Becker's Hospital Review

18 CFO / FINANCE Higher penalties for undisclosed prices won't sway all hospitals to comply, consultant says By Alia Paavola W hile CMS' move to increase the penalty for hospitals that don't publish their prices will make some facilities more likely to comply with that re- quirement, it may not sway the country's largest health systems, Caroline Znaniec, a managing director at advisory firm CohnReznick, told Becker's Hospital Review in November 2021. e CMS final price transparency rule, which took effect Jan. 1, 2021, aims to make hospi- tal pricing information readily available to patients to compare costs and make more informed healthcare decisions. To aid with this, hospitals in the U.S. are required to post both a machine-readable file with the negoti- ated rates for all items and services and dis- play the prices of 300 shoppable services in a consumer-friendly format. An analysis published in July 2021 of 500 hos- pitals conducted by nonprofit Patient Rights Advocate found that 94.4 percent of hospitals haven't met at least one of the requirements since the rule took effect in January 2021. To boost compliance, CMS in November 2021 released a final rule modifying the hospital price transparency noncompliance penalty for 2022. Hospitals with 30 beds or fewer will continue to pay up to $300 per day of noncom- pliance, but hospitals with more than 30 beds will pay $10 per bed each day. e maximum penalty is capped at $5,500 per day. A full year of noncompliance with the regulation would result in a maximum penalty of $2 million per hospital. According to Ms. Znaniec, the new noncom- pliance fee of up to $2 million per year will likely persuade midsize hospitals and health systems to comply with the regulation, but not the larger facilities and health systems. "For the extremely large health systems, that amount is not really that large of a fine," Ms. Znaniec said. "I'm hearing from some sys- tems that $2 million is nothing to them." However, for midsize facilities with 100 to 250 beds, the boosted noncompliance fee has their attention, as it's going to be a bigger hit to their bottom line, Ms. Znaniec said. e main reason larger hospitals and systems are not complying with the regulation is that they don't want to disclose their negotiated rates, Ms. Znaniec explained. "ey have the resources to comply," Ms. Znaniec said. "ey don't want to lose market share." ere's also the perspective that providers are worried because payers want to see what their health system has negotiated with rival insurers to determine whether they are pay- ing more for certain services and if they can drive reimbursement down. Overall, the higher noncompliance fee from CMS will make more midsize hospitals com- ply, but it may not sway the larger facilities that may think keeping their rates private will im- prove their market share, Ms. Znaniec said. n California hospital files for bankruptcy By Ayla Ellison and Alia Paavola A 106-bed hospital in Watsonville, Calif., and its parent com- pany filed for bankruptcy protection. Watsonville (Calif.) Community Hospital and its parent com- pany, Halsen Healthcare, filed for Chapter 11 bankruptcy Dec. 5, 2021. The hospital has between $10 million and $50 million in as- sets and liabilities within the same range, according to its bankruptcy petition signed by the hospital's chief restructuring officer. Documents filed in the case detail the goals of the bankruptcy fil- ing, including keeping the hospital open, saving about 650 jobs and selling the hospital to a buyer that can support the healthcare needs of the community. Hospital leaders said in the bankruptcy documents that they have negotiated a tentative agreement with the Pajaro Valley Health- care District Project, and the nonprofit group has agreed to act as the stalking horse purchaser of the hospital. The group is made up of the County of Santa Cruz, the City of Watsonville, Commu- nity Health Trust of Pajaro Valley and Salud Para La Gente and was formed to explore the purchase of the hospital. At the time of publication, the deal was still in the works. In 2021, the hospital lost about $32.5 million, according to bankruptcy documents. n HCA to build 3 hospitals in Florida By Ayla Ellison H CA Healthcare, a 183-hospital system based in Nashville, Tenn., is expanding its footprint in Florida. The for-profit hospital operator has 47 hospitals in Florida and plans to start building three new acute care hospitals in the state in 2022. HCA Healthcare is building a 90-bed hospital in Gainesville, a 100- bed hospital in Fort Myers and a 60-bed hospital near The Villages, according to a November 2021 news release. The three new hospitals will be part of HCA Florida Healthcare. "Florida continues to experience rapid population growth, and the addition of these new hospitals will help HCA Florida Healthcare meet the increas- ing need for acute care services in these areas," HCA Healthcare CEO Sam Hazen said in the news release. "We are excited to expand our presence in the state and enhance our ability to care for patients." n

• Cover