Nothing quite like a final rule going into effect to get you springing out of bed in the morning! In case you’ve been on vacation, the CY 2024 Hospital Outpatient Prospective Payment System (OPPS) Final Rule’s second wave of machine-readable file (MRF) requirements for hospitals went into effect on 7/1/24. The requirements are lengthy but we’re not here to list them out for you (we’ve already done that!), instead we’re here to talk about what these mean for hospitals, especially on the heels of CMS’ first civil monetary penalty (CMP) post-7/1, which was issued last week.

New hospital MRFs are uniform and more detailed

Before jumping into enforcement, it’s important to note the new regulations outline new schemas and new required data elements for hospitals. Gone are the days when every hospital MRF was unique compared to its peers. Now, a required format and even more rate detail is necessary for a file to be compliant. Beyond the technical lift required to achieve such granularity, the additional data illuminates a new level of hospital transparency when compared to the initial requirements outlined in the Hospital Price Transparency Rule, effective 1/1/21.

This new data specificity helps the industry better examine healthcare costs like any other free market. We believe that accurate and comprehensive MRF data is foundational to getting the upfront cost of care to patients. In the three and a half short years that we’ve had access to hospital rate data, our ability to create a foundation to calculate the cost of care in the US has grown exponentially. As more and more hospitals and payers prioritize the creation of Patient Estimate Tools, the additional data from the new MRFs (such as contract methodology and detailed algorithms) can drastically improve the quality of those estimates.

Automated enforcement

When we step back and absorb all these measures from the 10,000-foot view of compliance and enforcement, we see a clear picture of how the 2024 requirements allow for more consistent and automated file review, assessment, and, where needed, corrective actions by CMS.

Beyond the schemas, assessing whether or not hospitals are complying with the new 2024 requirements is a largely binary process. For example, CMS can ask:

  • Does Hospital A meet the .txt file requirement?
  • Does Hospital A have the required footer?
  • Did Hospital A publish an MRF in a required schema?

The ability to check  “yes” or “no” to determine compliance makes it much easier for CMS to automate enforcement.

We are already seeing this in action: CMS issued a CMP on July 3, 2024, and the violations included “...failure to ensure that the public website the hospital selected to host its machine-readable file establishes and maintains, in the form and manner specified by CMS a .txt file in the root folder”

Previously, CMS reported it was auditing 200 hospital files a month. Assessing compliance was made more difficult by the lack of a uniform hospital MRF template and the “place your files in any easy-to-find-location” directive. With the right framework in place, CMS has ramped up automated auditing efforts, resulting in an uptick in warning letters and corrective action plans for non-compliance.

What does this mean for hospitals?

Think of this like running a red light before and after traffic cameras existed. Before cameras, a police officer needed to be present to see you run that red light for you to get a ticket. That meant it was most likely that the blatant offenders would get caught first. For MRFs, blatant offenders could look like not even posting a file or posting a file completely devoid of negotiated rates. Now, red light cameras make catching a driver running a light much, much easier. The automated system can issue you a ticket without a single officer involved in the entire process. Thanks to these new binary requirements, CMS has already started auditing and enforcing compliance on the heels of the 7/1 date.

If you’re a hospital or health system and you have questions about the new requirements, send us a note!