After Months Of Warnings, CMS Hands Out Its First Fines To Hospitals Failing On Price Transparency

CMS issues first price transparency fines to 2 Georgia hospitalsSource: Fierce Healthcare, by Dave Muoio

Eighteen months after its final rule on price transparency went into effect, the Centers for Medicare and Medicaid Services issued its first penalties to a pair of Georgia hospitals that did not update their websites or reply to the agency’s warning letters.

 

Northside Hospital Atlanta and Northside Hospital Cherokee have been issued civil monetary penalties of roughly $880,000 and $214,000, respectively, according to letters published on CMS’ Hospital Price Transparency website. Both hospitals are part of the same health system.

The agency calculated the penalties based on the hospitals’ size and how long their websites were non-compliant (up to $300 per day). The hospitals may submit a request for a hearing to have their penalties appealed.

“CMS expects hospitals to comply with the Hospital Price Transparency regulations that require providing clear, accessible pricing information online about the items and services they provide,” Director of Medicare Meena Seshamani, M.D., said in an email statement provided to Fierce Healthcare. “This enforcement action affirms the Biden-Harris Administration’s commitment to making health care pricing information accessible to people across the country and we are committed to ensuring that consumers have the information they need to make fully informed decisions regarding their healthcare.”

Since Jan. 1, 2021, CMS has required hospitals to post a comprehensive machine-readable list of their services and prices as well as a patient-friendly tool to help shop for 300 common services.

Hospitals that are not compliant with the requirements receive warning letters from CMS requesting they submit a corrective action plan to amend their websites.

 

The agency began delivering those letters in April, saying at the time it was hesitant to issue civil monetary penalties due to the harm that publicly naming noncompliant hospitals could bring to those organizations.

In the warning letters, CMS said it had conducted reviews of their websites, requested corrective action plans and delivered warning notices to both hospitals last fall. CMS issued warning to the hospitals in April and May, according to the letters, which neither hospital responded to.

CMS has issued a total 352 warning letters to hospitals as of this month, according to a CMS spokesperson. Among these, 171 received case closure notices after addressing the agency’s citations while 157 remain non-compliant, the spokesperson said.

Industry-wide compliance with the federal transparency requirements has been spotty to date. Only 14.3% of hospitals were compliant with both major components of the mandate one year after it went into effect, according to a review by PatientRightsAdvocate.org.

 

A study published in JAMA earlier this week corroborated low compliance as of the six to nine months after the rule went into effect, noting that hospitals in low-concentration healthcare markets, urban hospitals and those with lower per patient-day revenue were more likely to be in compliance.

Hospitals and health systems say their adherence struggles are the result of the high cost and complexity of implementation. They’ve also pointed to the final rule’s language, which they say is vague and difficult to interpret.

“Many organizations are not investing beyond the bare minimum requirements, and they don’t plan to do more until there is further clarity around the regulations and the expectations going forward,” KLAS Research wrote in an April report polling 66 hospital revenue cycle leaders on price transparency compliance.

Record Fines Might Mean California Is Finally Serious About Improving Medi-Cal

Record Fines Might Mean California Is Finally Serious About Improving Medi- Cal | California HealthlineSource: Kaiser Health News, by Bernard J. Wolfson

Is California getting tougher on health plans that participate in Medi-Cal, the state’s insurance program for low-income residents?

A few weeks ago, state regulators imposed record $55 million in fines on L.A. Care, California’s largest Medi-Cal managed-care plan, for failing to ensure adequate care and allowing treatment delays that threatened enrollees’ health. Patient advocates hope the move signals stricter enforcement against other Medi-Cal insurers, which have many of the same shortcomings for which the regulators just fined L.A. Care.

Twenty-five managed-care plans across the state provide care for nearly 12 million of the more than 14 million Californians enrolled in Medi-Cal, and the state is often accused of failing to hold the plans accountable for subpar care. Medi-Cal members are among the state’s most vulnerable people: They can face language and cultural barriers and have disproportionately high rates of chronic illness.

The state Department of Health Care Services, which runs Medi-Cal, is drafting a new managed-care contract, scheduled to take effect in 2024, that officials say will improve care by holding participating health plans to higher standards. The state hopes to reduce health disparities and improve health outcomes by tightening surveillance and enforcement.

“They are trying to do more, and that’s really positive,” says Abbi Coursolle, senior attorney at the National Health Law Program in Los Angeles. “Obviously, they have a lot more to do.”

DHCS and the state Department of Managed Health Care, which also regulates Medi-Cal managed-care plans, launched coordinated investigations of L.A. Care, based in part on a 2020 Los Angeles Times report that highlighted long, sometimes deadly, delays in care at facilities run by the Los Angeles County Department of Health Services. That agency operates the county’s public safety-net system and contracts with L.A. Care to provide care for hundreds of thousands of the health plan’s members. In their investigations, state regulators also relied on information that L.A. Care reported to them.

That they relied on these sources, Coursolle says, raises questions about the effectiveness of their own surveillance and auditing.

On March 4, the Department of Managed Health Care hit L.A. Care with a $35 million penalty — more than triple its highest previous fine. The Department of Health Care Services levied $20 million, nearly eight times its earlier record.

The state cited L.A. Care for more than 100,000 violations, including late responses to patient complaints and appeals, delayed or denied authorizations for necessary medical care, and failure to ensure the county health services agency complied with patient care regulations. The California Department of Public Health, which regulates hospitals and other health care institutions, didn’t respond to a question about whether it’s investigating any of the county’s medical facilities.

In announcing the fines, state agency directors said: “The magnitude of L.A. Care’s violations, which has resulted in harm to its members, requires immediate action.” The health plan has 2.4 million Medi-Cal enrollees.

“The recent enforcement action against L.A. Care signals that DHCS intends to exercise our authorities to protect our Medi-Cal enrollees,” department spokesperson Anthony Cava told me in an email.

L.A. Care’s CEO, John Baackes, says the plan is not contesting the findings. “What we are contesting is the amount of the fines, which we believe are unreasonable,” Baackes said. The dispute could take months, or even years, to settle.

In a statement released after the fines were announced, L.A. Care noted Medi-Cal’s notoriously low payments to providers and said the penalties create “yet another financial hurdle for a public health plan that is a crucial part of the health care safety net.”

Although L.A. Care has generated millions of dollars in profits in recent years, it reported a loss of $132 million in fiscal year 2020. But the plan can weather the fines. At the end of last year, its tangible net equity — a key measure of solvency — was seven times as high as the minimum required by law.

The violations described by regulators are painfully familiar to Theresa Grant, a Culver City resident I wrote about late last year who has struggled to find relief from a debilitating pain in her rib cage. The violations are “horrific,” she says, “and I think it’s very true.”

But she believes the specialist physicians who have been unable or unwilling to help her deserve a big share of the blame. “You know how long I’ve been dealing with my problem,” she told me. “It’s been over a year now, and not a damn thing is being done.”

Despite the significant penalties levied on L.A. Care, consumer advocates and some state lawmakers think California needs the authority to levy even larger ones.

A bill sponsored by the consumer advocacy group Health Access would increase many of the fines that state health plan regulators can impose at least tenfold. Supporters say the legislation, SB 858, is needed because the amount the department can legally levy on health plans hasn’t been raised in some cases since 1975.

“We want to make sure that insurance companies do not view these fines as just the cost of doing business,” says the bill’s author, state Sen. Scott Wiener (D-San Francisco). “By raising them, they become less a cost of business and more an actual incentive to follow the law.”

The fines imposed on L.A. Care are outliers because of their size, which was determined in part by the sheer number of violations. “For every fine like that, there are many that are dramatically lower,” Wiener says. “I wouldn’t want to rely on one case and say, ‘Oh, no problem, because they got a big fine.’”

Another important factor in holding health plans’ feet to the fire, Wiener says, is consumer complaints, which can help bring problems to the attention of regulators — and to the plans themselves.

But a report last year by KFF showed that consumer appeals of denied care are exceedingly rare.

If you have a problem with your health plan or want to appeal a delay or denial of coverage, a good place to start is the Department of Managed Health Care (888-466-2219 or HealthHelp.ca.gov).

The state also has an ombudsman for Medi-Cal managed care (888-452-8609 or MMCDOmbudsmanOffice@dhcs.ca.gov).

You can also try the Health Consumer Alliance (888-804-3536 or www.healthconsumer.org), which assists people in public and private health plans. It offers free advice, provides legal services, and can help you get your documents in order for an appeal.

Regulators and health plans alike frequently say they are working on behalf of the patient. So if you’re not getting the care you need, stand up and be part of the solution.

IRS Extends ACA Reporting Deadlines

IRS-ACAThe IRS issued a two-month extension for employers and issuers to report on offers of health coverage and coverage provided. The deadlines for reporting to the IRS by paper have been extended to May 31 or June 30 for electronic submissions. Greatland Corp. advises employers to continue with preparations as if the deadlines had not been pushed back. Bob Nault, Greatland’s CEO said that waiting until the last minute can lead to failure to file 1095 forms for the 2015 tax year, which could bring penalties of up to $1 million on small businesses. Maximum penalties to payers for failure to file correct information returns, including furnishing an incorrect name/TIN to IRS are $3 million/year ($1 million for small businesses).

Janice Kreuger, ACA subject matter expert for Greatland said, “We are hearing from a lot of businesses that think the IRS will not enforce fines for the 2015 reporting year. This is simply not the case. The IRS will not fine employers and insurers for mistakes. However, they still need to file and file on time, even with the extended deadlines.

The IRS imposes the following fines for returns filed beginning January 1, 2016:

  • $50 per information return if you file correctly within 30 days of the due date.
  • $100 per information return if you file correctly more than 30 days after the due date, but by August 1.
  • $250 per information return if you file after August 1 or you do not file required information returns.
  • $500 for a return for intentional disregard with no maximum penalty.

IRS Fines Threaten HRAs

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The Council for Affordable Health Coverage and 25 allied organizations urged Congress to take up the Small Business Healthcare Relief Act (H.R. 2911/S. 1697) in the remaining days of the congressional session. The bill would allow employers to offer health reimbursement arrangements (HRAs) without being subject to outrageous IRS fines. Joel White, president of the Council said, “We are in a race to the finish to save Americans’ health benefits.”

Many small business employers have reimbursed employees for individually purchased health coverage and related medical expenses through HRAs. But since July 1, the IRS has deemed these arrangements impermissible, fining employers that provide HRAs $100 per day, per employee. The ACA fine is one-eighteenth that sum for larger businesses that provide no coverage at all. White said, “With penalties that could amount to $36,500 per employee, or $500,000 total, employers will be forced to draw back their helping hands.”

ACA tax penalties to rise in 2015, 2016

People who opt out of health insurance coverage as required under the Affordable Care Act will face average fines of either $325 or 2% of income in 2015 and about $1,100 in 2016. The Internal Revenue Service will collect the penalties, which for 2014 are set at either $95 per person or 1% percent of household income above the tax-filing threshold. About 26 million people qualify for one of the many exemptions, but they might not be aware exemptions exist, tax experts say. Star Tribune (Minneapolis-St. Paul, Minn.)/The Associated Press (12/29)

DMHC Fines Kaiser Over Access to Mental Health Services

The California Department of Managed Health Care (DMHC) issued a $4 million fine against Kaiser for not providing enough access to mental health services. DMHC Director Brent Barnhart, said, “The Department’s actions are a result of both the seriousness of the deficiencies and the failure of Kaiser to promptly correct them.” DMHC says that Kaiser does not do the following:
• Make sure that quality assurance systems accurately track, measure, and monitor the accessibility and availability of providers.
• Monitor its provider network to ensure that appointments are offered within regulatory timeframes.
• Provide effective action to improve care where deficiencies are identified.
• Provide accurate and understandable mental health education materials, including information about  the availability and optimal use of the plan’s mental health care services.

The plan’s mental health educational materials, including frequently-asked-question  sheets, Website postings, and new patient presentations included inaccurate information that could dissuade an enrollee from pursuing medically necessary care. The DMHC also found examples of member materials that, while consistent with the law, did not convey coverage in language understandable to the average member.

The DMHC will conduct a follow-up survey in October to make sure that Kaiser has corrected the deficiencies and is complying with the law. The full survey report can be found here:http://www.dmhc.ca.gov/library/reports/med_survey/surveys/055bh031813.pdf.

Last Updated 06/29/2022

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