On June 7, 2022, the Centers for Medicare and Medicaid Services (CMS) issued the first fines with respect to the transparency rules that took effect in January 2021. Under the transparency rules, hospitals must disclose five types of charges for items and services in a patient-accessible online file, including negotiated rates with payers. The rule also requires hospitals to publish standard charge information for more than 300 services that patients can schedule in advance – with the aim of making it easier for patients to “price shop” for certain services.
Regulators sent warning letters to Northside Hospital Atlanta and Northside Hospital Cherokee, requesting corrective action plans from the facilities. Northside Hospital Atlanta allegedly told regulators that patients should either call or email the facility for price estimates.
Northside Hospital Atlanta
According to CMS, Northside Hospital Atlanta had been out of compliance with the transparency rules since March 24, 2021. The agency sent a Warning Notice on April 19, 2021, advising of the non-compliance, to which the hospital did not respond or provide any supporting documentation. On September 2, 2021, CMS reviewed the hospital website again, finding that it remained out of compliance. Then, on September 30, 2021, CMS sent a Request for Corrective Action Plan (CAP) to the hospital.
CMS notes that the hospital failed to provide a comprehensive machine-readable file with all standard charges for certain items and services for patients to access. Further, the hospital did not provide shoppable services in a consumer-friendly manner.
On the due date of the requested CAP, a hospital representative allegedly sent correspondence to CMS that did not “specify any corrective actions that the hospital intended to take,” but instead recommended that patients “request specific price estimate quotes by either calling the Price Estimate line…or sending a simple email to…”.
CMS requested a revised CAP, which was never submitted. CMS made several attempts thereafter to receive CAPs, to no avail. Therefore, CMS levied a civil monetary penalty of $883,180.00. CMS levied a $300 fine per day for September 2, 2021 through December 31, 2021 ($36,300) and $10 per bed per day for the time period of January 1, 2022 through June 7, 2022 ($846,880). CMS also noted that fines will continue to accrue until the hospital makes the necessary corrections and CMS determines the hospital is in full compliance with the transparency rules.
Northside Hospital Cherokee
With respect to Northside Hospital Cherokee, CMS levied a CMP of $214,320.00. According to the letter sent to the hospital, CMS said the hospital was noncompliant with the transparency rules since April 16, 2021.
Similar to Northside Hospital Atlanta, CMS made several requests for a CAP to the hospital for its failure to make public a machine-readable file containing a list of all standard charges for select items and services and its failure to make available a consumer-friendly list of standard charges for a limited set of shoppable services. Northside Hospital Cherokee allegedly did not respond to any of the CAP requests.
CMS, therefore, noted that the failure to submit a CAP and failure to meet the transparency requirements meant that the hospital is out of compliance and a civil monetary penalty was levied.
Northside Hospital Cherokee was fined $300 per day of noncompliance from September 9, 2021 through December 31, 2021 ($34,200) and $10 per bed per day ($180,120) for January 1, 2022 through June 7, 2022.
CMS also noted that CMS may issue subsequent notices with additional civil monetary penalties for continuing violations. Additionally, as with Northside Hospital Atlanta, it is incumbent upon the hospital to alert CMS to compliance with the rules as a CMP will continue to accrue until the agency reviews the website and finds it to be in compliance.
What Is To Come
These are the first two fines levied by CMS for failure to comply with the transparency requirements. However, as we wrote earlier this year, CMS sent hundreds of warning notices as of December 31, 2021, including nearly 100 requests for corrective action plans. Therefore, it is likely that there are more fines to come in the coming months.