By letter dated April 13, 2021 (Letter), the Democratic and Republican leadership of the House Committee on Energy and Commerce and its Subcommittee on Health, wrote United States Health and Human Services Secretary, Xavier Becerra, urging HHS to provide robust oversight and enforcement of the Hospital Price Transparency Rule (Rule).
The Rule, which became effective January 1, 2021, requires hospitals to make available to the public a machine readable and searchable file containing a list of “standard charges” for all hospital items and services as well as to display 300 shoppable services of the hospital in a consumer-friendly format. “Standard charges” is defined to include for each item and service the gross charge, the discounted cash price, all payer-negotiated charges and the de-identified minimum and maximum negotiated charges. The U.S. Court of Appeals for the D.C. Circuit had upheld the Rule against a legal challenge by the American Hospital Association and others, in an Opinion dated December 29, 2020, American Hospital Association v. Azar (No. 1:19-CV-03619), which we addressed in a previous blog post.
The Letter recites that, despite the Rule’s January 1, 2021 effective date and the fact that hospitals had over a year to prepare for implementation, a recent study found 65 of the nation’s 100 largest hospitals were not in compliance with the Rule. Of those hospitals 18% had not posted any files, and 82% did not include the payer-specific negotiated rates. Other studies found some hospitals are providing consumers a price estimator instead of the required list of standard charges and the payer negotiated charges, while other hospitals are providing data in a non-useable/searchable format, failing to provide the codes for items and services, or blocking the information from appearing on such engines.
Under the Rule, non-compliant hospitals face graduated enforcement, starting with a written warning, a requested corrective action plan for material noncompliance, and a civil monetary penalty of up to $300 per day per hospital (or a maximum civil monetary penalty of $109,500 per year).
In the Letter, the House leaders urge HHS to ensure full compliance, to conduct regular audits of hospitals, and to revisit the available enforcement tools, including the amount of the civil monetary penalties.
The Rule reflects a governmental focus on transparency in health care price information. In keeping with that focus, a final rule (referred to as Transparency in Coverage), requiring health insurers and group health plans to make public a variety of pricing information, was released on October 29, 2020, and is set to become effective in part on January 1, 2022 and in part on January 1, 2023.
Foley is here to help you address the short- and long-term impacts in the wake of regulatory changes. We have the resources to help you navigate these and other important legal considerations related to business operations and industry-specific issues. Please reach out to the authors, your Foley relationship partner, or to our Health Care Practice Group with any questions.