Healthcare IT Interoperability, EHR interoperability, Hospital Interoperability

Policy and Regulation News

Hospital Price Transparency Rule Takes Effect January 1, 2019

The hospital price transparency rule takes effect on January 1, requiring providers to publicize their rates for all items and services.

Hospital price transparency rule

Source: Thinkstock

By Jennifer Bresnick

- Starting January 1, 2019, hospitals will be required to post their price lists online in an effort to increase price transparency and empower consumers to make informed choices about their care.

The mandate stems from the 2019 inpatient and long-term care hospital prospective payment system (IPPS/LTCH PPS) final rule, released in August, in which CMS included the requirement for hospitals to update their public price lists at least annually.

“The policies in the IPPS/LTCH PPS final rule further advance the agency’s priority of creating a patient-centered healthcare system by achieving greater price transparency, interoperability, and significant burden reduction so that hospitals can operate with better flexibility and patients have what they need to be active healthcare consumers,” CMS wrote in a fact sheet accompanying the final rule.

While hospitals can choose the format for presenting the data, as long as it’s machine-readable, the list must include all items and services provided by the facility, CMS stated.

“CMS 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,” the agency said.

“A hospital is not precluded from posting quality information or price transparency information in addition to its current standard charges in its chargemaster.”

For payers, the mandate will publicize existing differences between hospital charge rates and reimbursement amounts.

Payers may need to open dialogues with their contracted providers to answer questions about how the open price lists will affect their future financial relationships.

The vast majority of providers are worried about the impact of the rule, found a November poll by HBI (Healthcare Business Insights) and health IT services company PMCC. 

Ninety-two percent of providers said they are somewhat or very concerned about the public perception of their prices.

Consumer uncertainty over how hospital chargemaster prices relate to their ultimate out-of-pocket costs is likely to affect payers, as well.

Payers should prepare to field a higher volume of inquiries from members and beneficiaries about financial responsibility and any disparities between payment rates.

The new rule offers an opportunity for health plans to share educational materials and strategies about how to shop for care, maximize the value of high-deductible plans and health savings accounts (HSAs), and develop better financial management skills.

Payers who successfully expand their role as a trusted resource for financial information and transparent, open discussion of the cost of care are likely to retain member loyalty in a highly competitive market.


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