CMS Finalizing Transparency Rule: What Will You Get to See?

The Centers for Medicare & Medicaid Services (CMS) issued a proposed final rule on November 15 that requires hospitals to disclose the rates they negotiate with health insurers beginning in 2021. In addition, the current administration has also released a proposed rule that would require health plans to share price and cost-sharing information up front with members.

This final rule implements Section 2718(e) of the Public Health Service Act and improves earlier CMS guidance requiring hospitals to make public their standard charges upon request (79 FR 50146) and online in a machine-readable format (83 FR 41144).

Hospital price transparency proposed final rule

“Standard charges” file. The proposed final rule will require hospitals to post their “standard charges” online in a machine-readable file. Under the definition by CMS, standard charges include the following:

  • gross charges (the charge for an individual item or service reflected on a hospital’s chargemaster, not including any discounts
  • discounted cash prices (the charge that applies to an individual who pays cash, or cash equivalent, for a hospital item or service);
  • payer-specific negotiated charges (the charge that a hospital has negotiated with a third-party payer for an item or service);
  • de-identified minimum negotiated charges (the lowest charge that a hospital has negotiated with all third-party payers for an item or service); and,
  • de-identified maximum negotiated charges (the highest charge that a hospital has negotiated with all third-party payers for an item or service).

Hospitals will be required to disclose the standard charges for all items and services, including supplies, facility fees and professional charges for employed physicians and other practitioners.

Publicize 300 “shoppable services.” The final rule requires hospitals to post payer-specific negotiated rates online in a searchable and consumer-friendly manner for 300 services that patients are likely to shop for. Seventy of the services are stipulated in the rule. Hospitals can choose the other 230 services they post online.

Penalties. Hospitals that fail to publish the negotiated rates online could be fined up to $300 per day.

Access the proposed final rule.

Health plan transparency proposal

Negotiated rates. The proposal would require health insurers and group health plans that cover employees to disclose on a public website their negotiated rates for in-network providers and allowed amounts paid for out-of-network providers. This requirement would promote competition in the healthcare industry, drive innovation and support price-conscious decision-making, CMS said in a fact sheet on the proposed rule.

Transparency tool. Under the proposal, health insurers would be required to offer a transparency tool to provide members with personalized out-of-pocket cost information for all covered services in advance. “This requirement would empower consumers to shop and compare costs between specific providers before receiving care,” CMS said.

Comments. There is a 60-day public comment period on the proposed rule.

Access the proposed rule.