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What happens when hospitals do not follow CMS’ rules?

| Jun 28, 2021 | Health & Health Care Law |

The United States Centers for Medicare and Medicaid Services (CMS) has a lot of rules. What happens if a healthcare provider fails to follow them? In some cases, it could mean the provider cannot get reimbursement from Medicare and Medicaid. In others, the answer is not as clear.

A recent law provides an example. In January, a new CMS rule went into effect that requires hospitals to provide pricing information about various procedures and services. It turns out actually getting this information organized and up onto a website in a consumer-friendly format, as required by the law, is not an easy task. There is also concern that providing this information could have a negative impact, such as on the hospitals’ ability to negotiate payments with insurance providers. As a result, a large number of hospitals are not yet in compliance with this price transparency rule.

How many hospitals have failed to comply with this new law?

A lot. The U.S. News & World Report recently released its top ranked hospitals in the country. Of their twenty best hospitals, only one complies with this law.

A recent study published in The American Journal of Managed Care also reports a large disparity in prices for hospitals that are starting to report prices — which will likely further fuel concerns amongst hospital administration that providing this information could result in difficulties when negotiating with insurance providers.

What happens if hospitals fail to comply with CMS’ price transparency requirement?

The CMS is in the process of auditing hospital websites and is sending out warnings when they find the site fails to comply with the new rule. If the hospital fails to act as outlined within this notification, the agency could move forward with a civil monetary penalty. The CMS has also threatened to publicly name offenders on their website.

When faced with these options, a recent publication in JAMA Internal Medicine reports many hospitals are opting to pay the $300 per day fine instead of complying with the law. Why? After considering the effect of a failure to comply they believe the negative impact that would come with price disclosure could have an even more damaging impact than the cumulative expense of the fee.

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