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CMS hospital price transparency: Are you compliant?

September 8, 2021 / 3 min read

As of July 2021, less than 6% of hospitals were compliant with the CMS hospital price transparency rule. Crackdowns are coming, and fines aren’t the only thing you’ll risk if you fail to comply. Here’s what to know now.

Under the new price transparency rule that took effect on Jan. 1, 2021, the Centers for Medicare & Medicaid Services (CMS) now requires hospitals to create a price listing for more than 300 services for patients, as well as a machine-readable file (MRF) that includes standard charges for all items and services. This information will make it easier for consumers to shop and compare prices across hospitals and estimate the cost of care before going to the hospital.

What you risk when failing to comply

CMS announced it would conduct hospital price transparency audits starting in January 2021, and the Biden administration has made it clear that they’re taking this seriously. According to a report published by, of the 500 hospitals sampled in the report, less than 6% are currently compliant with the new rule. For hospitals that don’t comply, CMS may issue a warning notice, request a corrective action plan, and impose a civil monetary penalty ($300 per facility per day for noncompliance with the rule’s requirements) and publicize the penalty on a CMS website. Although CMS hasn’t announced its audit results, early research indicates many organizations have yet to fully comply with the requirements outlined in CMS guidelines.

Fines aren’t the only thing you risk when you fail to comply with this new rule. An important goal of the rule is to foster healthy competition across hospitals — if patients can compare prices, hospitals will have to improve either their prices or their offerings to remain competitive. As price listings become more widely available, consumers are likely to pick a different provider if your prices are still under wraps. Worse yet, it could harm consumers’ trust in your organization and damage your reputation if you don’t take steps to improve transparency in your pricing.

It could harm consumers’ trust in your organization and damage your reputation if you don’t take steps to improve transparency in your pricing.

What should you do about it?

Management will need to determine whom within their organizations should be responsible for ensuring compliance with the rule, review processes in place supporting compliance, and evaluate ongoing monitoring of compliance. Revenue cycle, managed care, IT, and compliance contacts from across the organization should be included in discussions.

Internal audit and compliance should consider testing areas for compliance or should consider including auditing around this area in audit plans.

A CMS-designated checklist exists for hospitals to use to help determine compliance with the requirements.

Some items for organizations to consider for evaluating posted MRFs include:

  1. Do you have an MRF publicly posted, and if so, is it readily accessible?
  2. Is the MRF digitally searchable, in an approved file format, and saved in the appropriate naming convention?
  3. Is the MRF free of charge, accessible without a registration process, and available without the submission of personally identifiable information?
  4. Does the posted MRF contain all the required elements per the CMS-designated checklist?

Get started

Given the complexity of pricing, complying with this rule could be a challenge for your organization. To avoid repercussions, we suggest you get started as soon as possible. The good news is you don’t need to have all the answers right away. As was stated in the proceedings of a court challenge to the rule, “Some accurate information is better than no information at all.” If a hospital is unable to determine a price, they have the option of listing it as “not available.” One hopeful result of the rule is that it will lead to reduced complexity in pricing, so down the road, hospitals may be able to replace any unavailable prices with accurate costs to consumers.

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