In its recently established final rules under CMS-1694-F on the Medicare prospective payment systems for the inpatient prospective payment system (IPPS) and long-term care (LTCH PPS) settings, the Centers for Medicare & Medicaid Services (CMS) has finalized a Hospital Price Transparency Rule that will require hospitals to publicize a list of their standard charges online in a machine-readable format. Under this final rule, hospitals are required to publish a list of their standard charges online in a machine-readable format and to update this information at least annually. This final rule is expected to generate approximately 3% payment increase for acute care hospitals. A medical billing company providing services to hospitals must also be up-to-date with such changing payment guidelines.

While encouraging hospitals to provide context surrounding the chargemaster information, the agency has clarified that it is not requiring at this time that any information be published in a payer-specific manner. However, many providers are still unsure how they will publish their pricing information in compliance with the CMS rule. According to a survey by PMMC, a recent survey of 150 healthcare participants that varied in size ranging from hospitals with 100 acute care beds to multi-facility healthcare systems, most health providers are concerned about how to address this CMS mandate. The poll highlights that despite the January 1, 2019 deadline for the rule,

  • 92% healthcare providers are either “somewhat” or “very” concerned about how their charges will be perceived by the public
  • 43% of healthcare providers don’t yet know how they will address this rule
  • Only 29% of healthcare providers recognize the need to post additional pricing information in addition to the standard charge master
  • 22% said they would post chargemaster prices only
  • Only 8% respondents said they were not concerned by the hospital price transparency rule

CMS’ current rule alters the requirements previously established by Section 2718(e) of the Affordable Care Act that each hospital operating within the United States shall for each year establish (and update) and make public a list of the hospital’s standard charges for items and services provided by the hospital.

The agency has also published FAQs regarding requirements for hospitals to make public a list of their standard charges via the internet.

The National Law Review has reported that statessuch as California and Colorado have taken steps to promote hospital price transparency. While California’s “Payers’ Bill of Rights,” require hospitals to either post an electronic copy of the charges for its services on the hospital’s website, or make a written or electronic copy available at the hospital’s location, Colorado law mandates a healthcare provider must make available to the public, either electronically or by posting on the provider’s website, the healthcare prices of at least the 15 most common services rendered by the provider. However, many states still lack extensive hospital price transparency statutes.

With such guidelines and rules, it is getting clear that CMS is pushing the healthcare industry towards a retail-like model to help consumers price shop for healthcare services. Seema Verma, the CMS Administrator has said that, “If you’re buying a car or pretty much anything else, you’re able to do some research. You’re able to know what the quality is. You’re able to make comparisons. Why shouldn’t we be able to do that in healthcare? Every healthcare consumer wants that.”

Online healthcare price shopping is also not something new. The 2018 UnitedHealthcare Consumer Sentiment Survey has pointed out that more than one-third of respondents (36%) have used the internet or mobile apps during 2017 to compare the quality and cost of medical services. It is also noted that hospitals posting just the standard chargemaster run the risk of misleading patients into inaccurate pricing, because patients rarely pay the full listed chargemaster price. Even while providing such pricing details to patients, providers must make sure to focus on medical eligibility verification to verify each patient’s eligibility and benefits to ensure they will receive payment for services rendered.