Hospitals Must Post Their Real Prices Starting in 2021: CMS

News November 15, 2019 at 04:30 PM
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Seema Verma, the CMS administrator Seema Verma (Photo: Centers for Medicare and Medicaid Services)

The administration of President Donald Trump has taken two major steps toward requiring hospitals and health coverage providers to give patients detailed information about what care will really cost.

The Centers for Medicare and Medicaid Services (CMS) — the arm of the U.S. Department of Health and Human Services that oversees Medicare, Medicaid and the Affordable Care Act public exchange system — has posted a preview version of a final cost transparency rule for hospitals on the CMS website.

CMS has also started the process of trying to require health insurers and group health plans to reveal what patients' true out-of-pocket costs will be for specific services from specific providers.

CMS Administrator Seema Verma said in a statement that, today, "health care prices are about as clear as mud to patients."

"Today's rules usher in a new era that upends the status quo to empower patients and put them first," Verma said.

What the Regulations Require Hospitals to Post

Hospitals already disclose information about the full list prices they charge for care for patients who come in without use of a provider network and can afford to pay the whole bill.

The hospital cost transparency regulations require hospitals to publish a much more comprehensive set of charge information, in a single standard data file, on the Internet, starting in 2021.

The data file must include "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," according to CMS.

The data file would show that a hospital might charge various Blue Cross plans for specific procedures, and how much it might charge UnitedHealth plans for the same procedures.

That kind of file will be too big for most consumers to use, but hospitals will also have to provide "payer-specific negotiated charges" for 300 "common shoppable services in a manner that is consumer-friendly."

The shoppable services tool might have to show, for example, how much a hospital would charge an enrollee in a specific Aetna network for an MRI, or how much it would charge an enrollee in a specific Cigna network for a visit to an eye doctor.

CMS has sent the final regulations to the Office of the Federal Register for publication. The preview version is not yet available on the Office of the Federal Register website, and an anticipated publication date is not yet available. The office keeps many major CMS regulatory documents in preview mode for several days before officially publishing  them.

In some cases, parties affected by regulations challenge the regulations in court and get courts to block implementation.

In other cases, parties may be able to get Congress to pass legislation blocking implementation.

What the Trump Administrations Wants Coverage Providers to Post

CMS has also joined with the Internal Revenue Service, which is an arm of the U.S. Treasury Department, and the Employee Benefits Security Administration, which is an arm of the U.S. Labor Department, to draft a proposal for cost transparency regulations for health insurers and group health plans.

Those proposed regulations will require coverage providers to give consumers real-time, personalized information about how much they are likely to have to pay out-of-pocket for all covered health care products and services, through an online tool.

Many health insurers, such as Aetna, already provide cost estimator tools through websites or apps. It was not immediately clear whether the existing tools would meet the requirements in the proposed regulations.

The proposed regulations would also require coverage providers to post their negotiated rates for in-network providers on the web, and post the allowed amounts they pay for care from out-of-network providers, officials said.

Comments on the proposed regulations will be due 60 days after the official Federal Register publication date.

Like the final hospital cost transparency final regulations, the health plan proposed regulations packet is not yet available on the Office of the Federal Register website.

Health Insurers' Reaction

Some antitrust experts have argued that, even though requiring more disclosure of health care price information might seem helpful for patients, increased disclosure could backfire, by giving hospitals, physicians and other health care providers information they can use to push up prices.

America's Health Insurance Plans (AHIP) has traditionally resisted many federal and state cost transparency measures, on the grounds that they would disrupt plan-provider negotiations and reduce plans' bargaining clout.

AHIP President Matt Eyles said in a statement that AHIP has concerns about the hospital cost transparency regulations and the proposed health plan cost transparency regulations.

"Every American should be able to get personalized health care cost and quality information before they seek care," Eyles said. "Actionable and personalized information will help patients make informed decisions that are best for their needs."

But transparency "should aid and support patient decision-making, should not undermine competitive negotiations that lower patients' health care costs," Eyles said. "We will continue to engage collaboratively with the administration and other health care stakeholders on how we can best work together to achieve lower prices and costs while protecting health care quality, choice, value, and privacy for the hardworking Americans we serve."

Resources

A copy of a press release describing the final and proposed regulations, and links to preview versions of the final regulation packet and the proposed regulation packet, is available here.

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