CMS Publishes Additional Guidance on Hospital Transparency Requirements

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Many readers are likely aware that as of January 1, 2019, hospitals became required to make public all the standard charges for items and services – including drugs and biologicals – even if not reflected on the hospital’s chargemaster.

The requirement, borne out of the Patient Protection and Affordable Care Act, mandates that all United States hospitals annually publish a list of their standard charges compliant with the manner specified by the Department of Health and Human Services (HHS). In the 2015 inpatient prospective payment system (IPPS) final rulemaking, Centers for Medicare and Medicaid Services (CMS) said that hospitals can comply with the law by making public their list of standard charges or their policies for allowing the public to view a list of those charges in response to an inquiry.

However, four years later, in the 2019 IPPS final rulemaking, CMS changed its guidelines for complying with the law because the agency was concerned that “challenges continue to exist for patients due to insufficient price transparency.” Under the revised guidelines, hospitals are now required to make available, and update annually, a list of their current standard charges via the internet in a machine-readable format.

In early October 2018, CMS published some FAQs about the transparency requirements. Those FAQs clarified some of the basic points, for example, that a “machine-readable” format is one that can be easily imported and read into a computer system.  XML and CSV are acceptable formats, but PDF is not. The FAQs also note that participation in a state online price transparency initiative does not satisfy the price transparency guidelines found in this regulation.

There were still some large questions looming after the first set of FAQs were released, however. Therefore, in early December 2018, CMS released a second set of FAQs with additional guidance. For example, the second set of FAQs make clear that the guidelines apply to all items and services provided by the hospital, including drugs and biologicals, and that IPPS hospitals must report their standard charges for each diagnosis-related group.

One of the biggest questions and uncertainties that remains, though, is what will happen to hospitals that fail to comply with the guidelines. Are there truly any practical consequences for such failure? CMS has so far only responded by stating the obvious, that “[t]he hospital will not be in compliance with the law,” and cryptically saying that “specific additional future enforcement or other actions that we may take with the guidelines will be addressed in future rulemakings.”

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