We previously discussed the requirements of the Hospital Price Transparency Rule (“Rule”) on health care providers and health plans, as well as CMS’s proposal to increase penalties for a hospital’s failure to comply with the Rule. About a year and a half after the Rule became effective, CMS has now imposed its first set of civil monetary penalties (“CMPs”) on Northside Hospital Atlanta and Northside Hospital Cherokee, which have been fined $883,180 and $214,320, respectively.
The Rule requires, in part, hospitals to make public a machine-readable file containing a list of all standard charges for all items and services, such as, e.g., supplies, room and board, and use of the facility, among other items. See 45 C.F.R. § 180.40(a); id. at § 180.20. The Rule also requires hospitals to display shoppable services in a consumer-friendly manner. See id. at § 180.60(d)(2); id. at § 180.60(b). The goal of these specific requirements, in addition to those set forth in the remainder of the Rule, is to provide consumers with sufficient information about the charges for certain items and services by requiring health care providers and health plans to be publicly transparent about such charges.
Based on CMS’s CMP letters, dated June 7, 2022, Northside Hospital Atlanta and Northside Hospital Cherokee were non-compliant with the aforementioned specific requirements of the Rule. The chronology of events is important to understand how CMS ended up issuing its CMP letters.
Northside Hospital Atlanta
For Northside Hospital Atlanta:
Based on the foregoing, CMS imposed an $883,180 CMP on Northside Hospital Atlanta, calculated as follows, pursuant to 45 C.F.R. § 180.90:
Northside Hospital Atlanta has until 60 calendar days from the date of CMS’s CMP letter to pay. Until the hospital notifies CMS that all non-compliance has been corrected, CMPs will continue to accrue.
Northside Hospital Cherokee
For similar reasons as Northside Hospital Atlanta, Northside Hospital Cherokee was fined $214,320. CMS noted that Northside Hospital Cherokee was non-compliant since April 16, 2021, and notified the hospital by Warning Letter, dated May 18, 2021. CMS reviewed the hospital’s website on September 9, 2021, and issued a Request for CAP on October 27, 2021—to which the hospital did not respond. Similar to Northside Hospital Atlanta, CMS held a technical assistance call on January 11, 2022, during which Northside Hospital Cherokee notified CMS that it had intentionally removed all previously posted pricing files. CMS requested a Request for CAP on January 24, 2022—to which the hospital did not respond.
Similar to Northside Hospital Atlanta, Northside Hospital Cherokee was penalized $214,320, calculated as follows:
Similar to Northside Hospital Atlanta, CMS noted that Northside Hospital Cherokee continues to be non-compliant and, thus, CMPs will continue to accrue.
These fines reflect CMS’s willingness to take material enforcement action where the Rule’s regulatory requirements are largely ignored and CMS’s subsequent efforts to obtain compliance are rejected. Non-compliance carries heavy fines that are calculated, in part, by the number of days of non-compliance and by bed count. Health care providers should take notice and ensure that they are compliant or, at least, making efforts towards compliance with the Rule’s requirements. Critically, CMS will not accept a refusal to comply, as reflected in CMS’s responses to Northside Hospital Atlanta’s and Northside Hospital Cherokee’s refusals to submit CAPs. As noted in CMS’s CMP letters to these providers, CMS is scanning websites and subsequently notifying providers that appear to be non-compliant with the Rule—which are ignored at the provider’s peril.
The Firm is available to assist with interpreting the Rule’s requirements, evaluating the information posted on health care providers’ and health plans’ websites, and responding to any notices received from CMS. The Firm also notes that the Rule’s requirements relating to health plans will be effective in a matter of weeks—on July 1, 2021.
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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