Moving Toward More Transparent Hospital Pricing

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One of the issues that have concerned many healthcare consumers in the U.S. is a lack of transparency when it comes to the costs associated with services in hospitals. To help alleviate those concerns, the Centers for Medicare and Medicaid Services (CMS) began requiring more transparent price listings for hospitals, which went into effect on January 1, 2021.

Which Healthcare Providers Are Affected?

Most institutions in the U.S. that are licensed as hospitals or are otherwise approved as meeting the applicable licensing requirements that govern hospitals are required to prominently post their standard charges on a website that is easily accessible to the public.

Shoppable Services for Consumers

The goal of the new documentation requirements is to offer U.S. consumers a shoppable list of services that can be acquired at a specific hospital and their respective costs.

There must be a list of at least 300 services that a patient can schedule in advance through the hospital. If the hospital in question offers fewer than 300 services, all services offered must be listed.

Services must be described in plain language that average patients can understand. Additionally, related services must be grouped together.

Hospitals must list the different pricing available, which includes payer-specific negotiated prices, discounted prices offered to those who pay in cash, and the minimum and maximum negotiated charges.

Machine-Readable Files

Additionally, each hospital must provide a single machine-readable file that contains information relevant to pricing.

The information that is included in the file must include:

●      gross charges

●      discounted cash prices

●      charges negotiated by payers

●      de-identified minimum and maximum negotiated charges.

Penalties for Noncompliance

The transparent pricing requirements went into effect on January 1, 2021. Since then, CMS has monitored and enforced its price transparency requirements.

Hospitals that do not comply may initially be issued a warning notice. CMS may request a corrective action plan in which the hospital will explain how they intend to update their website to meet transparency requirements. CMS may also impose a civil monetary penalty and publicize any penalties to hospitals on a website maintained by CMS.

Hospitals that are subject to monetary penalties may appeal the decision within 30 calendar days. During an appeal, information that is considered will include, the hospital's postings of its standard charges, if those are available, any materials the hospital previously submitted to CMS in a timely manner, which includes documents related to corrective actions and corrective action plans, and materials CMS used to assess and monitor the hospital's compliance.

Keeping Patients and Regulators Up to Date

As long as hospitals make the required information available, they should be able to meet the requirements that will keep them compliant with the regulations. Additionally, transparent pricing in language that patients can understand will allow for more informed healthcare consumers who feel empowered to make the right choices for them.