New Blog banner

CMS price transparency NPR

May 2, 2018

CMS Logo-1

On April 24, 2018, the Centers for Medicare and Medicaid Services (CMS) released an 1883-page proposed rule that, in addition to many other policy goals, seeks to increase price transparency and make electronic health records more interoperable.

Specifically, the proposed rule – the FY 2019 Medicare Hospital Inpatient Prospective Payment System and Long Term Acute Care Hospital Prospective Payment System Proposed Rule (CMS-1694-P) – would require hospitals to post their pricing lists online, accessible to patients in a “consumer-friendly” way, so that “patients understand what their potential financial liability might be for the services they obtain at the hospital, and to enable patients to compare charges for similar services across hospitals.”

Starting on January 1, 2019, hospitals will be required to “make available a list of their current standard charges via the Internet in a machine readable format and to update this information at least annually, or more often as appropriate.” The proposed rule specifies that this could be in the form of the chargemaster itself or another form of the hospital’s choice, as long as the information is in machine readable format.”

According to Health and Human Services (HHS) Secretary Alex Azar, this online public disclosure requirement is intended to reform the Medicare system so that “patients are put in charge of their care” and “receive the quality and price information needed to drive competition and increase value.” Under current law, hospitals are required to establish and make public a list of their standard charges; the proposed mandate is intended to improve and increase the accessibility and usability of the pricing information by a wider patient base.

CMS is also taking further steps to improve health care price transparency by issuing a Request for Information (RFI), asking stakeholders to comment on a number of price transparency issues, such as what information stakeholders would find most useful, and how best to help hospitals create patient-friendly interfaces to make it easier for consumers to access relevant data to more readily compare providers. CMS is considering making information on hospital noncompliance public. Hospitals could face additional enforcement mechanisms in future rulemaking if they fail to comply.

“These health care price transparency efforts are part of a larger effort to empower patients, while reducing administrative burdens and improving interoperability,” CMS Administrator Seema Verma added in a press release.

The rule would implement key components of the MyHealthEData initiative, a government-wide effort introduced in March intended to give patients more control of their own electronic health record (HER) data. Specifically, CMS is proposing to overhaul the Medicare and Medicaid Electronic Health Record Incentive Programs (the so-called “Meaningful Use” program) to:

  • make the program more flexible and less burdensome,
  • emphasize measures that require the exchange of health information between providers and patients, and
  • incentivize providers to make it easier for patients to obtain their medical records electronically.

CMS is rebranding “Meaningful Use” as the “Promoting Interoperability Programs” (PIP). PIP provides incentives to providers to revamp their electronic medical records in such a way that patients can easily access their electronic medical records and provide their records to providers at various treatment facilities. Beginning January 1, 2019, interoperability will be a major factor in determining hospitals’ federal rankings. It has been suggested that the failure to make such interoperability-focused improvements to electronic medical record systems could result in payment penalties in 2021.

While the price transparency requirements are a welcome development, it’s unclear whether or not these proposed rules (which are still subject to a public comment period and potential changes) will dramatically impact health care costs. Topline prices listed by hospitals, like those claimed by drug makers, typically are not the actual prices paid by insurers or patients. Net prices are negotiated largely behind the scenes by large health systems and insurers, so mandating price disclosures may not inform consumers how much they’ll actually pay out-of-pocket. Still, it is a step in the right direction, and hopefully a harbinger of things to come not only within Medicare, but the entire health care delivery system.

CMS will accept public comments on the proposed rule through June 25, 2018.


Proposed Rule (Full text)

CMS Fact Sheet

CMS Press Sheet