CMS Finalizes Rule on Hospital Price Transparency Requirements

Last Updated: Nov 20, 2019

medical-billThe Centers for Medicare and Medicaid Services (CMS) plans to require hospitals to publicize their charges for inpatient and outpatient services. In a final rule issued on Nov. 15, 2019, CMS outlined its framework for increasing price transparency.

The hospital price transparency rule is scheduled to take effect on Jan. 1, 2021. Hospitals would be required to share prices for items or services in connection with an inpatient admission or an outpatient department visit for which the hospital has established a standard charge.

The rule includes provisions to address issues such as:

  • Defining standard charges – These charges are to include the following: gross charge, discounted cash price, payer-specific negotiated charge, minimum negotiated charges, and maximum negotiated charges.
  • How to make standard charges public online – The rule sets regulations for including descriptions of services and codes, ensuring that the data is accessible, making updates at least annually, and properly displaying the file.
  • Making public at least 300 charges that CMS defines as “shoppable services,” which are services that can be scheduled by consumers in advance.
  • Providing CMS with enforcement tools such as monitoring, auditing, corrective action plans, and the ability to impose civil monetary penalties of $300 per day for non-compliance.

A coalition of hospital groups including the American Hospital Association is planning to file a legal challenge to the rule. In a press release, the groups said they believed the rule did not achieve the goal of providing patients with out-of-pocket cost information and thus could be confusing to patients.

Find more information on the hospital pricing final rule in this CMS fact sheet.

Proposed Rule on Insurer Price Transparency

The Department of Health and Human Services, along with several other federal agencies, have also issued a proposal on price transparency for group health plans and health insurance issuers in the individual and group markets.

The proposed rule would require health insurance providers to:

  • Provide patients with accurate estimates of any out-of-pocket costs they must pay to meet their plan’s deductible, co-pay, or co-insurance requirements. 
  • Display price information to patients and other stakeholders via a publicly available website.

The health insurer price transparency proposal will be published online via the Federal Register. Public comments will be accepted.

Get HHS’ fact sheet on the proposal here.

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