The hospital price transparency rule was finalized by the US CMS in November 2019 and was to take effect from January 1, 2021. Under the rule, hospitals are required to post prices of 300 of the most ‘Shoppable’ goods, procedures, and services they offer.
This information should be provided online and in two ways;Â
- As a comprehensive machine-readable file with all items and services andÂ
- In a display of Shoppable services that is put in a consumer-friendly format.
This helps Americans know the cost of a hospital item or service before engaging in receiving it to avoid exploitation. It also helps consumers to shop and compare prices and estimate the costs across different hospitals before settling on that which they deem factors their needs comprehensively.Â
CMS audits a sample of audits, in addition to the complaints submitted to ensure that the rules are adhered to. Hospitals may face civil monetary penalties for noncompliance.
CMS is also exploring additional policies to implement as well as fighting to ensure that the information provided by the hospitals and health systems is of use to the consumers.
A warning letter is issued when noncompliance is noted and in case the issue is not attended to by the hospital, CMS requests a corrective action plan.Â
On November 2, 2023, the Centers for Medicare and Medicaid Services( CMS) finalized changes to the hospital price transparency regulations that were to be of importance to patients.
The policies in that final rule are bound to further enhance the agency’s commitment to increasing price transparency as well as enforcing compliance and would apply to each hospital operating in the USA.
Increasing and Enforcing Price Transparency of Hospital Standard Charges
The task of increasing and enforcing price transparency is a process that’s done using different approaches that work together toward the realization of the same goal. These processes include:
Standardization of Files and Data Elements that enhance consumer Access and Readability;Â
The hospital price Machine-Readable File(MRF) is a file that is intended to be read by machines capable of processing hospital standard charge information. CMS is still finalizing some more new changes to increase the standardization of MRF that will help patients as had been promised.
These finalized changes are a component of the public input CMS collected from prior requests for information, consumer-focused listening sessions, and to a larger extent recommendations from a Technical Expert Panel ( TEP) composed of industry experts, hospital researchers, and innovators tasked with streamlining hospital price transparency.
The CMS finalized a requirement for hospitals to display standard charge information by conforming a CMS template layout, data specifications, and data dictionary. On top of that, the hospitals are expected to conform to other specified technical instructions that are to be provided in a data dictionary.
Improved Accessibility for Oversight:
Two changes that would permit automated access and real-time centralization of the files and standard charges were finalized by CMS. These include:
- The requirement that the hospital places a ‘footer’ at the bottom of the hospital’s homepage that links to a webpage that includes the MRF and
- The requirement that the hospitals ensure that a .txt file is included in the root folder of the publicly available website preferred by the hospital for posting its MRF.
The requirements, the CMS believes, will improve the automated accessibility of hospital standard charges information as well as streamline CMS enforcement of those requirements.
Required Affirmation Statement:
Each hospital is expected to make a good-faith effort to ensure that data in the MRF is true, accurate, and complete. The authenticity of the data goes a long way in helping transparency.
In addition to that, each hospital is required to ,in its MRF, to affirm that to the best of their knowledge and belief, the hospital has included all the required details of the hospital price transparency rule.
All the applicable standard charge information should be in accordance with the requirements of 45 CFR part 180 and it should also be indicated that the information supplied is accurate and complete as of the date indicated in the file.
Strengthened and Streamlined Enforcement Capabilities:
CMS finalized several regulatory additions and modifications to its enforcement provisions at 45 CFR 180 in liaison with the enforcement changes announced. These policies are designed to improve CMS enforcement capabilities and increase transparency. They include:
- The requirement by CMS that there be submission of certification by an authorized hospital member as to the authenticity, accuracy and completeness of the data provided in the machine-Readable File and submission of additional documentation as needed so as to determine hospital compliance.
- The requirement that hospitals submit an acknowledgement of receipt of the warning notice in the form and manner and by the deadline specified in the notice of the violation issued by CMS to the hospital.
- CMS is allowed to publicize on the CMS website information related to 1-CMS’s assessment of hospital’s compliance ,2-Any compliance action taken against the hospital, the form of such compliance action and the outcome of that compliance action and 3- Notification sent to health system leadership.Â
As of now, CMS already currently releases information regarding hospitals that have been issued with civil monetary penalties.
- In the event CMS takes the initiative to address hospital noncompliance and it happens that the hospital is determined by CMS to be part of a health system, CMS may notify health system leadership of the action and this may prompt them to work with the health system leadership to address similar loopholes and shortcomings for hospitals across the health system.
These actions complement CMS’s April 2023 actions aimed at shortening time-frames for the completion of Corrective Action Plans (CAPs) for non-compliant hospitals, and impose civil monetary penalties earlier and automatically. This also streamlines the compliance process for hospitals that aren’t bothered by the rules and have not attempted to comply with the rules.
With regard to the CMS proposed 60- day enforcement grace period concerning adoption of a CMS template, format, and encoding new data elements, the proposal is yet to be finalized. In its place is a phased implementation timeline to be finalized with the changes.
So, Jan 1,2024 was to be the effective date of all the changes to the hospital price transparency regulations at 45 CFR part 180.
The regulation text was to specify later dates by which hospitals must comply with some of the new requirements, hence enforcement of hospital compliance on the applicable later compliance date.
Key facts
The key facts in the Hospital Price Transparency Rule are:
1. The five different standard charges required to be posted publicly via Machine-Readable files include:
- Gross charges
- Payer specific negotiated ratesÂ
- The identified minimum and maximum negotiated pricesÂ
- Discounted prices
- Out of pocket cost estimator for at least 300 Shoppable services.
2. There’s also a Good Faith Estimates whereby the No Surprise Act requires hospitals and other providers to share Good Faith Estimates with uninsured self-pay patients for most scheduled services.
3. The No Surprise Act requires insurers to share advanced explanations of benefits with the enrollees. This implementation, though, is still currently on hold pending rulemaking.
Implementation Considerations
The implementation phase of Hospital Price Transparency has had its upsides and downsides. Some of the hitches that make the process demanding are discussed below.
Patients face numerous and potentially conflicting sources of pricing information. There’s the Hospital Price Transparency rule, the Health Insurer Transparency in Coverage rule, and surprise Act Price Transparency.
Each feature one or more ways in which patients can access pricing information in advance. A patient may go through the hospital’s Machine-Readable Files, the hospital’s Online Patient Estimator, the advanced explanation of benefits created by the health plan or the Good Faith Estimator created by the provider.
State-level policies may also direct patients to a variety of other price estimate options from the private sector. All these sources don’t complement each other, and the reported rate of information may be inconsistent which leaves the patients at a loss as to which one to rely on.
This makes the whole program burdensome instead of making it useful to the patients.
Due to the need to comply with the patient’s requests, many hospitals have embraced new technology that enables patients to obtain tailored out-of-pocket cost estimates through online tools.
Whereas hospitals are working to comply with the requirements to post Machine-Readable Files, the nature of hospital pricing and rate negotiations are not predictable. Patients have unique cases that can’t be generalized in the Hospital Price Transparency rule.
Contracts with health plans are complex and the actual rate that applies to a service can drastically change based on a patient’s specific scenario. It should also be considered that not all the requirements of a patient are known at the time of treatment scheduling.
There is almost no way that a patient can use the Machine-Readable File to calculate the cost of any episode of care in which more than one item or service is given.
The patient’s health insurer may cover only a portion of the services in a way that leaves the balance in a haphazard manner.
It should also be noted that price transparency tools require a large investment of staff time and hospital resources.
Price Transparency tools, including patient-specific cost estimation tools and Machine-Readable Files, require the adoption of new technology that is capable of pulling relevant data from multiple sources and presenting it to the patient in the most easily interpreted manner.
Needless to say, the resulting output in the Machine-Readable Files can often be too large to be managed by the existing hospital websites yet the data must be refreshed regularly.
Additionally, these requirements went into effect during the COVID-19 pandemic, and logically, priority had to be given to COVID-19 surges and vaccine administration.
CMS has been working closely with hospitals. It began auditing hospital compliance with the hospital price in the spring of 2021 and has so far reviewed 835 hospitals’ websites.
But so far, only 2 fines for noncompliance have been issued. However, some hospitals and health systems are still working with CMS to learn the ropes on hospital price compliance issues.
There’s also a hitch of third-party compliance reports. These third-party reports sometimes miss the mark. Some continue to issue reports that are not accurate. The reports fail to acknowledge CMS requirements such as how to fill an individual negotiated rate.
When such a rate does not exist due to a patient’s service being bundled and billed together, a blank cell is deemed appropriate by CMS since there’s no negotiated rate to include.
Despite this, some of these third-party groups still count these files with blank cells as non-compliant. This misrepresentation leads to misinformation and generates confusion in the health systems and hospitals. It also hampers productive communication around efforts towards transparency data for patients.
Recommendations
Since hospitals and health systems are eager and willing to continue working towards the best possible estimates for patients, Congress and administration should also help them accomplish their mission by the following steps:
- Reviewing and streamlining the existing transparency policies with the objective to reduce potential patient confusion and unnecessary regulatory burden on the service providers.
- Involve patients, providers and payers in an effort to seek to make federal price transparency policies as patient-centered as possible.
- Refrain from additional legislation or regulation that may further confuse or complicate the providers’ ability to provide meaningful price estimates while adding unnecessary costs to the health system.
Sources
- American Heart Association (AHA)
- Centers for Medicare and Medicaid Services (CMS)
- Health Affairs Forefront Series