Posted In: Health Care
By Laura F. Fryan & Nicole M. Thorn on November 19, 2019
Two new rules — one proposed and one final — were issued by the Centers for Medicare and Medicaid (CMS) last week that effectuate President Trump’s promise to provide health care consumers with more transparency in their health care decisions. In doing so, the President’s goal is to allow for more competition in the market among hospitals, group health insurance plans, and health insurance companies. All health care providers should check the status of state laws as well because price transparency is sweeping the nation on a state level too.
The Final Rule: This is one that most hospitals were expecting in the 2020 CMS Final Rules, but the CMS Administrator, Seema Verma, indicated we would find it in a separate rulemaking. It requires hospitals to provide publicly, including on their websites, their “standard charges” which include their gross charge amounts, as well as their negotiated minimum and maximum payment amounts for 300 shoppable services beginning in January 2021. These services include items or services that could be scheduled in advance such as radiology and laboratory services, outpatient visits, and cesarean delivery and post-delivery care. It also requires hospitals to provide the amount they would accept in cash from a patient. This information must include the HCPCS codes and descriptions, and all must be provided in a “machine-readable format” such that consumers can compare services across multiple providers so that they can choose what they believe to be their best option. Hospitals that are not compliant beginning in 2021 will be subject to Civil Monetary Penalties of $300 per day.
More information on the hospital requirement may be found on this CMS fact sheet located at: https://www.cms.gov/newsroom/fact-sheets/cy-2020-hospital-outpatient-prospective-payment-system-opps-policy-changes-hospital-price.
The Proposed Rule: This requires health insurers and group health plans to provide their negotiated rates to their members and enrollees. By providing price and cost-sharing information up-front, the Departments of Health and Human Services, Treasury, and Labor share the goal of allowing consumers to better understand what their out-of-pocket costs may be and give them tools that allow them to shop for their services in the same manner as consumers in any other industry do today. This information must be provided in a searchable form online to all of its enrollees and must be provided on paper when requested. Their public websites must disclose their negotiated rates for in-network providers and allowed amounts for out-of-network providers. Open for comments for 60 days, this rule, if passed, would be in effect for plan years beginning on or after one year after the finalization of the rule — likely some time in 2021.
More information on the insurers’ proposed requirement may be found here: https://www.cms.gov/newsroom/fact-sheets/transparency-coverage-proposed-rule-cms-9915-p
State Laws: Sixteen states have implemented what is referred to as mandatory all-payer claims databases to collect and house health care price and quality information. Half of these states allow consumers to directly access price and quality information through state-based websites. Other states like Ohio have introduced bills to require health care providers to publish price information online and give patients estimates when requested. Transparency is a buzz word that you’ll be hearing more and more as applied to the health care industry, so be sure to keep abreast of your specific state laws in addition to federal legislation.
Brouse McDowell’s Health Care Practice Group provides legal guidance, including compliance assistance, to all types of health care providers and health care-related entities. If you have any questions about this topic or others, please contact our health care team.
This blog is intended to provide information generally and to identify general legal requirements. It is not intended as a form of, or as a substitute for legal advice. Such advice should always come from in-house or retained counsel. Moreover, if this Blog in any way seems to contradict advice of counsel, counsel's opinion should control over anything written herein. No attorney client relationship is created or implied by this Blog. © 2019 Brouse McDowell. All rights reserved.