Five Colorado hospitals recevied warning letters from the federal Centers for Medicare and Medicaid Services saying their price transparency files weren’t up to par.
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Federal law requires hospitals to post a file with all of the prices they charge insurers or people paying cash, as well as either an estimating tool or a shorter list of “shoppable” services. Between April and June, CMS sent warning letters to 519 hospitals nationwide about problems the agency had spotted with their files and tools.
CMS didn’t demand a “corrective action plan” from any of the Colorado hospitals, indicating they had at least attempted to comply, according to a statement from the agency. In some cases, a corrective action plan request comes a few months after a warning, if a hospital hasn’t addressed CMS’s concerns.
The five Colorado locations that received letters were Children’s Hospital Colorado in Aurora; Centennial Peaks Hospital, a psychiatric facility in Louisville; CommonSpirit Penrose Hospital in Colorado Springs; Vail Health Hospital; and Mt. San Rafael Hospital in Trinidad.
As of the end of May, Children’s and Centennial Peaks had made changes that satisfied CMS, according to the agency’s database. The other three hospitals’ cases were still open at that point.
Children’s and Vail Health said CMS found small technical errors, while Centennial Peaks and Penrose hospitals both attributed the warning letters to the files using the wrong names for those facilities. Mt. San Rafael Hospital didn’t respond to questions about its warning letter.
CMS can issue fines for price transparency violations, but has only done so when hospitals either refused to post anything or blew off repeated warnings. Since enforcement started in 2022, the agency issued fines to 28 facilities, none of which are in Colorado.
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Price transparency “remains a priority for this administration,” the agency said in a statement. “CMS will continue to monitor compliance and take appropriate enforcement action to ensure hospitals provide consumers with meaningful pricing information as required by law.”
The idea behind price transparency is that patients will use the information to choose a lower-cost provider, perhaps after some nudging from their insurance carrier or employer. A 2024 poll found were confident they could find out what a hospital stay would cost in advance, however.
Colorado requires hospitals to post their prices and forbids them from using aggressive debt-collection techniques, such as suing patients, if they don’t. The original law in 2022 allowed patients to sue if their hospital was out of compliance, while an update a year later gave the attorney general’s office power to enforce the transparency provisions.
Price files often aren’t easy to use. One insurer may pay a flat amount for a hospital stay, while another uses a daily rate and still another agrees to reimburse a certain percentage of the hospital’s “sticker price” charges. Different billing codes also create challenges for people who want to compare what a procedure would cost in a hospital versus an outpatient surgery center.
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