4 Takeaways From the First Days of the CMS Price Transparency Rule

Becky Greenfield, a partner with Wolfe Pincavage, provides an early temperature check on hospital compliance with CMS' price transparency mandate for hospitals.

On January 1, CMS' controversial price transparency mandate for hospitals went into effect, but the passing of that date is only the beginning of how organizations will have to deal with the rule.

Right up until the end of December, hospitals tried unsuccessfully to get the rule delayed or invalidated. But just a few days before January 1, a judge threw out the American Hospital Association's appeal of an earlier court decision which upheld the mandate, and pleas to delay the rule because of the COVID-19 pandemic have gone unheeded.

Not only did CMS not grant hospitals a delay, but the agency also announced in late December that it would be auditing a sample of hospitals for compliance starting this month, and that's in addition to investigating complaints of noncompliance.

On January 7, HealthLeaders Revenue Cycle Podcast spoke with Becky Greenfield, partner with Wolfe Pincavage, a Miami law firm specializing in healthcare, insurance coverage, and business law, for an early temperature check on hospital compliance and her thoughts about what's next.

She said so far, none of the hospitals she's investigated were fully compliant with the rule.

"It's a massive undertaking. I think hospitals, in good faith—at least the ones that I've spoken to—are trying to achieve compliance and I think that they will get there," she said. "But, as of today, it is not achieved."

Here are four takeaways that Greenfield mentions about the first days of the CMS price transparency rule. Listen to the full episode here. 

1. Compliance is all over the map

Although many hospitals have spent "significant resources trying to be compliant on January 1," Greenfield conducted a brief, informal audit of a sample of clients and found varying levels of compliance.

"I did not see one that was compliant 100% with the rule, as of today," she said.

Some of the hospitals she audited hadn't posted anything, while others only had their price estimator tool available. Some had what looked like a price estimator tool that didn't generate an estimate and instead told users to call a phone number for more information.

"It looks like they're building the tool but perhaps the data hasn't been fully uploaded and it's not really working yet," she said.

Still others have posted a machine-readable file and not the 300 shoppable services, which surprised Greenfield because many hospitals voiced their intention to have the shoppable services ready on day one and the machine-readable file later, if at all.

Greenfield noted that it's possible that the hospitals had posted the information, but she couldn't find it. However, that would also be "notable," since the information must be easily accessible.

"That would also not be compliant with the rule," she said.

2. Enforcement with an edge?

In late December, a CMS enforcement announcement said the agency would be auditing a sample of hospitals for compliance, starting this month.

According to Greenfield, that's a disappointing departure from the impression that CMS gave in the final rule.

"When CMS talked about audits and compliance in the final rule, they made it seem that, yes, they would have the right to conduct their own audits, but they would really be looking for substantial noncompliance, and they would be relying on consumer complaints as the basis," she said.

Even more important than the audits, though, is how CMS said it would assess penalties, Greenfield said. The final rule outlined a three-step plan for dealing with noncompliance:

1. Provide a written warning notice to the hospital of the specific violation(s)
    
2. Request a Corrective Action Plan (CAP) if noncompliance constitutes a material violation of one or more requirements
    
3. Impose a civil monetary penalty not in excess of $300 per day and publicize the penalty on a CMS website if the hospital fails to respond to the request to submit a CAP or comply with the requirements of a CAP
    

Greenfield said that the final rule implied that hospitals would have a chance to comply and be penalized if they didn't.

"Only at that point would CMS impose this $300 penalty," she said. But "that's not the feeling that I got from the CMS enforcement announcement."

Instead, the enforcement announcement stated that CMS "may take any of the following actions, which generally, but not necessarily, will occur" in that order.

"To me, this is the most concerning part of that notice," she said. "I was pretty disappointed especially … in light of COVID. CMS took an entirely differently kind of approach."

Some hospitals that are still working toward compliance have disclosures on their websites saying so, sometimes even disclosing the vendor they were working with to do so.

It's a move Greenfield recommends.

"That was something that I thought showed good faith: That they acknowledge there are requirements they haven't met, but that they're working toward achieving those," she said. "In my mind, it would be a smart move to tell CMS, 'If you do audit us, we know you're looking, we know what we're required to do. We're not trying to materially not comply with your rule. We've got a lot going on, contact us for more information.' That seems like a good idea to me."

3. There are still unanswered questions

Although the mandate has gone into effect, there are still unanswered questions, namely around determining which physicians CMS considers "employed" and, therefore, subject to inclusion in the mandate.

"I think that probably is the biggest unanswered question, and the burden could be exponentially increased if some of these hospitals have to include groups that they initially believed were non-employed but CMS says they are, in fact, employed," she said.

Although CMS gave hospitals discretion in this area, with the understanding that hospital organizational structures vary, "we don't know if further guidance will explain what CMS actually wants."

4. The details could change, but price transparency is here to stay

Greenfield thinks that hospitals will continue to move toward compliance with the rule in the coming months, perhaps needing to tweak some of their initial disclosures, either in response to additional CMS guidance or in watching what happens with audits and CAPs.

She also hopes that the Biden administration will grant hospitals leeway in enforcement and eliminate the machine-readable file from the requirement since she thinks it's "useless from a consumer perspective, which is the point of all this."

"I'm hopeful that the Biden administration will acknowledge that hospitals have it pretty rough right now, and they need some extra time and cooperation from CMS," she said. "Especially those hospitals that really do intend to comply and just need extra time."

However, even if elements of the rule are clarified or relaxed, hospitals should acknowledge that price transparency is here to stay.

"Price transparency isn't going anywhere," she said. "I think at this point we have to … keep moving toward compliance with this rule."