Hospital prices now mandated to be available
New Year’s Day is a day when many changes are made. One change in 2019 is that, as of Jan. 1, hospitals were required to post their price lists online in an effort to increase price transparency and empower consumers to make informed choices about their care.
That mandate stems from the Inpatient and Long-Term care Hospital Prospective Payment System final rule, released in August 2018, in which the Centers for Medicare and Medicaid Services included the requirement for hospitals to update their public price lists at least annually.
“The policies in the IPPS/LTCH PPS final rule further advance the agency’s priority of creating a patient-centered healthcare system by achieving greater price transparency, interoperability, and significant burden reduction so that hospitals can operate with better flexibility and patients have what they need to be active healthcare consumers,” CMS wrote in a fact sheet accompanying the final rule.
While hospitals can choose the format for presenting the data, as long as it’s machine-readable, the list must include all items and services provided by the facility, according to the CMS report.
“CMS encourages hospitals to undertake efforts to engage in consumer-friendly communication of their charges to help patients understand what their potential financial liability might be for services they obtain at the hospital, and to enable patients to compare charges for similar services across hospitals,” the agency said.
“A hospital is not precluded from posting quality information or price transparency information in addition to its current standard charges in its chargemaster.”
Locally, that information can be found for Drew Memorial Health System by visiting https://www.drewmemorial.org/?s=price+information and clicking on “Standard Charges.” Those that do will find a three-part Excel spreadsheet with the disclaimer:
“PLEASE BE AWARE that the average DRG (diagnosis-related group; a patient classification system that standardizes prospective payment to hospitals and encourages cost containment initiatives) and/or other amounts referenced in the accompanying data are not necessarily representative of the amount that a patient will be charged by Drew Memorial Health System.
“There are numerous factors which determine costs and charges to a patient’s account, including, but not limited to, complexity of diagnosis, complexity of treatment, complexity of procedure, charges of other providers, insurance status of patient, patient’s insurance carrier, patient’s deductible and co-pay limits, and other factors.
“Please do not consider any data on this website regarding charge amounts to be directly indicative of the amount that you will ultimately be charged. Rates are subject to change, periodically, without prior notice.”
The rule not only applies to traditional hospitals but to rehabilitation centers, critical access hospitals and psychiatric hospitals. There may be several differences, however, in what patients see and what the actual out-of-pocket price will be, as the DMHS disclaimer makes clear.
For payers, the mandate will publicize existing differences between hospital charge rates and reimbursement amounts.
The new rule offers an opportunity for health plans to share educational materials and strategies about how to shop for care, maximize the value of high-deductible plans and health savings accounts, and develop better financial management skills, claims healthpayerintelligence.com.
A fact sheet discussing major provisions of the final rule (CMS-1694-F) can be downloaded from the Federal Register at: https://www.federalregister.gov/public-inspection/.