Hospitals Required to Publish Prices or Face Significant Penalties

Earlier this year a federal rule was implemented to impose stiffer penalties on hospitals that conceal the costs of services and procedures. The mandate for pricing transparency is being exercised through the imposition of harsher monetary penalties against hospitals that fail to comply. The Price Transparency rule stems from a 2019 executive order that proposed rules to make healthcare pricing data available. The executive order directed the U.S. Department of Health and Human Services Secretary (“HHS”) at the time, to address the opacity of healthcare pricing data and now requires hospitals to list their standard charges on their websites.

Currently, the maximum penalty for noncompliance, effective as of January 1, 2021, is $109,500 per year for large hospitals – which are defined by the government, as hospitals containing 30 or more beds. The new proposal released by the Centers for Medicare & Medicaid Services, increases the penalty fines to $2 million per year as the maximum fine for noncompliant large hospitals. The proposed provision to increase the penalties is attributed to the lack of compliance with the federal rule that became effective earlier this year. The newly appointed Secretary of the HHS has expressed that the administration will not tolerate continued noncompliance.

Additionally, the Biden administration proposed more stringent regulations for the use of special coding embedded in hospital webpages, that currently prevents Google and other search engines from displaying price pages directly in the search results. Many hospitals have been utilizing embedded code in their disclosure webpages to inhibit search engines from indexing the information.

The impetus for such assertive tactics is motivated by the efforts to make healthcare available to all. The implementation of higher penalties is used to dissuade hospitals from concealing the costs of services and procedures and allow patients to make informed decisions about the healthcare options available to them. Similar guidance for health insurance companies was issued by federal regulators in April 2021, requiring price transparency rules to go into effect in 2022. Insurers will also be prohibited from using website coding to block healthcare pricing data from search results.

The Price Transparency Rule for hospitals has been gaining significant attention and may lead to stiffer regulations for pricing transparency rules in other healthcare institutions, including surgery centers, physician practices and other healthcare facilities. Additionally, there is the possibility the Price Transparency Rule will affect the demand for medical services and agreements with insurance providers.

How Frier Levitt Can Help

Frier Levitt is a national boutique law firm focused exclusively on Healthcare and Life Sciences. The extensive expertise of the firm in the ever-changing realm of healthcare regulations is unparalleled. Our 20 years of experience in this area has equipped us with the ability to protect the interests of our clients to the fullest. Contact us today to learn more about how you can protect your rights as they pertain to compliance with federal regulations relating to price disclosure for medical services.

 

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