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A Price Estimator Does Not Mean Price Transparency Compliance

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There’s been a lot of confusion around how to comply with the new hospital price transparency requirements for January 1, 2021. The requirements were finalized on November 15, 2019 to follow directives outlined in President Trump’s Executive Order: “Improving Price and Quality Transparency in American Healthcare to Put Patients First”. In summary, the final rule has two distinct components, each of which must be addressed to be considered compliant with the rule.

The rule requires that hospitals:

  • Display a list of shoppable services in a consumer-friendly manner
  • AND that hospitals publicly disclose standard charges for all items and services in a comprehensive machine-readable file.

The Centers for Medicare & Medicaid Services (CMS) stated that hospitals that voluntarily offer an internet-based price estimator tool will be deemed to have met the requirements for display of shoppable services. However, they emphasized in the final rule that “hospitals would still be required to publish all standard charges in a machine-readable file consistent with the requirements we finalized…”.

In other words, just because your facility has a price estimator tool, that does not mean you have met all of the hospital price transparency requirements for 2021. A price estimator that will allow healthcare consumers to obtain an estimate of the amount that they will be obligated to pay the hospital for selected shoppable services meets the “shoppable items” requirement, but not the “standard charges” requirement.

In other words, just because your facility has a price estimator tool, that does not mean you have met all of the hospital price transparency requirements for 2021. A price estimator that will allow healthcare consumers to obtain an estimate of the amount that they will be obligated to pay the hospital for selected shoppable services meets the “shoppable items” requirement, but not the “standard charges” requirement. It is important (and required) to publish a list of standard charges for all items and services provided by the hospital in a machine-readable format, such as .JSON, .XML, or .CSV on a publicly available website that is easily accessible.

Although CMS is not dictating the exact manner in which the files must be displayed, they are very clear that they must contain all five of the defined standard charges as well as any code used by the hospital for purposes of accounting or billing, and that the files must be in a machine-readable format that is easily accessible without barriers and without cost to the consumer.

The five standard charges required are:

  • Gross charge
  • Cash price
  • De-identified minimum charge
  • De-identified maximum charge
  • Payer-specific negotiated charges

It is critical that facilities comply with both public disclosure requirements by providing a list of shoppable services (or a price estimator tool) in addition to providing a list of standard charges for all items and services provided by the hospital on a publicly available website. Failure to comply with either of these provisions may result in further action from CMS, up to and including civil monetary penalties of $300 per day per facility.

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