CMS announced Tuesday it may require that hospitals post charge information as part of the proposed 2019 Inpatient Prospective Payment System rule. And price transparency that drives down medical costs can only be good news for the workers’ compensation industry.
Few hospitals nationally offer patients accurate, individualized information about how much they’ll have to pay for medical services, experts say.
The Affordable Care Act already mandates publishing charges, but the provision hasn’t been enforced.
Updated guidelines would require hospitals to post a list of their current standard charges online in a machine-readable format by Jan. 1 and to update the information annually, according to the proposed rule. “This could be in the form of the chargemaster itself or another form of the hospital’s choice,” it reads.
CMS Administrator Seema Verma said the new requirements, which were foreshadowed in a speech last month by HHS Secretary Alex Azar, are part of the Trump administration’s efforts to encourage patients to become better-educated decisionmakers. “We are just beginning on price transparency,” she said.
“We are just beginning on price transparency,” said Verma. “We know that hospitals have this information and we’re asking them to post what they have online.”
Hospitals are required to disclose prices publicly, but the latest change would put that information online in machine-readable format that can be easily processed by computers. It may still prove to be confusing to consumers, since standard rates are like list prices and don’t reflect what insurers and government programs pay.
The proposed requirement to publish charges is likely to prove controversial and complicated to implement. Simply posting inflated retail prices as listed on a hospital’s chargemaster won’t be helpful to most patients, experts say.
“Posting gross charges is misleading and inflammatory,” said Joe Fifer, CEO of the Healthcare Financial Management Association, which has published price transparency guidelines. “I’d rather CMS focus on actual payments hospitals receive and what patients are responsible for.”
Some experts also questioned if publishing prices will help reduce prices. A study by the Health Care Cost Institute found that less than 7% of total U.S. healthcare spending stems from services for which patients truly can comparison shop.
The price lists may still be confusing to consumers, though, because standard rates are like list prices and don’t reflect what insurers and government programs pay. “Given the inherent complexity of hospital billing, making prices easy to understand is clearly a lot easier said than done,” says Shawn Gremminger, of Families USA.