The Centers for Medicare & Medicaid Services (CMS) finalized a “price transparency” rule that requires hospitals to make detailed charge data – including payer-specific negotiated charges – available for all inpatient and outpatient services. Additionally, the final rule mandates that hospitals make “consumer-friendly” charge information available for at least 300 “shoppable” services. While CMS deferred implementation to 2021, rather than 2020 as contemplated in the proposed 2020 Medicare Hospital Outpatient Prospective Payment System rule, the agency expanded the cost data elements that hospitals must report. Four major hospital associations have announced their intention to challenge the rule in court. These hospital associations allege that the rule exceeds the Administration’s authority and would “introduce widespread confusion, accelerate anticompetitive behavior among health insurers, and stymie innovations in value-based care delivery America’s hospitals and health systems.”
The final rule requires hospitals to make available online in a machine-readable file the hospital’s gross charges and payer-specific negotiated charges for all items and services provided in the inpatient and outpatient department setting. Each payer-specific negotiated charge must be clearly associated with the name of the third party payer and plan. Additionally, the final rule expands the required data elements to include discounted cash prices and the de-identified minimum and maximum negotiated charge for all items and services provided by the hospital.
Second, hospitals must make public in a consumer-friendly manner their payer-specific negotiated charges for at least 300 “shoppable” services – defined as a service that can be scheduled by a health care consumer in advance. CMS identified 70 shoppable services (the same as identified in the proposed rule) and the hospital must select the rest. The required cost elements include: payer-specific negotiated charges; discounted cash price; de-identified minimum and maximum negotiated charge for each shoppable service (and any ancillary service); and whether the charges differ based on whether the service is provided in the inpatient or outpatient setting. Hospitals in violation of these price transparency provisions would be subject to corrective action plans and civil money penalties of up to $300 per day.
Additionally, the Administration issued a separate proposed rule that would require group health plans and health insurance issuers in the individual and group markets to disclose certain cost-sharing information to participants, beneficiaries, or enrollees, through an internet-based self-service tool (and in paper form upon request). This information would include a personalized estimate of the individual’s cost-sharing liability for covered items or services furnished by a particular provider. Furthermore, plans would be required to disclose in-network provider negotiated rates and historical out-of-network allowed amounts through two public machine-readable files. Finally, the Department of Health and Human Services proposes enabling issuers offering group or individual health insurance coverage “to receive credit in their medical loss ratio calculations for savings they share with enrollees that result from the enrollee’s shopping for, and receiving care from, lower-cost, higher-value providers.” Comments on the proposed rule will be accepted until January 14, 2020.