by Price Transparency Update Coming in 2022
When it comes to healthcare, the government typically has two options for incentivizing specific actions. They can either provide a carrot, or a stick. In the case of price transparency, the government went with the stick approach, with a penalty of $300 a day for noncompliant hospitals beginning as of 01/01/2021. However, they will be bringing out a bigger stick shortly, with an increase in penalties slated for 2022 – more on that later.
To better understand the response to this maximum penalty stick of $109,500 a year, a study randomly sampled 500 hospitals and found the following:
- 80% of hospitals did not publish payer-specific negotiated prices.
- 52% of hospitals did not publish any negotiated prices.
- 40% of hospitals published discounted cash prices.
- 19% of hospitals published 300 shoppable services in a consumer-friendly format, but due to some services missing data, these were also deemed noncompliant.
- 76% of hospitals posted a price estimator tool on their website. (1)
There are two basic provisions of the new price transparency rule from CMS. It states that “Most institutions in the United States that are licensed as hospitals or otherwise approved as meeting applicable licensing requirements must post their standard charges prominently on a publicly available website.”
The first provision requires that your prices be posted on your website in what’s known as a “Machine Readable File”. Machine readable files are digital files that a computer can easily read such as comma-separated values (CSV), Javascript Object Notation (JSON), or Extensible Markup Language (XML). Machine-readable format does not include portable document format (PDF).
The CMS website says that this must be a single, digital file “containing the following standard charges for all items and services provided by the hospital: gross charges, discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges.”
The second provision states that hospitals must post 300 prices of shoppable services in a consumer-friendly display (or as many as the hospital provides if less than 300). A shoppable service is a procedure or service that a patient can schedule in advance. CMS explains that these posted prices “Must contain plain language descriptions of the services and group them with ancillary services, and provide the discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges.” Or, in lieu of a shoppable list, hospitals can post a cost estimator for patient’s to lookup charges on their own.
Due to the lackluster response and compliance with this rule throughout 2021, CMS has decided to change up their tactics a little. Now, they’re bringing a bigger stick.
On November 2, 2021, the CMS newsroom published the details of the CMS OPPS/ASC Final Rule, which includes an increased penalty for not adhering to the price transparency rules above.
The updated rule states that on January 1, 2022, CMS is setting a minimum financial penalty of $300 per day which applies to smaller hospitals with 30 beds or less. In addition, CMS is implementing a penalty of $10 per bed per day for hospitals with more than 30 beds, which is not to exceed a maximum daily dollar amount of $5,500. (2)
If hospitals choose to be noncompliant for an entire year, the lowest total penalty would be $109,500 for hospitals with 30 beds or less, and the highest total penalty would be $2,007,500 for hospitals with 550 beds or more. (2)
For more information on the new CMS price transparency rule, you can visit the CMS website here.
If this all comes across as complex and overwhelming, know that you’re not alone. That’s why hospitals around the country are partnering with Wixcorp to provide a cost estimator for their patients.
Our solution makes you 100% compliant with this CMS rule, allowing you to completely avoid their bigger stick. To learn more, you can visit our website at https://www.wixcorp.com/Solutions/CostEstimator.aspx.
We look forward to making price transparency something you and your patients get excited about.
To your success,
From the team at Wixcorp
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