The High Stakes of Hospital Price Transparency Compliance

The conversation surrounding hospital price transparency is amplified and more urgent than ever.

Since the Hospital Price Transparency Rule went into effect in 2021, the Centers for Medicare & Medicaid Services (CMS) have significantly increased their enforcement efforts for compliance. Complacency is no longer an option for healthcare organizations looking to protect their reputation, avoid financial penalties and maintain patients' trust.

Let’s dive into the current state of price transparency enforcement, the risks providers face by remaining non-compliant and actionable steps healthcare leaders can take to align with CMS requirements.

CMS Enforcement Is Rampant — And It’s Getting Tougher

CMS has ramped up its enforcement efforts to ensure hospitals comply with regulations that make financial information accessible to patients.

As of January 2025, 17 hospitals have been fined for non-compliance, with two more being sanctioned as recently as December 2024. In Texas, a medical center was fined $50,711, while another faced a $44,251 penalty. These cases underscore a simple fact—price transparency violations are on CMS’s radar, regardless of the size of the facili

The financial repercussions can be steep. Earlier in 2024, a large Florida-based hospital was slapped with an $871,122 fine for alleged violations. But these penalties represent just part of the problem.

An Office of Inspector General (OIG) audit revealed that 37% of hospitals are non-compliant with the transparency rule, urging CMS to take this more seriously. The OIG has recommended stricter enforcement, a call echoed by industry experts who suggest penalties should outweigh the cost of compliance to discourage inaction.

CMS has already enhanced its comprehensive reviews 3X from 30-40 per month to over 200 reviews per month and is leveraging automated audit tools to identify non-compliance more efficiently.

CMS Price Transparency Enforcement Actions

The message is clear: hospitals must prioritize compliance or face serious consequences.

The Risks of Non-Compliance

Non-compliance isn’t just about fines—it can disrupt operations, damage your hospital’s reputation and strain relationships with patients, payers and regulators, among other potential consequences.

1. Financial Penalties That Add Up

With CMS increasing audits and penalties, the financial risks of non-compliance are higher than ever. Beyond fines, costs can quickly escalate into lost revenue, higher administrative expenses and even legal action.

For smaller or rural hospitals, one penalty could jeopardize stability and growth, forcing tough decisions about staffing or services. Taking proactive compliance steps can help protect hospital’s finances.

2. Reputational Risk

Patients are well aware of their rights, will act swiftly and expect transparency and fairness in pricing. Patients are the new payer and commonly use price transparency to guide their care and coverage decisions. Failing on these fronts can result in losing patient trust and loyalty as organizations can be viewed as out of touch with patients in a highly competitive market. A strong reputation isn’t just marketing—it’s key to attracting and retaining patients. Compliance demonstrates accountability and commitment to patient-focused care.

3. Operational Inefficiencies

Ignoring compliance or relying on outdated methods can create inefficiencies, complexity and extra administrative work. Hospitals using antiquated systems for machine-readable files (MRFs) or transparency face repeated audits, workflow disruptions and wasted resources – all of which can affect patient care and staff satisfaction.

4. Weakened Payer Relationships

Transparency isn’t just for patients—it’s essential across the healthcare ecosystem. Non-compliance can strain payer relationships, making collaboration and negotiations harder. Payers want to work with healthcare organizations that demonstrate accountability and meet standards. Compliance strengthens these partnerships, streamlines reimbursement and positions hospitals as a trusted community partner.

A proactive compliance strategy not only helps hospitals thrive but can ensure care is delivered to the patients served in hospital’s communities.

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Where Hospital Solutions Are Falling Short

Even with the importance of compliance, many providers are struggling to meet CMS’s stringent demands.

• Overwhelming Complexity
  Building fully compliant MRFs requires expertise in consolidating data from multiple sources, including charge description masters (CDMs), current procedural terminology (CPT) codes, Healthcare Common Procedure Coding System (HCPCS) codes, diagnosis-related group (DRG) codes, modifiers and many others.

• Incomplete Solutions
  Some widely used electronic health record (EHR) platforms struggle to achieve the precision and compliance demanded by CMS.

• Resource Constraints
  Many hospitals are forced to hire additional contract labor to piece together MRFs, creating unsustainable workflows. Others resist the rules entirely, risking audits and penalties.

A study published in Health Affairs suggests increasing penalties to incentivize compliance, as some hospitals weigh the fines against the cost of meeting transparency standards. Additionally, confusion surrounding CMS’s requirements leaves hospitals mired in uncertainty, causing further delays.

A Path Forward for Compliance

The complexity of CMS's price transparency mandate underscores the importance of partnering with healthcare industry experts to simplify compliance. Partnering with an industry expert that specializes in transparency solutions can significantly simplify the process, ensuring both compliance and operational efficiency.

Best Practices for MRF Creation

A third-party partner offers purpose-built tools to address the unique challenges of MRF compliance, including the ability to:

• Generate reports in the specific CMS-required format

• Consolidate data from disparate sources like CDMs, CPTs, HCPCs and DRGs

• Accurately calculate prices against payer contracts using advanced algorithms

• Produce machine-readable reports that adhere to CMS’s latest guidelines

Simplify Shoppable Services

Using an online estimation tool can represent proxy substitute compliance with the CMS requirement for providing costs for 300 “shoppable services.” These tools help hospitals efficiently calculate out-of-pocket costs by incorporating variables such as insurance benefit details and ancillary services.

Key Steps for Healthcare Organizations

To navigate the complexities of CMS transparency requirements, healthcare organizations need a clear strategy. By taking proactive steps, hospitals can not only maintain compliance but also build trust and improve patient care.

1. Invest in a Fully Compliant and Robust Solution

Choose a third-party solution that handles every aspect of CMS requirements. Ensure g the platform supports both MRFs and shoppable services eliminates redundancies and reduces stress on staff.

2. Aggregate All Relevant Data

Invest in a platform that integrates the chargemaster, payer contracts, claims and historical charges to create a transparent pricing model compliant with CMS mandate requirements.

3. Form a Taskforce

Develop a cross-disciplinary internal team composed of RCM, finance, clinical department heads, compliance and IT experts to monitor and manage the hospital's adherence to the transparency mandate.

4. Leverage Scalable Technology

Technology that is both innovative and scalable provides frictionless outputs, thus streamlining long-term compliance and avoiding penalties.

5. Think Beyond Compliance

While compliance is the goal, transparency also builds trust with patients and payers. Providers need to seize this opportunity to differentiate their organizations as institutions that value patient-centric care and clear, upfront communication about a patients’ potential financial responsibilities.

  RELATED: Enhancing Patient Payment Experience with Accurate Payment Estimations

The Cost of Complacency

Falling short of transparency regulations puts healthcare organizations on a slippery slope with CMS sanctions. The cost is far greater than fines—it jeopardizes reputations, financial stability and trustworthiness.

Fortunately, easier. With a reliable solution, facilities can strengthen payer and patient relationships and position themselves as trailblazing leaders in healthcare transparency continuum.

What’s Next?

At FinThrive, we understand the complexities of the healthcare landscape. Our advanced transparency solutions allow hospitals to comply with CMS’s mandates effortlessly. Ensure compliance while fostering patient trust—connect with us today to partner with FinThrive on your price transparency strategy.