Final rule ups financial penalties to hospitals that ignore price transparency regulation

The Centers for Medicare and Medicaid Services is making modifications to the hospital price transparency regulation designed to increase compliance, after initial analysis strongly suggests there is suboptimal compliance beginning January 1, 2022. CMS released the Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Final Rule on Tuesday.

CMS is increasing the civil monetary penalties to a minimum of $300/day that will apply to smaller hospitals with a bed count of 30 or fewer, and a penalty of $10/bed/day for hospitals with a bed count greater than 30, not to exceed a maximum daily dollar amount of $5,500.

Under this approach, for a full calendar year of noncompliance, the minimum total penalty amount would be $109,500 per hospital, and the maximum total penalty amount would be $2,007,500 per hospital.

WHY THIS MATTERS

This approach to scaling the CMP amount retains the current penalty amount for small hospitals, increases the penalty amount for larger hospitals and affirms the Administration’s commitment to enforcement and public access to pricing information, CMS said.

CMS is updating the 2022 OPPS payment rates for hospitals that meet applicable quality reporting requirements by 2%. This update is based on the projected hospital market basket increase of 2.7%, reduced by 0.7 percentage points for the productivity adjustment.

The final rule retains 340B payment cuts.

The American Hospital Association said the payment cuts to 340B hospitals threatens their ability to care for their patients and communities and goes against Congress’ intent in establishing the 340B program nearly 30 years ago.

“These cuts are enabled by a lower court’s deference to the government’s inaccurate interpretation of the law, which is at the center of the legal issue the Supreme Court will review later this month at our urging,” said Stacey Hughes, executive vice president of the AHA. “Continuation of these cuts will undoubtedly exacerbate the strain on 340B hospitals, especially as the COVID-19 pandemic continues.”

Dr. Beth Feldpush, senior vice president of Policy and Advocacy for America’s Essential Hospitals said Tuesday, “Today’s decision by the Centers for Medicare and Medicaid Services to finalize outpatient drug payment cuts of nearly 30% for hospitals in the 340B Drug Pricing Program distorts Congress’ intent for the program and endangers our healthcare safety net.”

THE LARGER TREND

In addition to updating the payment rates, the final rule includes policies to address the health equity gap, to fight the COVID-19 pandemic, to encourage transparency in the health system and to promote safe, effective and patient-centered care, CMS said.

Twitter: @SusanJMorse
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