On June 24th, 2019, then President Donald Trump issued an executive order titled “Improving Price and Quality Transparency in American Healthcare to Put Patients First”, instructing the Department of Health and Human Services (HHS) to propose a rule requiring “hospitals to publicly post standard charge information, including charges and information based on negotiated rates and for common or shoppable items and services, in an easy-to-understand, consumer-friendly, and machine-readable format”.
The final rule went into effect on January 1st, 2021 as 45 CFR 180. It implements section 2718(e) and 2718(b)(3) of the Public Health Service Act, and section 1102(a) of the Social Security Act.
While a consensus regarding the effectiveness of this law has not yet been reached, according to a Health Affairs article released on February 14th, 2023, HHS stated that 70% of hospitals were in compliance with 45 CFR 180. However, Patient’s Rights Advocate, a non-profit “focused on ushering in systemwide healthcare price transparency,” found in their most recent report, published in July 2023, that only 36% of hospitals are in compliance with 45 CFR 180.
An increasing number of states, such as New York and Colorado, have passed their own regulations to promote hospital price transparency
In the three years since its passing, 45 CFR 180 has been amended twice, first in November 2021 and again in November 2023. Additionally, CMS updated their own policy with regards to enforcement in April 2023.
45 CFR 180
Under 45 CFR 180, hospitals are required to make public standard charges in two ways; with a machine-readable list of all standard charges for all items and services, and with a “consumer-friendly list” of standard charges for a limited set of “shoppable services”.
180.50 CHARGE DESCRIPTION MASTER & NOVEMBER 22ND, 2023 AMENDMENT
According to 45 CFR 180.50, hospitals are required to “establish, update, and make public” a list of “all standard charges for all items and services online” as further specified by that section. Required data elements for the standard charges includes a “description of each item or service provided by the hospital,” the “gross charge” as further defined, payer-specific negotiated charges and any codes used for accounting or billing for the item.
45 CFR 180.50 further establishes specific rules hospitals must follow to make their standard charges accessible to the public. Hospitals must comply with all formatting and accessibility requirements. Standard charge information must be updated at least once a year.
On November 22nd, 2023, 45 CFR 180 was amended by CMS to standardize specifications for the required machine-readable file (MRF). According to the November 2nd, 2023 CMS Fact Sheet, “Standardization will improve hospitals’ ability to comply, enhance the public’s ability to aggregate information… and streamline CMS’s ability to enforce the requirements.” CMS has created a phased timeline for compliance.
Beginning January 1st, 2024, hospitals are expected to ensure that the public website they have chosen to host their MRF contains a .txt file that includes both identifying and contact information about the hospital, and direct links to both the MRF and MRF source page. Additionally, hospitals must include a footer on their homepage labeled “Price Transparency” that links to the publicly available web page that hosts the link to the machine-readable file.
Beginning July 1, 2024, hospitals are required to encode all standard charge file information in the MRFs. They must also add an affirmation that states “that, to the best of its knowledge and belief, the hospital has included all applicable standard charge information in accordance with the requirements of this section, and that the information encoded is true, accurate, and complete as of the date indicated in the machine-readable file.”
Additionally, by July 1st, 2024, more information will be required for “payer specific negotiated charge[s],” one of the five required ways of displaying standard charges. The MRF must display the payer names and plans, the method used to establish the standard charge, and whether the standard charge should be interpreted as a dollar amount or as established based on a percentage or algorithm. By January 1st, 2025, the payer specific negotiated charge information must include an “estimated allowed amount in dollars”.
By January 1st, 2025, the hospital must also provide the drug type of measurement and unit of measurement.
180.60 CONSUMER FRIENDLY LIST OF STANDARD CHARGES
According to 45 CFR 180.60, a “consumer friendly list of standard charges” must be made for all “shoppable services” a hospital provides. According to CMS’s 10 Steps to Making Public Standard Charges for Shoppable Services, “As there are a variety of consumer-friendly ways to display standard charges for shoppable services and because we did not want to restrict hospitals from innovating or from having to duplicate efforts… Hospital[s] [have] flexibility to determine what format [they] use to display [their] shoppable services information in a manner that is consumer-friendly.”
A shoppable service is a service that can be scheduled by a healthcare consumer in advance. According to the executive order, “Shoppable services make up a significant share of the healthcare market, which means that increasing transparency among these services will have a broad effect on increasing competition in the healthcare system as a whole.”
This display must contain the required price information that is specific to each individual insurance plan the hospital takes. The display must consist of as many of the 70 CMS-specified shoppable services that are provided by the hospital, and as many additional hospital-selected shoppable services as is necessary for a combined total of at least 300 shoppable services.
Under 45 CFR 180, if a CMS shoppable service is not offered, the hospital must indicate that. If the price of a shoppable service changes based on whether the service is offered in an inpatient or an outpatient setting, the hospital must provide differentiated information for both.
A hospital is deemed by CMS to be in compliance if the hospital maintains an internet-based price estimator tool which contains all of the required information and is accurate to the time it is used.
180.70 MONITORING AND PENALTIES FOR NONCOMPLIANCE & NOVEMBER 22ND AMENDMENT
According to 45 CFR 180.70, CMS will evaluate hospitals to determine if they have complied with the requirements of 45 CFR 180. CMS may, among other things, evaluate complaints, review analysis of noncompliance, and audit hospitals’ websites.
If a hospital is deemed noncompliant, CMS may provide a written notice of warning and request a Corrective Action Plan (CAP). If the hospital fails to provide or comply with their CAP, CMS may impose Civil Monetary Penalties (CMPs). CMS will publish CMPs on their website.
According to the November 22nd, 2023 amendment, if a notice is provided, hospitals must now submit an “acknowledgement of receipt of the warning notice” in the format and by the deadline specified in the notice of violation by CMS.
Additionally, CMS has expanded upon the standard actions they may take to assess compliance. CMS may now “comprehensive[ly] review” hospitals’ websites in addition to auditing them, require submission of certification by an authorized hospital official as to the accuracy and completeness of the information in the MRF, and require the submission of additional documents necessary to determine compliance.
Furthermore, if a non-compliant hospital is determined by CMS to be part of a “health system,” CMS may contact health system leadership to notify them, and work with them to address similar problems for hospitals included in their health system.
Finally, CMS may publish on its website such things as their assessment of a hospital’s compliance, any compliance action taken against a hospital, and notifications sent to health system leadership.
According to the November 2nd Fact Sheet, “[t]hese actions complement CMS’s April 2023 actions.”
180.80 CORRECTIVE ACTION PLANS & APRIL 26TH, 2023 CMS UPDATES
According to 45 CFR 180.80, if a hospital is noncompliant, they may receive a request for a Corrective Action Plan (CAP), contained within a notice of violation. A CAP is a specific plan of actions a hospital can take in order to correct their violations by a specific date. CMS will then review, and then either reject or approve the CAP.
On April 26th, 2023, CMS updated their policy to provide a standardized timeline for their CAPs. According to the April 26th, 2023 CMS Fact Sheet, CMS will continue to require hospitals that are out of compliance with the hospital price transparency regulation to submit a CAP within 45 days from when CMS issues the CAP request. However, while hospitals were previously able to provide their own timeline to complete their CAP, hospitals must now complete CAPs pursuant to 45 CFR 180 within 90 days.
Additionally, the April 26th, 2023 update states that CMS will now automatically impose Civil Monetary Penalties (CMPs) on hospitals that fail to submit a CAP within the 45 day deadline, or fail to comply with their CAP within the 90-day deadline. Before issuing the CMPs, CMS will re-review the hospital’s files to determine whether any of the violations cited in the CAP request continue to exist.
Finally, CMS will now issue hospitals that have not made any attempt to satisfy the requirements of 45 CFR 180, a CAP request without first issuing a warning notice.
The April 26th, 2023 Fact Sheet states that, as of that date, CMS had issued more than 730 warning notices and 269 requests for CAPs.
180.90 CIVIL MONETARY PENALTIES & NOVEMBER 16, 2021 AMENDMENT
On November 16, 2021, 45 CFR 180 was amended by CMS to proportionally penalize larger hospitals. This amendment went into effect on January 1st, 2022. Originally, hospitals would receive a separate Civil Monetary Penalty (CMP) for each violation of 45 CFR 180, but the total of these penalties could not exceed $300 a day for each day the hospital was determined to be out of compliance.
According to the November 16th, 2021 amendment to 45 CFR 180, the maximum total penalty is calculated based on the number of beds a hospital has.
- For a hospital with a number of beds equal to or less than 30, the maximum daily CMP is $300.
- For a hospital with at least 31 and up to and including 550 beds, the maximum daily CMP is $10 times the number of beds.
- For a hospital with a number of beds over 550, the maximum daily CMP amount is $5,500
CMS posts the notices of imposition of CMPs on their website. As of January 10th, 2024, 14 hospitals have received notices of impositions of CMPs, with fines ranging from $56,940 to $979,000.
180.100 APPEALS OF CIVIL MONETARY PENALTIES
Under 45 CFR 180.100, a hospital has the right to appeal their CMPs to an Administrative Law Judge. The hospital must submit a request for a hearing within 30 days of receiving their Notice of Imposition of Civil Monetary Penalties. If they fail to request a hearing within 30 days, they may be required to pay the full CMP issued in the notice, and any additional CMPs issued for the same instances of violation. If a hospital receives a hearing, they must pay the full amount issued by the Judge after the hearing’s decision within 60 days.
If the CMP is overturned in full, CMS will remove the notice of imposition of a civil monetary penalty from their website.
LEGAL CHALLENGES
In December 2019, the American Hospital Association (AHA) issued a lawsuit seeking declaratory relief to the effect that the Rule exceeds CMS’ statutory authority among other things and permanent injunctive relief barring HHS from enforcing the Rule. The Court granted summary judgment against the AHA and in favor of the Department of Health and Human Services, which was upheld on appeal.
Categories: DATA TRANSPARENCY
Leave a Reply