On Nov. 1, as part of the OPPS/ASC Final Rule, CMS also finalized policies on price transparency. These policies follow directives in President Trump’s Executive Order, “Improving Price and Quality Transparency in American Healthcare to Put Patients First,” and are intended to establish a foundation for a patient-driven healthcare system by making prices for items and services provided by all hospitals in the United States more transparent for patients so that they can be more informed about what they might pay for hospital items and services.

The final rule requirements would apply to each hospital operating in the United States. The rule implements Section 2718(e) of the Public Health Service Act and improves upon prior agency guidance that required hospitals to make public their standard charges upon request starting in 2015 (79 FR 50146) and subsequently online in a machine-readable format starting in 2019 (83 FR 41144). Section 2718(e) requires each hospital operating within the United States to establish (and update) and make public a yearly 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.

The final provides definitions for all of the following:

Definition of Standard Charges
CMS is finalizing the definition of ‘standard charges’ to include the following:

  1. The gross charge (the charge for an individual item or service that is reflected on a hospital’s chargemaster, absent any discounts),
  2. The discounted cash price (the charge that applies to an individual who pays cash, or cash equivalent, for a hospital item or service),
  3. The payer-specific negotiated charge (the charge that a hospital has negotiated with a third-party payer for an item or service),
  4. The de-identified minimum negotiated charges (the lowest charge that a hospital has negotiated with all third-party payers for an item or service).
  5. The de-identified maximum negotiated charges (the highest charge that a hospital has negotiated with all third-party payers for an item or service).

For each hospital location, hospitals must make public all their standard charges (including gross charges, payer-specific negotiated charges, de-identified minimum and maximum negotiated charges, and discounted cash prices) for all items and services online in a single digital file in a machine-readable format.  Specifically, hospitals must do the following:

CMS believes this information and format is most directly useful for employers, providers and tool developers that could use these data in consumer-friendly price transparency tools or that may integrate the data into electronic medical records and shared decision making tools at the point of care.

Hospitals must make public standard charges for at least 300 “shoppable services” (including 70 CMS-specified and 230 hospital-selected many of which include spine procedures such as fusion and disctectomies) the hospital provides in a consumer‑friendly manner. Specifically, hospitals must do the following:

In addition, CMS will deem a hospital as having met the requirements for making public standard charges for 300 shoppable services in a consumer-friendly manner if the hospital maintains an internet-based price estimator tool that meets the following requirements:

Read the Fact Sheet here.

Read the Final Rule here.

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