Despite pushback from numerous hospital and provider advocacy groups, CMS appears set to move forward with plans to require hospitals to disclose their service pricing beginning Jan. 1, 2020.
This move was first signaled late last year when CMS first published it’s plan to require hospitals to publicly post their chargemasters online, beginning in 2020 (which has since been delayed to 2021). At the time, CMS indicated the proposal was intended to benefit consumers by providing them with information that could help them shop around for services and better understand out-of-pocket costs.
CMS again stated its intent to move forward with that plan in the 2021 IPPS Proposed Rule. If not walked back when the final rule is released later this fall, the pricing transparency requirements will go into effect Jan. 1.
Under the requirement, hospitals must publicize their standard charges for both gross charges and commercial charges negotiated with specific payers for “shoppable services”. This information must be made available online in an easily digestible format and include information on billing codes used by the hospital and their corresponding services.
Hospital advocates, meanwhile, have long contended these rules will strip their ability to negotiate effectively with commercial payers by promoting anticompetitive practices. Additionally, there is concern over potential public relations issues that could be caused by posting standard charges, which don’t take into account for potential emergency or acute care scenarios.
While there has been some confusion over what exactly constitutes a “shoppable service”, CMS has clarified it essentially refers to procedures that can be scheduled ahead of time, in an effort to give consumers a chance to shop around for the best price. Examples include imaging services, x-rays, outpatient procedures and laboratory tests.
The full list of affected services includes 300 procedures, but keep in mind that the corresponding pricing information must be written in plain language and placed in a prominent location online, or provided in written form upon request. The shoppable service charges displayed and grouped with charges for any ancillary services the hospital customarily provides with the primary shoppable service. Hospitals also have to update their posted pricing information at least once a year.
CMS said it will enforce the transparency requirements through auditing and by imposing civil monetary penalties of up to $300 a day and more than $100,000 annually against hospitals that don’t comply.
If you have questions about how to best comply with this new requirement, feel free to reach out to us directly at 517-486-4262.