Hospitals Face Penalties for First Time for Failing to Make Prices Public

Northside Hospital didn’t respond immediately to a request for comment.

The fines are the first to be issued. Research has shown that thousands of U.S. hospitals remained out of compliance months after the rules took effect. Only 6% of more than 5,200 U.S. hospitals displayed both of the two required price lists when the hospitals’ websites were evaluated between July and September 2021, according to an analysis of hospital transparency compliance published this month in the Journal of the American Medical Association.

The study found that roughly 14% of hospitals had posted only the comprehensive list, while roughly 30% had posted only the file with shoppable prices.

One of the lists is required to show all prices for all hospital services. The other is to show common services that can be scheduled in advance, for which consumers may choose to shop around.

“It’s a shockingly low number,” Sunita Desai, an assistant professor at New York University’s medical school and an author of the analysis, said of the tally of compliant hospitals.

Compliance remains spotty. Data from Turquoise Health Co., a startup working with the price-transparency data, shows that roughly 58% of hospitals were largely compliant as of this week.

Some noncompliant hospitals have said they needed more time to meet onerous technical requirements. Others objected to revealing prices to their competitors.

The Trump administration issued the rules in an effort to increase competition across the nation’s $1 trillion hospital sector. Employers that fund health insurance offered to workers as benefits have said they have struggled with the spotty compliance.

As of this month, CMS has issued 352 warning letters to hospitals, an agency spokeswoman said. Nearly 160 hospitals haven’t yet become compliant after CMS asked them to lay out steps for how they will do so, she said.

The Georgia hospitals didn’t set out steps to comply with the law after CMS requested a plan, the spokeswoman said.

The agency first asked the Georgia hospitals for plans last fall and followed up in January, with an early February deadline for response, according to a review by The Wall Street Journal of the CMS penalty letters sent to the hospitals. The hospitals failed to submit plans, the letters said.

Neither Northside Hospital Atlanta nor Northside Hospital Cherokee has published complete comprehensive price lists, as required, according to the letters. Northside Hospital Cherokee also failed to publish its price lists for shoppable services, one of the letters said.

In January, the hospitals told the agency they had removed previously posted price information, according to the letters. Northside Hospital Atlanta told the agency patients could call for cost estimates, one of the letters said.

The maximum penalty for failing to comply with the rules rose to $2 million per hospital in January, an increase from a maximum of $109,500 during the first year the rules were in effect.

Under last year’s maximum penalty, each hospital was fined $300 for each day they failed to comply. Under this year’s maximum penalties, Northside Hospital Atlanta’s fine increased to $5,360 for each day of noncompliance. Northside Hospital Cherokee’s penalty increased to $1,140 a day.

Write to Anna Wilde Mathews at anna.mathews@wsj.com, Melanie Evans at Melanie.Evans@wsj.com and Tom McGinty at tom.mcginty@wsj.com