CMS has finalized a rule requiring hospitals to offer price transparency and proposed another with similar provisions for payers.
The Department of Health & Human Services (HHS) and Centers for Medicare & Medicaid Services (CMS) have issued a new proposed rule and finalized another, both with the aim of empowering patients and healthcare consumers with price transparency information.
The rules, coming as a result of a June executive order from President Donald Trump calling for better price transparency, aim to equip patients with actionable cost information that can help patients better understand their healthcare.
“President Trump has promised American patients ‘A+’ healthcare transparency, but right now our system probably deserves an F on transparency. President Trump is going to change that, with what will be revolutionary changes for our healthcare system,” HHS Secretary Alex Azar said in a statement. “Today’s transparency announcement may be a more significant change to American healthcare markets than any other single thing we’ve done, by shining light on the costs of our shadowy system and finally putting the American patient in control.”
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The 2020 Outpatient Prospective Payment System (OPPS) & Ambulatory Surgical Center (ASC) Price Transparency Requirements for Hospitals to Make Standard Charges Public Final Rule specifically requires all US hospitals to make their standard charges publicly available.
This final rule solidifies what CMS and HHS mean by standard charges to include the following:
- The gross charge, or the chargemaster price for a certain product or service. This is the cost of a hospital service before any discounts of health insurance has taken effect.
- The discounted cash price. This includes any discounts a patient might receive if she pays her hospital bill with cash or a cash equivalent.
- The payer-specific negotiated price. This is the price after a patient’s health insurance has kicked in. Hospitals must make available these costs as they pertain to their contracts with individual healthcare payers.
- The de-identified minimum negotiated charges, or the lowest cost the hospital has negotiated with a third-party payer.
- The de-identified maximum negotiated charges, or the highest cost the hospital has negotiated with a third-party payer.
As noted above, these rules will apply to all hospitals in the US and must be made available on a machine-readable format. Hospitals must provide an explanation for any service codes it might use, make these lists prominent on a hospital website or web portal, ensure this information is easily accessible, and update this data at least annually.
Hospitals will also be responsible for displaying price transparency information for at least 300 “shoppable” services, meaning services that can be schedule with a hospital a month ahead of time. Examples of shoppable services might include scheduling a birth or certain types of surgery.
CMS says it plans to monitor and enforce this rule foremost by hearing complaints from individuals or entities that say they cannot access the price transparency information. CMS will deem a hospital as non-compliant if it has failed to meet any of the criteria included in the rule. Failing organizations will receive a corrective action plan from CMS, but if they fail to follow that plan may face a $300 per day fine and a public penalty.
CMS and HHS have also proposed the Transparency in Coverage rule, which aims to improve transparency about patient financial responsibility and cost sharing. Specifically, the proposal requires most group health plans, including self-insured plans, and health insurance providers to disclose price and cost-sharing information to participants, beneficiaries, and enrollees, CMS said.
Health plans will be responsible for providing this information in real time using a digital tool, as well as to issue a paper version of the cost-sharing transparency upon member request. The rule would also require health plans to display their negotiated rates with different hospitals on their own websites.
Ultimately, these proposals aim to empower healthcare consumers with the cost information needed to make informed healthcare decisions. Using price transparency data, consumers may shop around for care in facilities that they believe are high value.
HHS has also proposed a provision that would allow payers to create incentives for members who comparison shop. HHS will allow health plans to incentivize price shopping by promising a shared savings model, in which the member and the payer will benefit from any save costs. Payers may include those savings as a part of their medical loss ratios.
While the OPPS final rule and the Payer proposed rule have significant implications for hospitals and payers alike, CMS ultimately aims for these regulations to impact the healthcare consumer, according to CMS Administrator Seema Verma.
“Under the status quo, healthcare prices are about as clear as mud to patients,” Verma said in a statement. “Thanks to President Trump’s vision and leadership, we are throwing open the shutters and bringing to light the price of care for American consumers. Kept secret, these prices are simply dollar amounts on a ledger; disclosed, they deliver fuel to the engines of competition among hospitals and insurers. This final rule and the proposed rule will bring forward the transparency we need to finally begin reducing the overall healthcare costs. Today’s rules usher in a new era that upends the status quo to empower patients and put them first.”
Source: Patient Engagement HIT