2022 CMS pricing transparency updates
Small but powerful changes to Price Transparency were announced by CMS in November 2021

2022 Price Transparency CMS Updates

2022 Hospital Price Transparency updates were posted within the OPPS Final Rule with the Display Copy posted on the Federal Register website 11/2/22 and formal release published 11/16/2021. If your team missed this important update, this post will be important to review for ensuring your hospital’s price transparency compliance.

The official Federal Register rule listing updates for 2022 Price Transparency is “Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Price Transparency of Hospital Standard Charges; Radiation Oncology Model”. The price transparency section is similar to past rules on this topic where CMS discusses the statutory basis and background of the Rule, intention of the regulation, ongoing concerns with the industry’s compliance to the rules, 2022 proposals, summary, and responses to public comments, and final decisions.

This year’s Final Rule topics on Price Transparency:

  • Increased fines for non-compliance
  • Exception of State Forensic Hospitals from the mandate
  • Clarification and more stringent regulations on access to the Machine-Readable file
  • Clarification of the Price Estimator tool option

We suggest reviewing the full text of the Rule considering its importance. This year’s rules only focus on updates and issues. CMS detailed guidance has been documented on Price Transparency websites as well as outlined in the CMS regulatory sources, FAQ documents, and other sources.

CMS continues to stand behind its belief that hospitals failing to post the standard charge data are directly hindering consumers’ decision-making ability and has solidified its position on Price Transparency non-compliance in this 2022 Rule.

The Price Transparency updated regulations (Section XVIII) are found on pages 1230 -1279 of the PDF display copy posted in ChargeAssist®. This year’s section on Price Transparency includes the following sections:

The following four sections summarize Price Transparency topics outlined in the 2022 Final Rule.

Increased Fines

The Rule discusses non-compliance and CMS’ ongoing plan to monitor, audit, suggest corrective action, and ultimately, fine hospitals that fail to follow one or more aspects of the Price Transparency rules. In other words, starting in January, there are increased financial and compliance risks to consider.

Monitoring and enforcement policies were established in the 2020 calendar year’s rulemaking. CMS monitors hospitals based on complaints, review of third-party analysis, and audits hospital websites. Failure to meet one or more of the requirements is determined non-compliance and could ultimately result in financial penalties. The general monitoring and enforcement approach CMS initially planned in 2020 included:

  • Provision of a written warning notice to the hospital of the specific violation(s)
  • Requesting a corrective action plan from the hospital if its non-compliance constitutes a material violation of one or more requirements
  • Imposing a Civil Monetary Penalty (CMP) not in excess of $300 per day(note that this penalty has now increased and is scaled by bed size in the 2022 rule)
  • Publicizing the penalty on a CMS website if the hospital fails to respond to CMS’ request to submit a corrective action plan or comply with the requirements of a corrective action plan

Based on CMS’ monitoring efforts, the agency has noted a high rate of non-compliance. Earlier enforcement plans were tightened further in the 2022 Final Rule despite numerous Public Comments and attempts by associations to delay the expanded penalties.

CMS modified the CMP calculations to a scaled fine structure based on non-compliant hospitals’ bed sizes as follows:

  • 30 or fewer beds: the maximum daily dollar CMP amount is $300
  • 31 to 550 beds: the maximum daily dollar CMP amount is the number of beds X $10
  • Over 550 beds: the maximum daily dollar CMP amount is $5,500

The CMPs are applicable whether the hospital is in violation of a single or multiple requirements of 45 CFR part 180. 

CMS determined that the hospital Medicare Cost Report would be used to define bed size when calculating penalties. Table 76 of the 2022 Final Rule shown below outlines the tiers of bed sizes, the associated daily fine, and a projection of penalties for a full calendar year.

There was much discussion about the source of hospital bed size data. CMS determined that Medicare Cost report data as maintained in the Healthcare Provider Cost Reporting Information System (HCRIS) was the best source.

If involved in the CMP fine process, CMS determined that hospitals would be responsible for providing documentation of bed count if CMS did not have the data available. This would apply when there is no Medicare Cost Report in HCRIS database, the provider is not Medicare enrolled, etc.

CMS Final Rule text outlines what occurs in this circumstance:

“…if CMS cannot determine a non-compliant hospital’s number of beds using hospital cost report data in HCRIS, and if the non-compliant hospital fails to provide CMS with documentation of its number of beds, in the form and manner and by the deadline specified by CMS, we would impose a CMP calculated based on a number of beds greater than 550, and therefore we would impose the maximum penalty of $5,500/day ($10*550/day) or $2,007,500/year.”

The language in the Rule also discusses how the scaling of the penalty is impacted by the timeframe the hospital is out of compliance. We anticipate that finalizing CMP calculations may be a complicated process in some circumstances. Penalties established in this revised Rule will be updated annually based on CMS adjustment factors.

State Forensic Hospital Exception

In previous price transparency rules, CMS excluded certain hospitals due to the limited cost-sharing by their patients. This includes Indian Health Services and Tribal facilities, Government Hospitals, Military treatment facilities, or V.A. hospitals, for example. In the Proposed Rule for 2022, CMS listed State Forensic Hospitals as excluded facilities. Some questioned their definition, which CMS clarified:

“For purposes of application of this exception, we proposed to add a definition to § 180.20 to define a “state forensic hospital” as a public psychiatric hospital that provides treatment for individuals who are in the custody of penal authorities. Such forensic patients typically include: (1) offenders incompetent to stand trial, (2) offenders with mental health disorders, (3) mentally ill prisoners transferred from prison, (4) offenders found not guilty by reason of insanity, or (5) post incarcerated civilly committed individuals….“In order to be deemed as having met requirements, the state forensic hospital must provide treatment exclusively for individuals who are in the custody of penal authorities (for example, a state psychiatric hospital with a forensic wing would not meet criteria necessary to be deemed to be in compliance). We estimated there are approximately 111 such institutions that could meet the definition….”

CMS finalized the proposal for excluding the State Forensic Hospitals from the Price Transparency mandate. Remember that CMS is not granting any type of enforcement or penalty leniency based on “hardship.”

Access to Machine-Readable Files

This important section is listed on pages 1260 – 1271 of the Display Copy of the Final Rule. Mandated publication of the Charge Master has evolved into expanded data fields under Price Transparency regulations which has been enforceable since 1/1/21. The file, known as the “Machine-Readable File,” has been outlined in prior CMS rules and educational programs. Specific data requirements include basic Chargemaster (or other labeled charging file) data elements, charging data elements from other HIS applications (as applicable), payer-specific negotiated rates, cash price options, and high rate and low rate of the array of payer negotiated rates per charge item. More complicated nuances of the 2021 requirements were also discovered over the past year by our customers as they worked on their files.

CMS, as well as the press and industry watchdog groups, have alleged that the industry is largely non-compliant to the Machine-Readable file rules, with misses on multiple publication fronts. (More on this is included in upcoming posts.) Unfortunately, many hospitals as of this article in November 2021 have not implemented complete Price Transparency solutions. Companies assisting hospitals have been extremely busy, and business has not slowed as we round the corner to the new year.

In the 2022 Final Rule, CMS solidified a number of requirements related to the publication of the “Machine-Readable File.” In summary, CMS will be amending rules to:

“…specify that the hospital must ensure that the standard charge information is easily accessible, without barriers, including, but not limited to, ensuring the information is accessible to automated searches and direct file downloads through a link posted on a publicly available website.”

Many hospitals post the complete Machine-Readable file in a URL link that directly opens the complete file, as well as use more user-friendly front-end search tools. In discussing the “digitally searchable” and “easily accessible” requirements, CMS says:

“…in some cases,  it appears that hospitals have made standard charge data available online but embedded it in websites without any ability for users to easily or directly download a “single machine-readable file.”

In our own internal review of hospital websites, we have seen numerous organizations limiting user access by requiring check boxes stating agreement to specific terms. We even discovered one hospital website that required the user to view an informational webinar on hospital charges each time they wished to access pricing data. After extended discussion and comments on this year’s Rule, CMS is tightening guidelines on the Machine-Readable file access. CMS states it will:

“…prohibit practices … such as lack of a link for downloading a single machine-readable file, using “blocking codes” or CAPTCHA, and requiring the user to agree to terms and conditions or submit other information prior to access…”

CMS outlines the methods that prohibit web search engines from finding webpages for machine-readable files. The Final Rule discusses terms and functions such as blocking codes, NOINDEX, rel canonical tagging, disallow statements, and removing the URL from the search index. Since these instructions are new for 2022, we advise discussing the prohibited technology noted in the CMS language with your I.T. department, vendors, and hosting company(ies).

CMS discusses “barriers” to accessing the Machine-Readable File in the Rule and outlines non-permissible methods such as:

  • CAPTCHA and reCAPTCHA (“Completely Automated Public Turing test to Tell Computers and Humans Apart”) applications
  • Pop-up windows that require the user to agree to terms and conditions
  • Required agreement to legal disclaimers
  • File constructs and web forms that obscure access to the data or limit the download process  

On the Application Programming Interfaces (API) and file accessibility topic, CMS stated:

“…while hospitals are not prohibited under the Final Rule from making public standard charges via API technology, or using such technology for a consumer-friendly display of standard charges, hospitals must still make public their standard charges in a single machine-readable file. Under this finalized accessibility policy, such single machine-readable files must additionally be  accessible to automated searches and direct file downloads through a link on the hospital website.”

CMS expects that when used, APIs must provide supporting documentation on the use of the API to perform a single query to return all data in a single file. Commenters stated that CMS had not provided clarity on APIs or disclosure statements in earlier rule language and educational presentations.

The location of the Machine-Readable files varies for hospital and health system websites. Finding and accessing files continue to be challenging. CMS requested comments on the access topic in the Proposed Rule and provided more specific criteria for evaluating whether a hospital has displayed the machine-readable file in a “prominent manner.”

In the Final Rule, CMS recommended that hospitals:

  • “Review and use, as applicable, the HHS Web Standards and Usability Guidelines (available at: https://webstandards.hhs.gov/), which are research-based and are intended to provide best practices over a broad range of web design and digital communications issues.”
  • “Post a link to machine-readable file on a website where the value and purpose of the web page and its content is clearly communicated, for example, a dedicated price transparency webpage or a webpage devoted to patient billing or financing healthcare services.”
  • “While “breadcrumbs” (for example, secondary navigation aids) can be useful for navigating a website, they should not be relied upon in order for consumers to find the link to the machine-readable file. Instead, facilitate user navigation by including searchable terms on the webpage such as “price transparency,” “standard charges,” or “machine-readable file.”
  • “Ensure that the link to the machine-readable file is visually distinguished on the web page, and that its purpose is to open the single machine-readable file for a clearly indicated hospital location.”

In this section, CMS clarified the expected output of hospital online price estimator tools when used. (Estimators are allowed if hospitals choose to use a compliant online price estimator software tool in lieu of the required shoppable services consumer-friendly format.) CMS requested information and commentary from the public on the following topics:

  • “What best practices should online price estimator tools be expected to incorporate?”
  • “Are there common data elements that should be included in the online price estimator tool to improve functionality and consumer-friendliness?”
  • “What technical barriers exist to providing patients with accurate real-time out-of-pocket estimates using an online price estimator tool?”
  • “How could such technical barriers be addressed?”
  • “Input for future consideration related to the price estimator tool policies, including identifying best practices, common features, and solutions to overcoming common technical barriers”
  • “Whether we should require specific plain language standards, and, if so, what those plain language standards should be”
  • “Potential ways that we could highlight exemplar hospital price transparency practices”
  • “Recommendations for improving standardization of the machine-readable file”

Clarification of Optional Price Estimator Tool

CMS discusssed the option of using a price estimator in lieu of the Shoppable Services file, and clarified some areas that were unclear in previous regulations.

In summary, we found no significant changes to the Price Estimator regulations in this Final Rule section. However, hospitals should read the CMS language to understand its’ beliefs and interpretations related to the price estimator functionality.

Holliday & Associates commented on several of the price estimator as well as machine readable file sections during the 2022 Proposed Rule comment period. As with other Final Rules, all comments are available through the Federal Register website. Unfortunately, there were an overwhelming number of comments from the general public that failed to address the technical complexities and administrative burden that continue challenge hospitals.

No Excuses

Despite commenters’ requests for delaying enforcement of the new penalties until other price transparency mandates were finalized (e.g., “No Surprises Act” and “Transparency in Coverage”), CMS believed there was no reason for delay. It cited that since price transparency rules of 2020 were delayed to 1/1/21, there was sufficient time to collect and display the mandated data.

There was no mention in the Rule about the inaccurate and significantly-understated work effort and costs projected by CMS for price transparency compliance (where we believe CMS sorely missed the mark). Our comments suggesting that CMS compile and maintain ongoing reporting from hospitals of the costs and time dedicated to Price Transparency were not mentioned in the Rule. We feel that only the industry is able to provide the true costs to meet CMS mandate, and many industry experts agree that rulemaking was established on flawed man-hour and cost estimates.

Hospitals reading this updated 2022 Final Rule will need to evaluate not only their full compliance to the Price Transparency mandate but also consider the financial, compliance, and Public Relations implications. Excuses to disregard the Rule (or only partially comply) have been varied, including staffing shortages, financial distress, COVID-19 pandemic disruptions, and vendor delays. The flawed ‘we’ll wait and see’ delay (in retrospect) was a bad decision for many hospital leaders as they counted on legal relief based on AHA price transparency challenges in the Courts.

Now is the time to focus on complete and accurate CDM updates, strategic and rational pricing, and compliant price transparency efforts. Contact our offices if your team is looking for assistance with any of these areas.

Charge Management Take-Away

Our customers use ChargeAssist® to ensure accurate charge data and defensible pricing. Watch for future updates from our team as CMS continues to focus on Price Transparency compliance. If you’d like to learn more on basic Charge Master Management processes and techniques relative to charge integrity for price transparency, consider our 12 hour CDM Management Educational Program for Chargemaster Coordinators and Revenue Integrity Teams. Feel free to contact our Managing Partners, Rosemary Holliday at Rholliday@chargeassist.com or Bud Carroll at Bcarroll@chargeassist.com
to schedule a free consultative call to discuss your team’s specific Charge Management needs.

 

Holliday & Associates offers ChargeAssist®, an HFMA Peer Reviewed® Chargemaster auditing and resource tool for easily auditing, collaborating, and maintaining Chargemaster files. We also provide Charge Management & CDM Coordinator Education and CDM Reviews by a team of credentialed clinical, coding, and technical auditors.

Contact information: (800) 831-3323       Web Site: www.chargeassist.com or by e-mail at info@chargeassist.com

If you have immediate questions or concerns about the materials in this article, feel free to contact Rosemary Holliday & Associates Managing Partner at (530) 550-0865 or by e-mail at rholliday@chargeassist.com

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