AHCP Blog

New Hospital Transparency Rule

Written by AHCP | 4/19/19 11:58 PM

A new rule intended to increase price transparency went into effect January 1st of this year. The rule, issued by the Centers for Medicare and Medicaid Services (CMS) on August 2, 2018, requires “hospitals to make publicly available a list of their standard charges or their policies for allowing the public to view this list upon request…on the Internet in a machine-readable format.”

As HEALTHPAYER INTELLIGENCE reports, this new requirement is part of an “effort to increase price transparency and empower consumers to make informed decisions about their care” and requires “hospitals to update their public price lists at least annually.”

While CMS administrator Seema Verma admits that “the agency has no means of enforcing its new price transparency rule and that there are currently no penalties for hospitals that fail to comply according to Healthcare Dive, Verma does believe this is an ”important first step toward lowering costs by getting patients the information they need to compare prices.”

As NBC News reports, the new transparency rule, while a step in the right direction, may not be all that useful to most healthcare consumers. Instead of posting the actual prices that patients will be charged under their health plan, hospitals will post the “list price” for their services. Something NBC News contributor Dr. Natalie Azar equates to the “manufacturer’s suggested retail price.”

Nonetheless, CMS is hoping for voluntary cooperation from hospitals. In a Frequently Asked Questions piece about the new rule, CMS says that the agency “encourages hospitals to 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.” They go on to point out that hospitals are “not precluded from posting quality information or price transparency information in addition to its current standard charges in its chargemaster.”

The good news is that there’s more talk about price and quality transparency than in the past. Since both are essential to a consumer-directed approach to healthcare, this is an encouraging development. Only time will tell how impactful this particular rule will be, but the movement towards transparency is a step in the right direction.