On November 15, the Centers for Medicare & Medicaid Services (CMS) published the Calendar Year (CY) 2020 Outpatient Prospective Payment System (OPPS) & Ambulatory Surgical Center (ASC) Price Transparency Requirements for Hospitals to Make Standard Changes Public final rule and the Transparency in Coverage proposed rule. CMS intends through this rulemaking to increase price transparency in the healthcare system.

CY 2020 OPPS & ASC Price Transparency Requirements for Hospitals Final Rule

This final rule is effective January 1, 2021 and requires hospitals to provide public information on their “standard charges” for the items and services that they provide. CMS finalizes “standard charges” to include gross charges, discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated third party payer charges for all of the hospital’s items or services. In terms of de-identified minimum and maximum negotiated charges, CMS clarifies that these charges will not need to identify the third party payer with which these rates are negotiated, or can be “de-identified.” The rule also finalizes definitions for “hospital” and “items and services.”

Hospitals will be required to make all their standard charges public by posting this information online in a single comprehensive machine-readable file. The file will need to be on a publicly available website and must clearly identify the hospital location with which each standard charge is associated. The file will also need to include a description of each item or service and the common billing or accounting codes used by the hospital for that item or service. Under the final rule, CMS will also require hospitals to make public standard charges for at least 300 “shoppable services.” CMS finalizes the term “shoppable services” to mean “services that can be scheduled by a healthcare consumer in advance.” The shoppable services will also need to be in a consumer-friendly file and location, and the hospital will need to update the information annually.

In the fact sheet accompanying the final rule, CMS states that it extended the effective date to January 1, 2021 in order to give hospitals more time to comply with the final rule’s requirements. When the rule becomes effective, non-compliant hospitals could be subject to monitoring, auditing, corrective action plans, and CMS could impose civil monetary penalties of $300 per day.

Transparency in Coverage Proposed Rule 

The Transparency in Coverage proposed rule would require most employer-based group health plans and insurers offering individual and group coverage to disclose price and cost-sharing information upfront to participants, beneficiaries and enrollees. The proposed rule includes two approaches.

First, the proposed rule would require non-grandfathered group health plans or health insurance issuers offering non-grandfathered health coverage to give consumers personalized access to cost-sharing information. This information must be made available through an online tool that the health plans and  insurers would be required to make available, as well as in paper form upon the consumer’s request.

Second, the proposed rule would require non-grandfathered group health plans or health insurance issuers offering non-grandfathered health coverage to disclose their negotiated rates for in-network providers and (allowed amounts) paid for out-of-network providers on a public website. This information would also have to be available to other stakeholders such as consumers, researchers, employer, and third party developers.

In addition, the proposed rule encourages new or different plan designs that incentivize consumers to shop for services from lower-cost, higher-value providers by enabling issuers to take credit for “shared savings” payments in their medical loss ratio calculations.

CMS solicits comments on whether group health plans and health insurance issuers should also be required to make the cost-sharing information available through a standards-based application programming interface. CMS also solicits comments on how healthcare quality information may be incorporated into the price transparency proposals. The CMS fact sheet for the proposed rule can be found here.

CMS will accept public comments in response to the proposed rule for 60 days from the date that the proposed rule is published in the Federal Register. Comments may be submitted electronically to www.regulations.gov, or by mail to: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-9915-P, P.O. Box 8010, Baltimore, MD 21244-8010.

*Special thanks to Hayley White and Rachel Park, Law Clerks and District of Columbia Bar licenses pending, for their assistance in preparing this post.