By: Karina Gonzalez
On November 15, 2019 Centers for Medicare and Medicaid Services (CMS) issued a final rule requiring hospitals to publicly disclose “standard charges, including payer-specific negotiated rates for items and services. Hospitals will be required to comply by January 1, 2021. The proposed rule is subject to 60 days of comment.
The final rule requires hospitals to make public in a machine-readable file online all standard charges (including gross charges, discounted cash prices, payer-specific negotiated charges) for all hospital items and services. It requires hospitals to de-identify minimum and maximum negotiated charges for at least 300 “shoppable” services.
On November 15, CMS also issued a transparency rule that would require health plans to give consumers in real-time, personalized access to cost-sharing information. Payers are also required to disclose on a public website negotiated rates for in-network providers and allowed amounts paid to out-of-network providers.
The final rule provides that CMS can enforce noncompliance with these price transparency provisions through audits, corrective action plans and civil monetary penalties of $300 per day. Hospitals will have an appeal process to the ALJ (Administrative Law Judge).
Whether this move will achieve increased price transparency and lower costs for consumers is yet to be determined. Likewise, the disclosure of health insurance rate information for in-network and out-of-network providers is intended to promote competition in the healthcare industry, drive innovation and support price-conscious decision making. Helping providers to achieve better reimbursement rates from health plans because of increased transparency and competition would be a great outcome, although in today’s market this may be highly unlikely.
If price transparency is finalized we can expect court challenges from both the Hospitals and health plans.