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  • CMS Rule on Hospital Price Transparency Sets the Stage for Major Shift in Public Access to Charges for Services

    In this review: Medicare and Medicaid Programs: Price Transparency Requirements for Hospitals to Make Standard Charges Public (final rule)
    Effective date: January 1, 2021
    CMS fact sheet

    The big picture: Hospitals will face more stringent requirements to disclose charges for items and services—including physical therapy—in a consumer-friendly, online form. Hospitals aren't happy about it.
    A final rule from the US Centers for Medicare and Medicaid Services (CMS) makes it clear that the agency will move ahead in its efforts to make hospital cost data more accessible to consumers. Beginning January 1, 2021, hospitals will be required to share a much more detailed range of charges, including gross charges, charges negotiated with a third-party payer, charges for cash payment from individuals, and minimum and maximum negotiated charges. The publicly accessible data must cover at least 300 services that patients can schedule in advance—known as "shoppable" services—and while hospitals have some leeway as to which service charges are included, they are required to lists charges for a core set of 70 services, including physical therapy, specifically therapeutic exercise (CPT 97110).

    The American Hospital Association, the Federation of American Hospitals, the Association of American Medical Colleges, and the Children's Hospital Association announced that they will challenge the final rule in court, writing in a joint statement that the rule "will introduce widespread confusion, accelerate anticompetitive behavior among health insurers, and stymie innovations in value-based care delivery."

    Notable in the final rule

    The total number of disclosed services must be at least 300. If a hospital doesn't offer 1 or more of the 70 required services, it must substitute an additional shoppable service so that the total list equals at least 300 services.

    Listings must be easy-to-understand, presented in a "machine readable" format, and updated annually. In addition to the charge data being available for free on a public website, the lists must be in formats that can be "read" by computers (as opposed to pdf files, for example), and must use clear language in descriptions of services, including information that makes it easy to identify the particular hospital location associated with each listed service.

    The definition of "standard charge" is broad. Under the new rule, the "standard charges" that must be shared include cash prices, charges negotiated with individual payers, and de-identified minimum and maximum charges.

    Billing codes must be included. Listings must include relevant codes such as Current Procedural Terminology codes, Healthcare Common Procedure Coding System codes, and diagnostic-related group codes, among others.

    The rule will require health insurers to be more transparent, too. The rule extends to group health plans and health insurers, which will be required to allow public access to out-of-pocket cost information for all covered items and services, as well as to payment rates for both in and out-of-network providers.