Hospitals Required to Make Price Lists Public, CMS Says

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By Michael D. Williamson

Oct. 21 — As of Oct. 1, hospitals are required to make lists of their charges for procedures and services public.

That move toward price transparency was supported by major hospital associations, according to comments representatives from both the Federation of American Hospitals and the American Hospital Association made to Bloomberg BNA.

However, a former CMS official now representing a state hospital association said the price transparency requirement is vague, which he said makes it difficult for hospitals to comply with the rule.

The requirement was in the Medicare hospital inpatient prospective payment system (IPPS) final rule issued Aug. 22.

According to the IPPS final rule, the Affordable Care Act amended Section2718(e) of the Public Health Service Act to require each hospital in the country to establish and make public a list of the hospital's prices for procedures. In addition, the ACA required hospitals to update their price list annually. The rule took effect Oct. 1.

Flexibility Appreciated

Jeff Micklos, FAH executive vice president and general counsel, told Bloomberg BNA Oct. 21 that his group appreciated that the CMS allowed hospitals to meet the price transparency requirement in a flexible manner.

The final rule said “hospitals are in the best position to determine the exact manner and method by which to make” the price list public. The rule never specified if the price list has to be posted in a specific place, whether online or at a physical location.

The rule said hospital charges are often billed, in full, to uninsured patients who cannot benefit from discounts negotiated by insurance companies.

As such, Micklos said insurers are important to price transparency efforts. Insured patients should check with their insurer about prices for hospital procedures and treatments, he said.

Vague Standard

However, Herb Kuhn, president and chief executive officer of the Missouri Hospital Association, said the price transparency requirement was “very general” in an Oct. 21 e-mail to Bloomberg BNA.

Kuhn, who formerly was director of the CMS's Center for Medicare Management, said the general nature of the rule “makes it difficult for hospitals to know exactly how to meet it, other than CMS encouraging hospitals to engage in a consumer friendly manner to meet the standard.”

Currently, Kuhn said, “[W]e are encouraging hospitals to post their charges for common procedures or post the information on how individuals can obtain that information. Perhaps in the future CMS will issue some sub-regulatory guidance to provide more clarification.”

In addition, Kuhn said his association is unaware of any penalties that apply should a hospital fail to comply with the new standard.

The Missouri Hospital Association is based in Jefferson City, Mo.

AHA Comments

In an Oct. 21 statement e-mailed to Bloomberg BNA, AHA spokeswoman Carly Moore said, “The AHA has long supported the need to provide patients with health care price and quality information and has worked with stakeholders, including HFMA [Healthcare Financial Management Association], to provide useful information that will help patients make health care decisions.”

The AHA has developed tools and resources to assist member institutions make price information available to patients, Moore said.

She told BNA that “[p]roviding understandable and useful information about the price of hospital care is one of the ways America's hospitals are working to improve the health of their communities.”

To contact the reporter on this story: Michael D. Williamson in Washington at mwilliamson@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

Information about the price transparency requirement is on pages 50,145 and 50,146 of the IPPS final rule at http://www.gpo.gov/fdsys/pkg/FR-2014-08-22/pdf/2014-18545.pdf.