The Hospital Price Transparency Rule, which became effective on January 1, 2021, requires hospitals to publish and make public a list of its standard charges and certain diagnosis-related groups of charges set forth in Section 1886(d)(4) of the Social Security Act.
Failure to adhere to these requirements currently carries a monetary penalty of $300 per day. 45 C.F.R. §180.90(c)(3). CMS is considering a new proposal, justified by alleged wide-spread non-compliance identified by CMS, which seeks to increase the civil monetary penalty on a sliding scale based on the number of beds a hospital has (determined by those reported in the hospital’s cost report data submitted to CMS). 86 Fed. Reg. 42018, 42313 (Aug. 4, 2021). Specifically, it maintains the penalty of $300/day for smaller hospitals (those with 30 beds or less), but increases the penalty for “large” hospitals (those with 31 beds or more) to $10 per day per bed with a daily maximum of $5,500. Id. at 42314. Interestingly, while CMS draws a distinction between hospitals having 31-550 beds and those having more than 550 beds, the maximum daily penalty for the largest of hospitals (550 beds or more) remains the same. Id. For a year of non-compliance, this could cost small hospitals $109,500 per year and hospitals with 550 beds or more just over $2 million dollars a year. Id.
The proposed rule states that these increases “align with amounts used by other HHS initiatives that impose C[ivil] M[onetary] P[enaltie]s, such as HIPAA related CMPs that, pursuant to statute cap penalties at $1.5 million annually.” Id. at 42315. However, CMS appears to be open to alternatives or further suggestions on criteria to evaluate to determine the penalty amount, including, but not limited to, hospital revenue, the severity of the non-compliance, and the reason for non-compliance. The deadline to submit comments to the proposed rule is September 17, 2021. See 86 Fed. Reg. at 42315-17.
In addition to increasing the civil monetary penalty for non-compliance, the proposed rule seeks to exclude state forensic hospitals (those that provide services only to individuals “in the custody of the penal authorities and do not offer services to the general public”), and make the “machine-readable” files that contain the pricing more easily accessible to the public. Id. at 42317-18.
If passed, the increase would take effect January 1, 2022.