Price transparency in healthcare is an ongoing topic of interest and regulation in the United States that dates back several years. The Affordable Care Act (ACA) of 2010 had a provision that requires hospitals to publish price lists of their standard charges online annually. Following the ACA, the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 and the 21st Century Cures Act of 2016 were enacted, further extending price transparency mandates.
The Centers for Medicare & Medicaid Services (CMS) also introduced several policies and regulations to increase price transparency in the healthcare market. In 2018, CMS launched the “Hospital Price Transparency Initiative,” which aimed at improving the visibility and accessibility of hospital price information.
In 2019, President Donald Trump issued an executive order that directed the Department of Health and Human Services (HHS) to introduce regulations that facilitate price and quality transparency in the healthcare industry. The “Final Rule on Price Transparency” the CMS issued in November 2019 requires hospitals to disclose their standard changes, this went into effect January 1, 2021. As of July 1, 2022, most group health plans and issuers of group or individual health insurance were posting pricing information for covered items and services. This pricing information can be used by third parties, such as researchers and app developers to help consumers better understand the costs associated with their health care. The next requirements went into effect on January 1, 2023, providing additional access to pricing information and enhancing consumers’ ability to shop for the health care that best meets their needs. The final stage goes into effect on January 1, 2024.
Requirements of the rule
To comply with price transparency requirements, the finalized rules require group health plans and health insurance issuers in individual and group markets to provide cost-sharing information to participants, beneficiaries, or enrollees upon request, including an estimated cost-sharing liability for covered items or services by a provider.
The rules require the information to be available online and, upon request, in paper form so people can calculate their out-of-pocket expenses and make informed choices. The rules also mandate disclosure of in-network provider rates, historical out-of-network allowed amounts, and drug pricing information, which should be posted in three machine-readable pricing data.
The potential fines for hospitals and insurance companies that do not comply with price transparency regulations can vary depending on the specific regulation and the enforcing agency.
For hospitals, CMS may impose a civil monetary penalty of up to $300 per day for each day of noncompliance. The penalty may go up to $109,500 per year for repeated noncompliance. Insurance companies’ penalties can vary based on state laws and regulations. In some states, insurance commissioners may impose penalties for noncompliance, which could lead to large fines. Under the ACA, insurers may be subject to fines of up to $100 per day, per individual affected by violations of the law.
It’s important to note that the exact penalties and enforcement policies can vary by state and regulation, and the best way to get accurate and up-to-date information about potential fines is by consulting a legal expert.
As of now, the implementation of price transparency regulations in the U.S. healthcare industry is ongoing. Due to the complexity of healthcare pricing, implementation issues, as well as potential challenges and objections from stakeholders, the regulations’ full impact has yet to be seen.
How McBee can audit to assess your compliance
McBee, a division of Netsmart Technologies, can audit to assess compliance with price transparency regulations by following these steps:
- Identify the specific requirements of price transparency regulations that are relevant to your company. For example, this could include requirements related to publishing standard charges for all items and services provided, disclosing pricing and cost-sharing information, and making machine-readable files available.
- Review your company’s current processes and procedures to ensure compliance with the price transparency requirements. This includes evaluating the methods used to provide pricing information to customers, the accuracy and completeness of data sharing, and the ability to respond to consumer inquiries.
- Identify any gaps and areas of non-compliance based on the review in step two (2). Assess the potential impact of these gaps on both the company’s financial health and reputation.
- Develop an action plan to address these gaps and areas of non-compliance. The plan should include steps to educate employees and customers on pricing transparency requirements, implement tools to automate price transparency processes, and review and update existing policies and procedures.
- Conduct regular follow-up audits to assess the effectiveness of the action plan and ensure continued compliance with price transparency requirements.
- Stay up to date with ongoing regulatory changes and adjust the audit process and action plan accordingly, if needed.
By following these steps, agencies can ensure compliance with price transparency regulations and avoid potential risks associated with non-compliance. Contact McBee today to get started.