Hospital Price Transparency – Final Rule

The final rule provides details on the requirements for making public discounted cash prices, payer-specific negotiated charges and de-identified minimum and maximum negotiated charges for at least 300 ‘shoppable’ services, publicly available in a consumer-friendly format effective January 1, 2021.

The Health & Human Services (HHS) rules released Nov. 15,  follow Trump’s June 24 executive order regarding price and quality transparency in the healthcare market.

As of January 1, 2021,  consumers will be able to review pricing for the 300 hospital services – 70 which are identified by CMS, the remaining are chosen by the hospital.

Another final rule from HHS also published Nov. 15 gives patients access to their insurers’ cost-sharing liability and disclose the insurers’ negotiated rates for in-network providers and allowed amounts paid for out-of-network physicians, according to Medical Economics.

CMS Administrator Seema Verma,

Under the status quo, healthcare prices are about as clear as mud to patients. 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.

The American Hospital Association (AHA), Association of American Medical Colleges (AAMC), Children’s Hospital Association (CHA) and Federation of American Hospitals (FAH) are expected to file a legal challenge opposing the new transparency rules.  In a joint statement, they summed up their position,

Today’s rule mandating the public disclosure of privately negotiated rates between commercial health insurance companies and hospitals is a setback in efforts to provide patients with the most relevant information they need to make informed decisions about their care. Instead of helping patients know their out-of-pocket costs, this rule will introduce widespread confusion, accelerate anticompetitive behavior among health insurers, and stymie innovations in value-based care delivery. America’s hospitals and health systems have repeatedly urged CMS to work with hospitals, doctors, insurers, patients, and other stakeholders to identify solutions to provide patients with the information they need to make informed health care decisions and know what their expected out-of-pocket costs will be. We continue to stand ready to work with CMS to achieve this goal.

Read more from Medical Economics

Get more details from Kaiser Health News

Get the Fact Sheet from CMS

Get the press release from HHS

Below is a summary of the transparency rule:

• Defines the following terms and words
  • Hospital
  • Standard charges include:
    • Gross charges
    • Payer-specific negotiated charges
    • Discounted cash price
    • De-identified minimum negotiated charge
    • De-identified maximum negotiated charge
  • Items and Services
• Requirements
  • Make public all of our standard changes (see list under Standard Charges for specifics) for all items and services online in a single digital file in a machine-readable format
    • Description of each item must be included
    • Must be displayed PROMINENTLY and easy to locate and access
      • Per the rule “displayed prominently” would mean that the value and purpose of the webpage and its content is clearly communicated, there is no reliance on breadcrumbs to help with navigation, and the link to the standard charge file is visually distinguished on the webpage
    • Data must be updated annually
  • Make public standard charges for at least 300 “shoppable services” – 70 services determined by CMS, and 230 chosen by the hospital
  • Maintain a consumer friendly, internet-based price estimator tool to determine the estimated cost of a specified ‘shoppable’ service