A new Centers for Medicare & Medicaid Services (CMS) final rule aims to strengthen hospital price transparency regulations for 2024, a move physicians hope will address weaknesses in prior policy that hindered them and patients from making informed health care decisions.
The 2024 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center final rule requires hospitals in 2024 to make standard charges publicly available in a more consistent manner, according to a Nov. 2 press release. CMS aims to “make it easier for the public to learn what a hospital charges for a particular service, for third parties to develop consumer-friendly materials, for hospitals to comply, and for CMS to enforce the regulations,” per the statement.
“We believe the public should always know what a provider charges for their services. This rule shines a brighter light on hospital prices and gives CMS new tools to enforce these actions on behalf of patients,” U.S. Department of Health and Human Services Secretary Xavier Becerra said in the release.
Some of the new enforcement measures CMS seeks with the final rule include:
- Certification by hospital officials as to the accuracy and completeness of the machine-readable file data;
- Requiring hospital acknowledgment of warning notices;
- Reserving the right for CMS to communicate directly with health system leadership when a hospital with a compliance issue is found to be part of a health system; and
- Publishing other enforcement activities, in addition to civil monetary penalties, on a CMS website.
Hospitals’ lack of standardized, transparent prices has created a burden for physicians and patients, says Gary Sheppard, MD, chair of TMA’s Council on Socioeconomics.
“When CMS first came out with the transparency rules, hospitals struggled to start publishing it, and it was confusing,” said Dr. Sheppard, an internist in Houston. “Patients couldn't understand it. Doctors couldn't understand it. Hospitals would do it differently. One would look one way; one would look another. You couldn't really make a meaningful comparison, and that was the main issue.”
Dr. Sheppard hopes improved clarity in transparency regulations will allow patients to better navigate health care costs, especially those patients with high-deductible or catastrophic health insurance. Without accurate transparent prices, patients frequently misplace blame onto physicians, who are equally misled by the same inaccuracies.
“People are trying to figure out where their health care dollars are being spent,” he said. “[This hospital rule]] is also, to some extent, for physicians, because one hospital may appear to charge more for the same procedure, when in reality they don’t, based on the insurance, and the patients are balking. They say, ‘Well, my insurance is saying that they don't want to cover this,’ or ‘My portion is so much higher.’ But physicians really didn't know what the hospitals were charging.”
Whether CMS’ improvements make a difference in health care costs will take a while to tell, Dr. Sheppard says, and further decisions about price transparency may rely on those outcomes.
“TMA will continue to monitor and watch how this is affecting our members,” he said. “This is one step in a process.”