Price Transparency Requirements Announced

As directed by President Donald Trump’s executive order on improving price and quality transparency in American healthcare, the U.S. Department of Health and Human Services (HHS) recently announced the Centers for Medicare & Medicaid Services (CMS) is issuing two rules that take steps to increase price transparency.

One of the rules is the final calendar year (CY) 2020 outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) price transparency requirements for hospitals to make standard charges public final rule. The second is the transparency in coverage proposed rule. Both the final and proposed rules require that pricing information be made publicly available.

The American Hospital Association (AHA) stated it will be joining with other hospital associations and member hospitals to file a legal challenge to the rule on the grounds that CMS has exceeded its power. THA will follow any ligation filed by these groups in order to keep members informed as needed via email, as well as possible webinars and conference calls as this continues to unfold.

In response to the executive order, HHS and  the U.S. Departments of Labor and the Treasury are issuing a proposed rule called “Transparency in Coverage” that would require most employer-based group health plans and health insurance issuers offering group and individual coverage to disclose price and cost-sharing information to participants, beneficiaries and enrollees up front.

If finalized, the proposed rule would require health plans to:

  • Give consumers real-time, personalized access to cost-sharing information, including an estimate of their cost-sharing liability for all covered healthcare items and services, through an online tool that most group health plans and health insurance issuers would be required to make available to all of their members, and in paper form, at the consumer’s request.
  • Disclose on a public website their negotiated rates for in-network providers and allowed amounts paid for out-of-network providers.

In addition, the Administration is finalizing a rule that will require hospitals to provide patients with clear, accessible information about their “standard charges” for the items and services they provide, including through the use of standardized data elements.

CMS defines “hospital” to mean all locations, including outpatient departments, of organizations licensed by a state or local law as a hospital and that serves the general public, including critical access hospitals, inpatient psychiatric facilities and inpatient rehabilitation facilities.

The final rule will require all hospitals to make their standard charges public in two ways beginning in 2021:

  • Comprehensive Machine-Readable File: Hospitals will be required to make public all hospital standard charges for all items and services on the Internet in a single data file that can be read by other computer systems, including:
    • Gross charges
    • Payer-specific negotiated charges The amount the hospital is willing to accept in cash from a patient
    • The de-identified minimum and maximum negotiated charges

The file must include additional information such as common billing or accounting codes used by the hospital (such as healthcare common procedure coding system (HCPCS) codes) and a description of the item or service to provide common elements for consumers to compare standard charges from hospital to hospital.

  • Display of Shoppable Services in a Consumer-Friendly Manner: Hospitals will be required to make public payer-specific negotiated charges, the amount the hospital is willing to accept in cash from a patient for an item or service, and the minimum and maximum negotiated charges for 300 common shoppable services in a manner that is consumer-friendly and update the information at least annually.
    • Shoppable services are services that can be scheduled by a healthcare consumer in advance, such as x-rays, outpatient visits, imaging and laboratory tests or bundled services like a cesarean delivery, including pre- and post-delivery care.
    • The requirements for the consumer-friendly file are the information must be made public in a prominent location online that is easily accessible, without barriers, and it must be searchable. Item and service descriptions must be in plain language and the shoppable service charges must be displayed and grouped with charges for any ancillary services the hospital customarily provides with the primary
      shoppable service.
    • CMS added a provision in the final rule that would exempt hospitals that have established out-of-pocket cost estimator tools from complying with this section of the final rule, as long as the tool is publicly available and provides estimates for at least 300 shoppable services, including the 70 required ones.

In order to ensure hospitals comply with the requirements, the final rule provides CMS with new enforcement tools, including monitoring, auditing, corrective action plans and the ability to impose civil monetary penalties of $300 per day.

In response to public comments, CMS is finalizing that the effective date of the final rule will be Jan. 1, 2021, to ensure that hospitals have the time to be compliant with these policies.

For a fact sheet on the rules, click here.

For a fact sheet on the transparency in coverage proposed rule (CMS-9915-P), click here.

The final rule (CMS-1717-F2) can be viewed here.

The proposed rule (CMS 9915 P) can be viewed here.

For more information, contact Amanda Newell at THA, 615-401-7441.