By Surabhi Dangi-Garimella, Ph.D.

According to CMS, less than 50% of the 350 hospitals in the nation who received a warning from the agency have met hospital price transparency requirements, which went into effect on January 1, 2021—about 180 remain non-compliant and face imminent fines. These efforts are a positive step toward raising consumer awareness around the cost of care that they will receive so they are not blindsided after they visit a hospital for treatment. 

The law is aimed to remove the veil of opacity that surrounds the cost of hospital services. It is also intended for consumers to compare hospital charges and shop for what suits their budget. The law mandates hospitals to make public all their standard charges for all shoppable services, including the rates that they negotiate with insurance companies as well as the discounted price that they will offer patients if they pay in cash. This information should be clearly available on the hospital’s website in a consumer-friendly manner.

After issuing warnings, CMS has now taken more concrete steps and set an example with two Atlanta hospitals: Northside Hospital Atlanta was fined $883,000 and Northside Cherokee was fined $214,000 for not heeding CMS’ warnings. This raises questions around the time frame that CMS is willing to give hospitals to be compliant. Emily Cook, McDermott Will & Emery, told Inside Health Policy that CMS might be willing to wait if assured that hospitals are working to make amends. 

Interestingly, while there is a formula for calculating the fine (a daily rate plus a per bed per day rate), hospitals that remain non-compliant may be issued additional notices. It is the hospital’s onus to inform CMS of compliance, or else the penalty will continue to accrue till the payer actually reviews a specific hospital’s website for compliance check. 

CMS will continue to update the list of hospitals that have been fined here:

AHA’s Response

According to the American Hospital Association (AHA), health systems have made changes and taken steps to comply with CMS’ requirements, such as providing a patient-friendly cost estimator tool on their website. What seems to have posed a bigger challenge for hospitals is compiling machine-readable information of all the negotiated contracts with various health plans, which AHA claims is a complicated and costly undertaking, and adds “little to no direct benefit to patients”. AHA does acknowledge that CMS has cooperated, and is working, with many hospitals through the compliance process.   

Surabhi Dangi-Garimella, Ph.D. is a biologist with academic research experience, who brings her skills and knowledge to the health care communications world. She provides writing and strategic support to non-profit groups via her consultancy, SDG AdvoHealth, LLC.