CMS releases additional guidance on hospital price transparency

Publication October 23, 2018

Section 2718(e) of the Public Health Service Act, as enacted by the Affordable Care Act, requires “each hospital operating within the United States” to “make public (in accordance with guidelines developed by the Secretary) 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.” Recently, the Centers for Medicare & Medicaid Services (CMS) updated the guidelines implementing this provision and released clarifying guidance. The updated guidelines will require hospitals to examine their price transparency efforts and ensure they are in compliance with the new requirements by January 1, 2019.

Implementing guidelines

In the 2015 Inpatient Prospective Payment System (“IPPS”) final rule[1] CMS provided guidelines to implement section 2718(e). In order to improve public accessibility of charge information, CMS required hospitals to “make public a list of their standard charges (whether that be the chargemaster itself), or in another form of their choice, or their policies for allowing the public to view a list of those charges in response to an inquiry.” CMS expected hospitals to update the information at least annually, or more often as appropriate, to reflect current charges.

Updated guidelines

Earlier this year CMS re-examined the guidelines implementing section 2718(e). The agency expressed concerns that insufficient price transparency continues to provide challenges for patients, such as:

  • Patients being surprised by out of-network bills for physicians, such as anesthesiologists and radiologists, who provide services at in-network hospitals;
  • Patients being surprised by facility fees and physician fees for emergency room visits;
  • Chargemaster data are not helpful to patients for determining what they are likely to pay for a particular service or hospital.[2]

In August, CMS finalized updated guidelines that include an additional requirement as part of the 2019 IPPS final rule[3]. Beginning January 1, 2019, a list of a hospital’s current standard charges must be made available via the internet in a machine readable format. The list of current standard charges may “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.” CMS noted that the information is not required to be published in a payer-specific manner. Hospitals must update this information at least annually, or more often as appropriate, to reflect current charges.

September 27, 2018 FAQs

On September 27 CMS published frequently asked questions (“FAQs”) clarifying the updated guidelines. The FAQs make clear that the hospital price transparency requirements apply to all hospitals, stating that “[t]here are no hospitals operating within the United States with exemptions from this requirement under the current policy.”

The FAQs also clarified the following:

  • The format for a hospital to make public a list of standard charges via the internet is the hospital’s choice, so long as the information represents the current standard charges.
  • The requirement applies to all items and services provided by the hospital.
  • Machine-readable is defined as “a digitally accessible document but more narrowly defined to include only formats that can be easily imported/read into a computer system (e.g., XML, CSV).” A PDF would not satisfy the requirement.
  • A hospital is not precluded from posting quality information or price transparency information in addition to the standard charges in its chargemaster.
  • Satisfaction of a state price transparency initiative does not exempt a hospital from the price transparency requirements.[4]

Enforcement

CMS has not addressed enforcement of this provision. As part of the 2019 IPPS proposed rule it requested comment on what the appropriate enforcement mechanism should be:

What is the most appropriate mechanism for CMS to enforce price transparency requirements? Should CMS require hospitals to attest to meeting requirements in the provider agreement or elsewhere? How should CMS assess hospital compliance? Should CMS publicize complaints regarding access to price information or review hospital compliance and post results? What is the most effective way for CMS to publicize information regarding hospitals that fail to comply? Should CMS impose civil money penalties on hospitals that fail to make standard charges publically available as required by section 2718(e) of the Public Health Service Act? Should CMS use a framework similar to the Federal civil penalties under 45 CFR 158.601, et seq. that apply to issuers that fail to report information and pay rebates related to medical loss ratios, as required by sections 2718(a) and (b) of the Public Health Service Act, or would a different framework be more appropriate?[5]

In the 2019 IPPS final rule, CMS stated that enforcement actions “will be addressed in future rulemaking.”[6]

Next steps

Secretary of HHS Alex Azar[7] and CMS Administrator Seema Verma[8] have made clear that increasing price transparency is a focus of this administration. Further policy initiatives surrounding price transparency should be expected in the future, including how the Secretary will enforce section 2718(e). In the meantime, hospitals should be taking proactive steps to ensure their price transparency efforts meet the current guidelines and be working towards compliance with the updated guidelines, which take effect on January 1, 2019.

For additional information regarding compliance with the hospital price transparency requirements, please contact the Norton Rose Fulbright professional(s) listed below.


[1] 79 Fed. Reg. 49854, 50146 (Aug. 22, 2014), available at: https://www.gpo.gov/fdsys/pkg/FR-2014-08-22/pdf/2014-18545.pdf.

[2] 83 Fed. Reg. 20164, 20549 (May 7, 2018), available at: https://www.gpo.gov/fdsys/pkg/FR-2018-05-07/pdf/2018-08705.pdf.

[3] 83 Fed. Reg. 41144, 41686 (Aug. 17, 2018), available at: https://www.gpo.gov/fdsys/pkg/FR-2018-08-17/pdf/2018-16766.pdf.

[4] Frequently Asked Questions Regarding Requirements for Hospitals to Make Public a List of Their Standard Charges via the Internet, the Centers for Medicare & Medicaid Services (Sept. 27, 2018), available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Downloads/FAQs-Req-Hospital-Public-List-Standard-Charges.pdf.

[5] 83 Fed. Reg. at 20549 (May 7, 2018).

[6] 83 Fed. Reg. at 41686 (Aug. 17, 2018),

[7] See https://www.hhs.gov/about/leadership/secretary/speeches/2018-speeches/remarks-on-value-based-transformation-to-the-federation-of-american-hospitals.html.

[8] See https://revcycleintelligence.com/news/just-the-beginning-of-healthcare-price-transparency-verma-says.


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