News: CMS proposes requirement for hospitals to publish standard prices online

As part of the fiscal year (FY) 2019 inpatient prospective payment system (IPPS) proposed rule released last week, CMS said they want to require hospitals to publish a list of their standard charges in a machine-readable format online and update them once per year.

The Affordable Care Act actually already mandates publishing charges, according to Modern Healthcare, but the provision hasn’t been enforced as of yet.

Though this proposal would aim at greater transparency for patients, the proposed changes may be fraught with controversy and implementation complications. “Posting gross charges is misleading and inflammatory,” Joe Fifer, CEO of the Healthcare Financial Management Association, told Modern Healthcare. “I’d rather CMS focus on actual payments hospital receive and what patients are responsible for.”

Anticipating the potential backlash, CMS did ask for comments on a series of questions related to price transparency, including:

• How should “standard charges” be defined for the purposes of reporting?
• What type of information would be most beneficial to patients?
• Should providers be required to inform patients how much their out-of-pocket costs for a service will be before those patients receive the service?
• Should CMS require providers to give patients information about what Medicare pays for a particular service provided?

CMS cited the lack of transparency when patients face out-of-network bills from physicians who provide services at in-network hospitals as reason for these proposed changes, according to Modern Healthcare.

However, hospitals have previously pushed back on this type of transparency saying that insurers are better positioned to share costs with their members. In fact, the Ohio Hospital Association won a court injunction blocking implementation of a 2015 state law requiring providers to give patients out-of-pocket costs estimates for non-emergency services before treatment. According to Modern Healthcare, the law is still on hold.

“Having the federal government make a statement about greater transparency being an ingredient in the healthcare system sends a signal,” Suzanne Delbanco, executive director of Catalyst for Payment Reform, told Modern Healthcare. “This is an important step forward.”

Editor’s note: To read Modern Healthcare’s coverage of this story, click here. To read about the rest of the proposed changes from CMS, click here. To review the proposed rule in its entirety, click here.