CMS Final Rule Provision Aims to Improve Hospital Price Transparency

Thoughtware Article Published: Sep 18, 2018
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Effective January 1, 2019, the Centers for Medicare & Medicaid Services (CMS) will require hospitals to list their standard charges on a publicly available domain. Updating guidelines from Section 2718(e) of the Public Health Service Act, CMS aims to further improve the overall price transparency of hospital charges for patients with this requirement. The list of standard charges for items and services provided by the hospital, which could be in the form of the charge master itself or another form of the hospital’s choice, must be updated at least annually and available to patients via the internet in a “machine-readable format.” Under this provision, CMS hopes patients will not only better understand their financial obligation, but also can explore and compare charges at other hospitals.

The announcement of the CMS update drew comments of both support and concern. Some commenters who supported the guidelines indicated many states are already requiring that hospitals make their standard charges available to the public. On the other hand, opponents of Section 2718(e) said listing charge master prices likely would increase confusion as it would not inform patients of their out-of-pocket costs for services. CMS responded to concerns about the charge master information not being useful by encouraging hospitals to provide context surrounding the charge master information, as many hospitals are already doing by providing cost estimates and web-based tools to help patients estimate out-of-pocket costs. CMS stated that although the guidelines don’t require payer-specific information to be publicly available, it does not preclude hospitals from taking additional steps to provide this information to their patients. Some commenters noted that payer-specific charge information is proprietary and confidential, and making this information publicly available could undermine competition.

After careful consideration of public comments, CMS indicated it does not believe there’s a need to further alter the guidelines at this time. Accordingly, the CMS final rule will be in effect starting January 1, 2019. CMS will continue to address the broader price transparency initiative—including enforcement actions—in future rulemaking, but encourages hospitals to keep determining the best approach to making price transparency information available to consumers. Contact Jackie or your trusted BKD advisor for more information.

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