to and including 550 beds, and a maximum CMP of $5,500/day for hospitals with greater than 550 beds.  

CMS’ decision to retain the current scaled penalties confirms the Administration’s commitment to enforcement and public access to pricing information. Noncompliance could result in a maximum total penalty amount of $2,007,500. 

What Were the Most Common ‘Deficiencies found by CMS?  

For the hospitals that received warning notices in CY2021, 70% had deficiencies with the MRF. The most common issues were:  

  • Failure to post a single MRF.  
  • Missing one or more of the five types of standard charges (gross, cash price, negotiated rates for all payers/plans, minimum and maximum amount).  
  • Including all five types of the standard charges but failing to clearly associate the payer specific negotiated charge with the name of the third-party payer and plan.  

For 2022 CMS found 70% of hospitals fully met the display criteria for machine-readable files, 27% only “partially” met the criteria, and 3% did not post any machine-readable files with the required information.

What has CMS proposed as it relates to readily accessing the MRFs?  

CMS is proposing two changes to make it easier to automate access and real-time centralization of the MRFs:   

  • Hospitals will place a ‘footer’ at the bottom of the hospital’s homepage to link to a webpage for the MRF; and  
  • Hospitals will include a .txt file that would identify the URL for the MRF and the webpage that has the file.

The goal of these changes will be to improve the automated accessibility to the hospital’s standard charge information and to streamline the ability for CMS to enforce the requirements.  

How is CMS Standardizing the MRF Format and Data Elements?  

Hospitals currently have flexibility in the form and format for displaying their standard charge information. The primary requirement was the data needed to be in a single file.

Based on input from the industry and users, CMS proposes hospital display the standard charge data using a CMS template now available on the CMS price transparency website and available for use today voluntarily. The CMS templates would follow a CSV “wide” format, a CSV “tall” format and a JSON schema.

CMS is also proposing hospitals encode the standard charge information and include:

  • General data elements such as hospital name, license number, location name(s), addresses, the file version, and the date of the most recent update to the standard charge information.  
  • Each of the five standard charge components. For payer-specific negotiated charges: the payer and plan name (as specified in the contract); the type of contracting method used to establish the standard charge; whether the standard charge indicated should be interpreted by the user as a dollar amount, or if the standard charge is based on a percentage or algorithm, and what percentage or algorithm determines the dollar amount for the item or service. If the standard charge for an item or service is expressed as a percentage or algorithm, the hospital would be required to indicate a consumer-friendly expected allowed amount in dollars for the item or service. 
  • A description of the item or service that corresponds to the standard charge established by the hospital, including a general description; whether the item or service is provided in connection with an inpatient admission or an outpatient department visit; and for drugs, the drug unit and type of measurement. 
  • Any codes used by the hospital for purposes of accounting or billing for the item or service, including modifier(s) and code type(s).        

What Else Is CMS Looking for Comment on?

CMS is also looking for feedback about the potential to align these with other existing pricing transparency regulations and requirements like good faith estimates.  

 Those current requirements for GFE being: 

  • Estimates must include an itemized list with specific details and expected charges for items and services related to a patient's care.
  • Estimates must be given in the way a patient prefers, either printed on paper or emailed. 
  • Estimates must be in a format that’s accessible to the patient, including large print, braille, or audio. 

How Should Hospitals Manage These Changes? 

Once the proposed requirements go into effect in 2024, it is possible that achieving and maintaining compliance could become even more difficult.  

Fortunately, hospitals that choose knowledgeable compliance partners like PMMC can avoid many of these challenges. PMMC provides high-level support, compliant documents, and other resources to help our clients adapt to changing CMS requirements.  

How Can PMMC Support Your Compliance Needs?  

While the new requirements are just proposals, many of the provisions will likely integrated into the current framework. The new detailed guidance for the standard charge information and especially the expanded negotiated charge requirements will increase the amount of time and effort to gather and validate the information.  

The rule changes will add another layer of complexity to your organization’s compliance challenges. However, you can support your ongoing compliance with the price transparency rule through a partnership with PMMC. 

PMMC closely adheres to CMS specifications for machine-readable files, which means all of the pricing documents generated by our team will be compliant. PMMC’s estimator tool can also help you provide patients with shoppable services, transparent pricing data, which is an additional requirement under the CMS rule. 

If you would like to learn more about how PMMC can support your compliance, schedule a consultation today. 

About Greg Kay

Greg has managed and consulted in healthcare for 28 years. He has been with PMMC for the past 20 years and prior to that was the VP of Sales for PCA (Beverly Enterprises’ pharmacy division). Greg has experience in multisite operations management, managed care negotiation from a healthcare provider’s vantage point, and product development/implementation. Greg is a University of South Carolina finance and marketing graduate. Greg was recognized in 2012 as a Business Leader Top 50 Entrepreneur.