Update to Regulations for Price Transparency

Over the summer we discussed in a blogpost, “Executive Order Reduces HHS Time for Transparency,” the order issues from the current administration to make pricing more accessible for patients to be able to shop around for common outpatient procedures.

November 15th, CMS announced two proposed regulations intended to follow through on this order. One is targeted towards hospitals, the other to health plans.

Hospital Services

First is an expansion to the rule that went into place this year for hospitals to publicly display their prices to patients. Based on the final rule, beginning in 2021, hospitals will be required to disclose “standard charges” for “all items and services.”

Standard charges are defined by:

  • Gross charges (the full cost of the procedure billed out to CMS and commercial insurers)
  • Discounted cash price (prices that will be paid by those paying cash for services)
  • Payer-specific negotiated charge (the price negotiated between the provider and the private payer)
  • Identified minimum and maximum negotiated charges (the lowest and highest negotiated fee among all third-party payers.

This is to be done for ALL services and items in what they call a “machine-readable” format. They will also have to disclose the above standard charges for a minimum of 300 “shoppable” services in a “consumer-friendly” format. CMS has identified 70 services that must be a part of that list. These “shoppable services” are any procedures that can be scheduled in advance. The price list must be updated annually.

Health Plans

Also, in this rule, CMS is requiring health plans to share what their out of pocket costs will be for all services covered by the plan. Health plans will also need to disclose their pricing information in a “machine-readable” format for data collection and employer review. This will include in-network prices and the historical average of out-of-network pricing.

In this regard, CMS is asking the public for ideas on how they would like this information to be made presentable. This rule would go into effect for plan years beginning on or one year after the finalization of the rule.

CMS is currently collecting comments for the next 60 days, so be sure to make your voice heard with any questions or concerns about this rule.

Donna White

By Donna White, Principal Consultant and Owner of Legacy Consulting Services and Legacy Billing Solutions in Montgomery, Alabama.

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