CMS has finalized a rule
requiring hospitals to offer price transparency and proposed another with
similar provisions for payers.
By Sara Heath
November 18, 2019
- 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.”
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.”
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