Hospital Price Transparency Penalty Increased to $2MM

Published on July 19, 2021

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Hospital Price Transparency Penalty Increased to $2MM
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On Monday, July 19, 2021, The Biden administration proposed a major penalty increase for Hospitals that are non-compliant with the CMS Price Transparency rule requiring Hospitals to make their prices public in both consumer-friendly and machine-readable file formats.

From the Wall Street Journal:

The proposal comes after many hospitals failed to publish their prices as required by federal rules that took effect this year, undercutting policy makers’ goal of boosting competition and choice through transparent pricing.

In the proposed rule, CMS has outlined the establishment of a scaling factor (such as bed count or hospital revenue) to increase the penalty in a manner uniquely tailored to the noncompliant hospital. After considering these two general approaches, CMS has proposed to use a scaling factor to establish the Civil Monetary Penalty amount for a noncompliant hospital.

CMS Price Transparency Proposed Rule - Table 63

From the CMS Proposed Rule:

We believe our proposed maximum daily dollar penalty amount on a sliding scale between $300 and $5,500 per day per hospital is commensurate with the level of severity of the potential violation, taking into consideration that nondisclosure of standard charges does not rise to the level of harm to the public as other violations (such as safety and quality issues) for which HHS imposes CMPs (Civil Monetary Penalties) and, therefore, should remain at a relatively lower level. For instance, the proposed maximum amount of $5,500/day, totaling $2,007,500/year would generally align with amounts used by other HHS initiatives that impose CMPs, such as HIPAA-related CMPs that, pursuant to statute, cap penalties at $1.5 million annually.

ClaraPrice provides Hospitals with a cost-effective solution to offload the administrative, technical, and cost burden associated with the process of managing and maintaining federal price transparency compliance. Hospitals receive a fully-compliant and managed consumer-friendly website of shoppable services and a comprehensive machine-readable file that is modern, secure, and API-ready. The cloud-based software works with all EHRs and requires no onsite integration. Contact a ClaraPrice price transparency expert to learn more today.

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