Historic $1 Million Fine – What to Know
What is the best way to enforce regulations in an already heavily regulated industry like healthcare? Is it the carrot a la non-profit tax breaks and government subsidies or is the stick the better option? We are about to find out. The Centers for Medicare and Medicaid Services (CMS) has long been the enforcer of penalties for healthcare’s bad actors when it comes to Medicare/Medicaid noncompliance. The same is supposed to be true for price transparency. However, until very recently, CMS has never issued a single civil monetary penalty against a healthcare provider for noncompliance with federal price transparency requirements.
On June 7, 2022, this changed and a (relatively) modest civil monetary penalty was levied against Atlanta-based Northside Hospital. The total fine for the two facilities (Atlanta and Cherokee) slightly exceeded $1 million ($883,180 and $214,320 respectively). It is usually quite a boon to be the first in the industry to accomplish something. However, being the first provider to be penalized for non-compliance with federal price transparency requirements to the tune of a cool million dollars is less than stellar. The monetary fine may seem low for such a large, tax-exempt entity but I would argue that the public display of Northside’s overconfident response1 and subsequent throttling by CMS is penalty enough.
This decision has been a while in the making but it was published on the heels of other rather novel initiatives by the federal agency and other proactive measures being taken in the industry. The No Surprises Act, Health Plan Transparency in Coverage, and Hospital Pricing Transparency are all designed to put more power back into the patient’s hands and it appears these programs really are less talk and more substance. Further, the cajoling by federal agencies of the three major credit reporting organizations has led to substantial changes in how medical debts are (or, rather are not) going to be reported on an individual’s credit report.
These actions all signify a major shift in the US health system. We are becoming less and less “just trust your doctor and pay your bill” people and more “why is this being charged and is this really medically necessary” consumers of medical care. This shift is vitally important in cost-containment paradigms. An informed consumer will make better choices. Better choices lead to better outcomes. Better outcomes lead to less expensive and better overall healthcare. Hopefully, the public admonishment of Northside is enough of a catalyst to force the many other non-compliant providers into compliance. Regardless, CMS has issued over 350 warnings for similar non-compliance since January 1, 2021. Of these, approximately 170 matters have been resolved/closed and nearly 160 hospitals have received demands for corrective action plans. Northside was among those in receipt of a corrective action plan demand and, notably, failed to return the plan satisfactorily resulting in said penalties and admonishment.
1 “CMS conducted a technical assistance call on January 11, 2022. During this call, the designated representative for Northside Hospital Atlanta confirmed that the previous violations had not been corrected and, in fact, the hospital system had intentionally removed all previously posted pricing files.”