Price Transparency Rule Faces Uncertain Future

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The Trump administration’s hospital price transparency rule went into effect on January 1, 2021, after it was upheld by the U.S. Court of Appeals for the District of Columbia Circuit in a December 2020 decision. The future of the rule remains an open question as a new administration takes over in Washington, D.C., and some media reports indicate that hospitals have been slow to comply with the rule.

Background on Rule

The Centers for Medicare and Medicaid Services (CMS) finalized the price transparency rule in November 2019. It requires hospitals to publish two lists of prices:

  1. A comprehensive, “machine-readable” list of various charges for all items and services.
  2. A consumer-friendly list of prices for a smaller set of “shoppable” services.

Both lists must include payer-specific negotiated charges which are typically kept confidential by hospitals. The American Hospital Association (AHA) and other hospital groups challenged the rule, seeking to block its implementation. However, but those efforts ultimately failed, and the rule went into effect.

AHA Letter

On January 7, 2021, the AHA sent a letter to the Department of Health and Human Services, urging the agency to exercise enforcement discretion with respect to the rule, at least until the end of the COVID-19 pandemic. The letter stated in part, “[h]ospitals’ ability to comply with the rule at this time is particularly challenged by an increase in the volume of COVID-19 patients and the need to distribute multiple vaccines. Both of these events are straining hospital and health system resources at a critical time in the course of the pandemic sweeping the nation. These strains are further compounded by the considerable gaps in federal guidance creating compliance uncertainty and recent legislation placing new price transparency requirements on hospitals.”

The AHA letter also argued that compliance with the rule is compounded by legislation passed at the end of 2020 that included additional transparency requirements, including a requirement that providers develop “good faith estimates” of the total expected charges for scheduled items and services. Regulations defining precisely how providers can meet these requirements have not yet been issued.

Lack of Compliance

One media report, published on January 18, 2021, included a survey of New York area hospitals and found either partial or no compliance with the rule as of that date. Two hospitals appeared to comply with the shoppable services component but did not have the comprehensive price list posted. With penalties capped at $300 per day, the report speculated that some hospitals may simply choose not to comply and risk the relatively low penalties.

The Biden administration has not yet signaled whether it will consider delaying enforcement or revising the rule in any way. As a result, hospitals must choose to either comply with the rule and expose sensitive pricing information, or risk the financial and reputational consequences of being non-compliant.

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