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Hospitals face penalties for not making prices public

On Behalf of | Jun 21, 2022 | Healthcare Fraud, Medicare / Medicaid Fraud

The Centers for Medicare and Medicaid Services (CMS) hit two hospitals in Georgia with $1.1 million in financial penalties for violating the 2021 rules requiring hospitals to share their medical procedures and treatment prices. This change (which the CMS will enforce) addressed the nation’s $1.2 trillion industry’s tendency to keep its rates a secret. These enforcements are the first for the new rules. The two hospitals are both owned by Northside Hospital.

Thousands more are not compliant

According to the Wall Street Journal, thousands of other hospitals are still not compliant more than a year after the rule went into effect, with only 6% of the 5,200 hospitals in the U.S. fully compliant when their websites were evaluated between July and September of 2021. The new law requires two lists:

  • One that hospitals show all prices for all hospital services.
  • A second one offers all prices for services that can be scheduled in advance (so consumers can shop around).

The study found that about 14% of hospitals posted a comprehensive list, and 30% had only posted a file of shoppable prices.

Moving in the right direction?

Some hospitals are aware that they are non-compliant and ask for more time to make the necessary changes, but others loathe revealing their prices to competitors. The goal of the rule, created under the Trump administration, was to force medical care providers to be more competitive and transparent in their pricing. The CMS issued more than 352 warning letters to hospitals, asking them to explain how they plan to become compliant. According to the CMS, nearly 160 have yet to respond to the warning.

The CMS’s first two fines on this matter are likely meant to put non-compliant hospitals on notice – the hospitals did not become compliant after the original letter and even after warning that they were about to miss their deadline. The fine for not posting prices was $109,500 during the rule’s first year with a $300 increase per day, but that amount is now up to $2 million per hospital since January 2022, with much higher per day increases.