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What You Need to Know About the Impending Deadline for Hospital Pricing Transparency

Learn what's required for your hospital.

In August, the Centers for Medicare & Medicaid Services (CMS) finalized new rules requiring hospitals to publish standard hospital charges to the internet. This is actually an amendment to Section 2718(e) of the Affordable Care Act which required hospitals to make such a list public, but most hospitals generally only provide the list by individual request.

CMS’s stated intent is to make information more widely available in an attempt to empower consumers to make better decisions when they seek healthcare. This includes providing information to compare competing care-delivery options as well as reducing unexpected high bills after receiving medical services.

While providers have made great strides in increasing their transparency in the areas of quality and experience, pricing transparency has been a far more difficult problem to solve. As a result, CMS is requiring the following initial step (emphasis added):

“…effective January 1, 2019, we are updating our guidelines to require hospitals to make available a list of their current standard charges via the internet in a machine readable format and to update this information at least annually, or more often as appropriate. This could be in the form of the chargemaster itself or another form of the hospital’s choice, as long as the information is in machine readable format.”

The final rule includes significant insight from the comment period, particularly around a number of issues where CMS asked for feedback in the proposed rule. In addition, CMS has put together a Frequently Asked Questions (FAQ) document to help us understand what’s required for hospitals.

  • You must publish the information from the hospital’s current standard charges from its chargemaster.
  • This information should be updated at least yearly or more often as appropriate.
  • They understand the limitations of the usefulness of chargemaster data. Hospitals are welcome to provide more actionable information for consumers such as out-of-pocket cost calculators in addition to the required chargemaster information.
  • The information is required to be in a machine readable format. CMS has not proposed a specific format or file structure to use but has made it clear that a PDF is not acceptable.
  • There does not appear to be any requirement that this is presented in a human readable format. CMS, in fact, suggests some formats such as XML which are often difficult for consumers to view.
  • Publishing this information through some other platform, as occurs in several states with their own transparency initiatives, does not satisfy the new CMS requirements nor does collaborative efforts with payers to improve pricing transparency.
  • No hospitals in the United States are exempted from these requirements.

CMS questions the viewpoint that, for many, chargemaster data is not only irrelevant, but publishing such data is likely to create greater confusion among health consumers. However, they do encourage health systems to take steps above and beyond the new requirements.

With this in mind, CMS suggests that future steps are likely: “We also are considering other potential actions that would be appropriate…to further our objective of having hospitals undertake efforts to engage in consumer-friendly communication of their charges to help patients understand what their potential financial liability might be for services they obtain at the hospital, and to enable patients to compare charges for similar services across hospitals.”

What Do We Need To Do To Comply?

By January 1, 2019, all U.S.-based hospitals must make a machine readable file of their standard charges available on the internet.

No format is specifically defined, but the regulations do mention XML and CSV file formats as acceptable and PDF files as unacceptable.

The file must include “…a list of the hospital’s standard charges for items and services provided by the hospital, including for diagnosis-related groups established under section 1886(d)(4) of the Social Security Act.”

There are no requirements about the naming of this file or where it should be located. There is also no guidance as to whether this file must be available from your primary web presence, a microsite, or some other online platform — only that it is available on the internet.

Remember, these new regulations go into effect on January 1, 2019! If you have questions, you should consult your organization’s legal counsel.

What You Need to Know About the Impending Deadline for Hospital Pricing Transparency