A new proposal by the Centers for Medicare and Medicaid Services may give patients a better idea of costs they will incur for hospital services.
On July 29, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule addressing hospital pricing transparency issues that follows directives in President Trump’s executive order titled “Improving Price and Quality Transparency in American Healthcare to Put Patients First.” The purpose of Trump’s executive order and the proposed rule is to make prices for items and services provided by all hospitals in the United States more transparent for patients so that patients can better make informed decisions about their care.
The proposed rule implements Section 2718(e) of the Public Health Service Act and expands on prior agency guidance that required hospitals to make public their standard charges upon request starting in 2015 and subsequently online in a machine-readable format starting in 2019. Section 2718(e) requires each hospital operating within the United States to establish 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.
In its proposed rule, CMS recommends the following:
Proposed Requirements for Making Public All Standard Charges for Items and Services
CMS proposes that hospitals “make public” their standard charges, which CMS interprets as publishing standard charges online in a machine-readable format and, for “shoppable services,” in a consumer-friendly display. CMS defines a “shoppable service” as a service that can be scheduled at the hospital by a healthcare consumer in advance. CMS believes that these proposed requirements will allow healthcare consumers to make “apples-to-apples” comparisons of payor‑specific negotiated charges across healthcare settings.
CMS specifically proposes the following:
Monitoring and Enforcement
CMS proposes rules for monitoring and enforcing hospitals’ compliance with these pricing transparency requirements. CMS would engage in monitoring and enforcement by evaluating complaints made by individuals or entities to CMS, reviewing individuals’ or entities’ analysis of non‑compliance, and auditing hospitals’ websites. If CMS determines that a hospital is non‑compliant, CMS may assess a monetary penalty against the hospital after providing the hospital with a warning notice, or after requesting a corrective action plan from the hospital if its non-compliance constitutes a material violation of one or more requirements. If a hospital fails to submit a corrective action plan or comply with the requirements of a corrective action plan, CMS may impose a civil money penalty on the hospital not in excess of $300 per day, and may publicize these penalties assessed against the hospital on a CMS website. Hospitals will have the opportunity to appeal such civil money penalties by requesting a hearing before an administrative law judge.
Providers may submit comments to CMS on this proposed rule by no later than September 17, 2019.
The proposed rule is available in its entirety through the Federal Registrar. If you have any questions about this proposed rule, please contact one of the Phelps Dunbar LLP’s healthcare attorneys.