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Published 09 July 2021

CMS Issues Price Transparency Warning Letters

It has been seven months since the 2021 CMS price transparency mandate went into effect, and many hospitals are participating in selective compliance.

It has been seven months since the 2021 CMS price transparency mandate went into effect, and many hospitals are participating in selective compliance. Between waiting to see if the rule will be overturned or enforced, Hospitals have taken a wait and see approach. That is all changing rapidly as CMS heats up with warning letters for non-compliance with the federal rule for price transparency.

Click here to view an example letter.

In April, the Centers for Medicare and Medicaid Services (CMS) confirmed they are sending warning letters to hospitals for non-compliance. This is the first of three steps in their enforcement: 1) written warning: 2) corrective action plan; and 3) civil monetary penalty.

The Rule requires hospitals to publish two lists of prices:

  • A comprehensive, “machine-readable” file of various charges for all items and services, including plan-specific negotiated rates.
  • A consumer-friendly website of prices for a set of 300 “shoppable” services.

The penalties for non-compliance are clear in the final rule, but until now it has been akin to jaywalking – hospitals waited and challenged CMS to enforce. Enforcement is now in full effect and warning letters are out. With only 90 days to implement and a corrective action plan on the horizon, hospitals are scrambling to avoid the costly administrative burden of establishibng a price transparency task force and solution to pair with the $300/day civil monetary penalty.

Most concerning for many hospitals, both lists must include plan-level, payer-specific negotiated charges which are typically kept confidential by hospitals and payers alike. The American Hospital Association and other hospital groups unsuccessfully challenged the Rule in court in 2020.
Click here to learn more about how Hospitals are using ClaraPrice

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