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Hospital Price Transparency Rules Now in Effect

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Starting January 1, 2019, hospitals have been reporting their standard charges online in an easily accessible format, due to a new rule from the Centers for Medicare and Medicaid Services (CMS).

With the passage of the Affordable Care Act, hospitals were required to release a list of prices for their items and services to the public; however, the initial rulemaking required that either the charges themselves be made public, or the hospital’s policy for allowing public review of the hospital’s charges upon request be made public.  As a result, certain hospitals did not disclose their standard charges online.  In April 2018, CMS released proposed rulemaking that would make it easier for members of the public to access hospital charges.  Effective January 1, 2019, CMS requires that hospitals make public on the internet a list of their standard charges for items and services, in a machine-readable format, and to update that list at least annually.  In addition to acute care / general hospitals, the rule applies also to inpatient rehabilitation facilities, psychiatric hospitals, critical access hospitals, and sole community hospitals.

In its preamble to the final price transparency rule, CMS stated that it continued to have concerns since the passage of the Affordable Care Act due to the public having insufficient information on hospital charges.  CMS noted that patients faced challenges such as unexpected bills from physicians who provided services at in-network hospitals, as well as facility fees and physician fees associated with emergency room visits.  CMS challenged certain commenters’ claims that making charges public would result in patients being less likely to seek treatment, noting that hospitals could pair those prices with quality information in order to give members of the public a comprehensive view of services and their costs.

Following publication of the final price transparency rule, CMS released a series of frequently asked questions, addressing items such as what constitutes machine readable format and what items and services should be included in the price list.  Drugs and biologicals are included among those items whose prices must be disclosed.  Hospitals have the choice of disclosing the chargemaster data itself, or another means, as long as the information is in machine readable format.

Hospitals must now undertake efforts to meet the price transparency rule, and should consider how best to make the public aware of their standard charges for items and services.  Hospitals may consider the benefit of disclosing pricing information in conjunction with quality measures so that the public can consider cost simultaneously with outcome results.  CMS has noted that price transparency efforts are unlikely to end with the publication of the final rule.  Rather it is considering potential future actions to further its objective of having hospitals engage in consumer-friendly communication of charges.

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