Hospital Price Transparency Final Rule, Part 2

on Wednesday, 11 December 2019. All News Items | Miscellaneous

Monitoring, Penalties, and Appeal Rights

Last week’s Wednesday@One included a lengthy article about the requirements for hospitals to make public their standard charges, including payer-negotiated charges as described in the Final Rule for Price Transparency Requirements for Hospitals to Make Standard Charges Public. The only piece of good news from that Rule was the delay in implementation of the new requirements until January 1, 2021. Until then, hospitals still have to comply with the existing guidance which requires hospitals to make public their chargemaster charges (gross charges) online in a machine-readable format.

If you read last week’s article, you know that complying with the new price transparency rule will be quite a challenge – that is, if the legality of the new requirements holds up. There are already lawsuits challenging the new requirements, especially concerning the release of payer-negotiated rates. Being ever optimistic, CMS included in the final rule how they plan to oversight compliance and what will happen should a provider be found in noncompliance.

Monitoring

For monitoring compliance with the new price transparency requirements, CMS plans to rely predominately on complaints from individuals or entities regarding a hospital’s potential noncompliance.

Monitoring methods may include, but are not limited to, the following, as appropriate:

  • CMS’ evaluation of complaints made by individuals or entities to CMS.
  • CMS review of individuals’ or entities’ analysis of noncompliance.
  • CMS audit of hospitals’ websites.

CMS will be reviewing and auditing to determine if a hospital’s noncompliance constitutes a material violation of one or more requirements. This may include, but is not limited to, failure to make public its standard charges as required or failure to make public its standard charges in the form and manner required.

Actions to Address Noncompliance

CMS may take the following actions if they determine the hospital is noncompliant with the price transparency requirements:

  • Provide a written warning notice to the hospital of the specific violation(s) - (notice of violation).
  • Request a Corrective Action Plan (CAP) from the hospital if its noncompliance constitutes a material violation of one or more requirements.
    • The CAP must be in the form and manner, and submitted by the deadline, specified in the notice of violation issued by CMS to the hospital.
    • The CAP must specify the corrective actions or processes the hospital will take to address the deficiencies identified and the timeframe for completion.
    • A CAP is subject to CMS review and approval.
    • Hospitals must comply with the requirements of the CAP.
    • CMS may monitor and evaluate the hospital’s compliance with the CAP.

Penalties

CMS may impose a civil monetary penalty (CMP) on the hospital and publicize the penalty on a CMS website if:

  • A hospital fails to submit a CAP in the form, manner, or by the deadline, specified in a notice of violation or
  • The hospital fails to correct violation(s) within the specified timeframes of the CAP.

The maximum daily dollar amount for a CMP to which a hospital may be subject is $300, even if the hospital is in violation of multiple discrete requirements of 45 CFR, part 180.

CMS will provide a written notice of imposition of a CMP to the hospital via a certified/traceable delivery. The notice will contain the following elements:

  • The basis for the hospital’s noncompliance – that is, the requirement(s) the hospital violated, and the hospital’s failure to submit and/or comply with a requested CAP.
  • The effective date of the violation as determined by CMS.
  • The amount of the penalty as of the date of the notice.
  • Payment instructions. The payment must be made in full within 60 calendar days after the date of the notice of imposition of a CMP from CMS or within 60 calendar days after the date of a final and binding appeal decision to uphold, in whole or in part, the CMP.
  • Intent to post the notice of imposition of a CMP on a CMS website.
  • Statements that:
    • penalties may continue to be imposed for continuing violations,
    • the hospital has a right to a hearing, and
    • if the hospital fails to request a hearing within 30 calendar days, the penalty and subsequent penalties will be imposed without right of appeal.

CMS can issue additional notices either subsequently for continuing justification or as a “clarifying modification” to conform to adjudicated finding when an appealed “CMP is upheld, in part, by a final and binding decision.”

CMS will post notices of all CMPs, initial and subsequent, on a CMS website. This website will also include posting that the CMP is under review, while they review the hospital’s request for a hearing (appeal). This posting will be maintained or removed based on the outcome of the appeal.

Appeals

“A hospital upon which CMS has imposed a penalty under 45 CFR part 180 may appeal that penalty in accordance with 45 CFR part 150, subpart D, with the exceptions (for the propose of applying the provisions of part 150 to CMPs under part 180) as described in this section of this final rule.”

Generally, under this approach, a hospital upon which CMS has imposed a penalty may request a hearing before an Administrative Law Judge (ALJ) of that penalty. The Administrator of CMS, at his or her discretion, may review in whole or in part the ALJ’s decision. A hospital against which a final order imposing a CMP is entered may obtain judicial review.

If the hospital does not request a hearing within 30 calendar days, CMS may impose the original CMP and additional penalties due to continuing violations without further right of appeal for the hospital. The only exception to this is if the hospital can show good cause as to why they did not request a hearing within the time limits (30 days).

Monitoring through complaints, a limit of $300 per day fine, and an ALJ appeal process may not seem to reflect the highest priority for the price transparency initiative. Some commentaries say this rule and the proposed rule relating to price transparency for health insurers and health plans, especially the parts being challenged in court, may be politically motivated since it is an election year. Monitoring complaints sounds simple but, I think it could be effective for CMS and scary for hospitals. If you fail to follow the rules, one disgruntled patient or employee who hears about these requirements could go looking for your charges and report your noncompliance to CMS. And I would not be surprised to have some watchdog group or the press scrutinizing hospital websites also.

Article by Debbie Rubio

Debbie Rubio, BS, MT (ASCP), is the Manager of Regulatory Affairs and Compliance at Medical Management Plus, Inc.  Debbie has over twenty-seven years of experience in healthcare including nine years as the Clinical Compliance Coordinator at a large multi-facility health system.  In her current position, Debbie monitors, interprets and communicates current and upcoming regulatory and compliance issues as they relate to specific entities concerning Medicare and other payers.  You may contact Debbie at This email address is being protected from spambots. You need JavaScript enabled to view it..

This material was compiled to share information.  MMP, Inc. is not offering legal advice.  Every reasonable effort has been taken to ensure the information is accurate and useful.

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