Industry News Archive

CMS Issues Rules on Price Transparency for Hospitals and Health Insurance Issuers

On Nov. 15, the Centers for Medicare & Medicaid Services (CMS) issued two rules that aim to increase price transparency and increase competition among all hospitals, group health plans, and health insurance issuers in the individual and group markets. The agency finalized the calendar year (CY) 2020 Outpatient Prospective Payment System (OPPS) & Ambulatory Surgical Center (ASC) Price Transparency Requirements for Hospitals to Make Standard Charges Public rule, and issued the Transparency in Coverage Proposed Rule. Both rules (final and proposed) require that pricing information be made publicly available.

The final "Price Transparency Requirements for Hospitals to Make Standard Charges Public" rule will require hospitals to make their standard charges public in two ways starting in January 1, 2021:

  • Comprehensive Machine-Readable File: Hospitals will be required to make public all hospital standard charges (including the gross charges, payer-specific negotiated charges, the amount the hospital is willing to accept in cash from a patient, and the minimum and maximum negotiated charges) for all items and services on the Internet in a single data file that can be read by other computer systems. The file must include additional information such as common billing or accounting codes used by the hospital (such as Healthcare Common Procedure Coding System (HCPCS) codes) and a description of the item or service to provide common elements for consumers to compare standard charges from hospital to hospital.
  • Display of Shoppable Services in a Consumer-Friendly Manner: Hospitals will be required to make public payer-specific negotiated charges, the amount the hospital is willing to accept in cash from a patient for an item or service, and the minimum and maximum negotiated charges for 300 common "shoppable services" in a consumer-friendly way and update the information at least annually.

CMS fact sheet on final rule.
Access final rule.

CMS states that the proposed "Transparency in Coverage" rule is issued in response to an Executive Order dated June 24, 2019. The Department of Health and Human Services, the Department of Labor, and the Department of the Treasury are collectively issuing the proposed rule. As written, the rule would require that most employer-based group health plan and health insurance issuers provide up-front disclosure of price and cost-sharing information to participants, beneficiaries, and enrollees. 

If finalized, the "Transparency in Coverage" proposed rule would require health plans to:

  • Provide consumers with real-time, personalized access to cost-sharing information, including an estimate of their cost-sharing liability for all covered healthcare items and services, through an online tool that most group health plans and health insurance issuers would be required to make available to all of their members, and in paper form, at the consumer’s request. This would allow consumers to shop and compare costs between specific providers before receiving care.

Disclose on a public website their negotiated rates for in-network providers and allowed amounts paid for out-of-network providers. Making this information available to the public is intended to drive innovation, support informed, price-conscious decision-making, and promote competition in the healthcare industry.  

Access a CMS fact sheet on the proposed rule.
Access the proposed rule.

More details are available in the HHS press release.

Posted 11/15/2019

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