Recently, the White House announced it will not postpone implementation of the hospital price transparency rule, set to take effect on January 1, 2021. Based on President Trump’s Executive Order on Improving Price and Quality Transparency in Healthcare, issued on June 24, 2019, CMS released the “Ambulatory Surgical Center (ASC) Price Transparency Requirements for Hospitals to Make Standard Charges Public Final Rule.” The rule allows patients to access hospital pricing information easily so that they have an idea of potential charges prior to receiving a bill and thus can shop for lower cost services.
Under the rule, hospitals are required to publish negotiated rates, gross charges, and discounted cash prices in a public, online format. The data must be free, in an easily accessible format, include a description of each item or service, and be updated yearly. Furthermore, hospitals must create a minimum of 300 “shoppable” healthcare services and display them in a consumer-friendly manner. Shoppable services are services that are often offered by multiple providers, so patients can research ahead of time and compare these services among various providers and make informed decisions on quality and cost. The goal is that as consumers have more price transparency and are more able to shop for their healthcare services, competition among hospitals and insurance providers will potentially increase and reduce healthcare costs as a result.
Hospitals oppose the transparency rule, claiming that it violates hospitals’ First Amendment rights and that CMS does not have the power to require hospitals to disclose their negotiated prices. Hospitals also claim the rule will increase administrative work, requiring more compliance costs. Although the American Hospital Association filed suit over the rule, a federal judge upheld it in June, concluding that CMS can mandate that hospitals reveal their negotiated prices. The AHA appealed the decision and oral arguments are scheduled for October 15.