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Hospitals: Prepare for CMS Price Transparency Audits in January

Analysis  |  By Alexandra Wilson Pecci  
   December 22, 2020

CMS plans to audit a sample of hospitals for compliance with its new mandate, in addition to investigating any complaints about noncompliance.

With less than two weeks until CMS's price transparency rule is set to go in effect, CMS said last week that it plans to "audit a sample of hospitals for compliance starting in January."

That's in addition to investigating any complaints that CMS receives about noncompliance.

The new mandate goes into effect on January 1 after being delayed for a year and upheld in court this summer. There's an up to $300 per day penalty for noncompliance.

It has two components:

1. A consumer-friendly disclosure of the hospital's standard charges for 300 "shoppable services" (i.e., ones that can be scheduled in advance). An online patient-facing price transparency tool would also satisfy this requirement.

2. A machine-readable file that discloses five types of standard charges, including gross charges, and includes descriptions of each item or service; payer-specific negotiated charges for each item or service; deidentified minimum and maximum negotiated charges; and discounted cash prices.

In addition to the audits, hospitals can be reported online for noncompliance, and CMS will investigate those reports.

If, after an investigation, CMS finds a hospital to be noncompliant with the price transparency rule, it will:

  • Provide a written warning notice to the hospital of the specific violation(s)
  • Request a Corrective Action Plan (CAP) if noncompliance constitutes a material violation of one or more requirements
  • Impose a civil monetary penalty not in excess of $300 per day and publicize the penalty on a CMS website if the hospital fails to respond to our request to submit a CAP or comply with the requirements of a CAP

The audit announcement was made in a special "Monitoring for Hospital Price Transparency" edition of MLN Connects, a newsletter from CMS's Medicare Learning Network.

Alexandra Wilson Pecci is an editor for HealthLeaders.

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