CMS announces tighter price transparency enforcement as Congress grills Chiquita Brooks-LaSure on weak compliance

Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure’s first appearance before Congress since her 2021 confirmation hearings came with word that the agency will be tightening its leash on hospitals not complying with federal price transparency requirements.

The Biden administration official appeared before the House Energy and Commerce Committee’s Subcommittee on Health Wednesday to inform representatives’ lawmaking on healthcare costs, price transparency, pharmacy benefit manager (PBM) reform, hospital reimbursement and drug price negotiation.

The administrator came to the table highlighting her agency’s recent work in implementing the Inflation Reduction Act, which, starting this month, reduced seniors’ out-of-pocket drug costs. She also highlighted that CMS raised the penalties for hospital price transparency noncompliance late last year.

On the latter effort, she announced during the hearing that CMS is updating its enforcement process to shorten the time a hospital must come into compliance once a deficiency is identified. Hospitals will now have 90 days after a corrective action plan (CAP) is requested by CMS to be in full compliance, according to an accompanying fact sheet from the agency.

CMS will no longer be sending a warning notice to hospitals that don’t make any “good faith attempt” to satisfy price transparency requirements, Brooks-LaSure said, but will immediately issue a request that the hospital submits a CAP.

Finally, the agency will now automatically impose a civil monetary penalty on hospitals that fail to submit a CAP within 45 days of a request, or those that fail to come into compliance within 90 days of the CAP request, according to the fact sheet. The agency said it will re-review a hospital’s files to determine whether cited violations persist before imposing the penalty.

These new enforcement policies, along with other transparency efforts around payers’ prices and healthcare facility ownership, “will incentivize competition, improve consumer experience and result in additional savings for our healthcare system and for patients,” Brooks-LaSure told Congress.

“People should know the cost of their healthcare services and what they will be required to pay before they see care,” she said during the session’s opening statements. “CMS is working hard to get this information into their hands.”

As of April, CMS has issued more than 730 warning notices and 269 requests for CAPs to noncompliant hospitals, according to the fact sheet. It has also imposed civil monetary penalties on four hospitals.

Speaking to the lawmakers, Brooks-LaSure noted that CMS’ authority on hospital price transparency guidance is “very limited,” consisting of a single sentence within the statute.

“We’d love to work with you to increase our authority,” she said.

Subcommittee member Cathy McMorris Rodgers, R-Washington, responded to the administrator that her agency is “still not doing enough with the authority that you have” and questioned why CMS hasn’t extended its price transparency efforts to PBMs.

Brooks-LaSure responded that because CMS’ rules on prescription drugs “interacted” with language passed in the No Surprises Act, “we took a step and wanted to make sure it was coordinated.”

Another subcommittee member, Bill Johnson, R-Ohio, chastised CMS for issuing only four penalties amid academic and industry reports of substantial noncompliance since the requirements went into effect. These reports, he said, underscore industrywide confusion over price data standardization and the metrics CMS uses to determine whether an organization is compliant with the requirements.

“When cross-referencing hospital pricing data with insurance company data under transparency and coverage, patient advocate groups are finding real dollars and cents amounts and insurance company price data fields, whereas hospitals have posted in blanks dashes and hyphens,” Johnson said. “So it's not that they're not offering those services, because the insurance companies are saying they are. How can CMS consider hospitals that enter such data as compliant in good faith?”

The administrator said that CMS may not initiate enforcement in these cases because it does not review an organization’s published data until it receives a complaint that the hospital may not be compliant.

The shortened enforcement timeline announced Wednesday, along with ongoing work to define clear formatting standards for organizations to follow, are CMS’ efforts to address such issues, she said.

A report released last week by price transparency data startup Turquoise Health suggests that hospitals and payers alike are, after months of confusion, making strides toward compliance. Specifically, 84% of hospitals had posted a machine-readable file with pricing data as of the end of the first quarter of 2023, 74% posted negotiated rates data and 71% posted cash rates, according to the report.

Representatives made the most of Brooks-LaSure’s first return to Congress by putting the administrator on the record regarding hot-button healthcare issues such as CMS coverage of the Alzheimer’s disease drug Leqembi, site-neutral payments, physician-owned hospitals, impending Medicaid disenrollments and Republicans’ controversial Medicaid work requirements proposal.

Lawmakers heard the administrator’s responses and those from a following panel of provider, payer and pharma industry groups as they considered 17 proposed pieces of healthcare legislation. The subcommittee said it expects to hold a second panel regarding the proposals and issues at a later date.