News: CMS final rule on hospital price transparency

CMS’ recently released final rule on hospital price transparency which allows the agency to impose civil monetary penalties for those that fail to comply, HealthLeaders Media reported. Some proponents of the policy, however, worry these relatively minor fines may be an insufficient enforcement tool.

The final rule mandates hospitals to publicly disclose the rates they negotiate with insurers. A hospital that fails to comply with the final rule, which is slated to take effect in 2021, faces a maximum fine of $300 per day, even if the hospital is violating multiple requirements of the policy, according to the final rule.

If a hospital were to be assessed the maximum $300 penalty for an entire year, it would owe the government $109,500 for failing to comply with this final rule during that year, reported HealthLeaders Media.

Proponents’ concern is that hospitals may see $100,000 as a small portion of their total revenue and might view noncompliance as a new business expense rather than incentive to comply with transparency requirements.

For its part, CMS acknowledged in the final rule that stakeholders had expressed concerns about the penalty amount. While some comments on the proposed rule called for higher penalties, others pushed for lower penalties or no penalties at all.

Paying more than $100,000 in fines might be chump change for large hospitals, but such penalties could prove overly burdensome for small hospitals, especially critical access hospitals, some commenters argued, according to the CMS summary of the comments, which noted that some called for a sliding fee scale.

Officials rejected calls for a sliding fee but said they will continue to consider the topic and may revisit a scaling methodology in future rulemaking.

Editor’s note: This article originally appeared in HealthLeaders Media. To read more about price transparency, click here.