The purpose of this bulletin is to alert hospitals to a Centers for Medicare and Medicaid Services (CMS) requirement for all hospitals regarding transparency and posting of standard charges as reflected in the chargemaster. The requirement is effective January 1, 2019.
The requirement applies to all hospitals. CMS guidance has not excluded any type of hospital. WSHA is not able to provide specific guidance beyond what has been communicated by CMS.
CMS has provided limited guidance regarding the requirements. WSHA recommends hospitals make effort to comply with the requirements as they are currently known. We recommend hospitals carefully review the included CMS Frequently Asked Questions (FAQs), the American Hospital Association advisory, and the WSHA guidance in this bulletin. Hospitals should consult with their legal counsel to make decisions regarding how best to comply with the requirements.
Although CMS solicited additional comments on price transparency in the rule, we do not expect them to provide significant additional guidance or clarification prior to the January 1, 2019 effective date.
We believe the posting of standard charges as reflected in the chargemaster will provide little help to patients in determining their potential costs of care. While this information must be posted under the CMS rule, WSHA recommends hospitals post it near more helpful information such as the hospital’s other pricing and transparency links like the WSHA Hospital Pricing Page. We also recommend hospitals provide information advising patients of their ability to request an estimate of charges and information regarding financial assistance (also referred to as charity care). As discussed in a recent WSHA bulletin, hospital are required under state law to make financial assistance information available on the hospital’s website.
The 2019 IPPS final rule (pages 2135-2142) requires “hospitals 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 rule, effective January 1, 2019, provides guidelines for an existing requirement from Section 2718(e) of the Public Health Service Act. The rule applies to “each hospital operating within the United States.”
The rule was finalized despite letters from the American Hospital Association (AHA), WSHA, and other state hospital associations. The associations commented that charge information would be of little benefit and would be confusing to consumers as it would not reflect their out of pocket costs. Despite these concerns, CMS is requiring hospitals to provide information for all items and services provided by the hospital based on the chargemaster. This is in contrast to other transparency initiatives and pricing links, which are generally focused on average charges for a subset of frequently provided services.
AHA, WSHA and other state hospital associations have been in contact with CMS staff and requested greater clarity and specificity regarding the requirements. In response, CMS provided a short set of FAQs that provide some additional detail of CMS’ expectations. Additionally, AHA provided a regulatory advisory based on conversations with CMS staff and leadership. WSHA has been in contact with staff from other state hospital associations to get an understanding of what guidance is being provided to hospitals in other states.
We understand CMS views the current requirement as an initial step and plans to expand transparency requirements in a more detailed way in future rulemaking.
Specifics of the Requirement
The final rule requires hospitals to make available a list of their current standard charges via the internet and to update it at least annually or more often as appropriate. We believe “via the internet” generally means via a link to the hospital’s website. This requirement can be met in the form of the chargemaster itself or another form of the hospital’s choice, as long as it is in a machine-readable format.
- Standard Charges: The term “Standard Charges” is not defined in the rule, other than it refers to “items and services as reflected in the chargemaster.” Some hospitals have asked if this requires the entire chargemaster to be posted. Hospitals have suggested, and we agree, that if this information is to be helpful to patients, it should be presented in a way to minimize the extraneous information that could confuse patients. Some hospitals are considering eliminating the CPT codes, HCPCS codes, revenue code, and other extraneous information in the chargemaster and only including the fields for the description of the service and the charge. It appears reasonable to include only the description of the service and the associated charge as reflected in the chargemaster.
- Services: The FAQ requires hospitals to include all items and services provided by the hospitals but does not address items or services that are not in the chargemaster itself. We recommend hospitals determine if and how to include these services in consultation with IT, patient accounts, and legal counsel.
- Machine Readable: According to the CMS FAQ, “machine readable format” is a format that can be imported/read into a computer system. The FAQ lists XML and CSV as examples of acceptable “machine readable format,” but there may be other formats that meet the criteria. The same FAQ specifically advised that PDF format is not acceptable as it is not easily read into a computer system. Hospitals should determine the format to use in consultation with IT staff and legal counsel.
- Timing of Updates: The new guidelines indicate hospitals should update the information “at least annually, or more often as appropriate”. We believe hospitals should determine whether changes to standard charges outside of a regular update schedule are significant enough to warrant an update to the posted information outside of a regular annual update.
WSHA, along with AHA and other hospital organizations, will continue to engage with CMS to offer feedback and gain clarification on the new guidelines and other federal price transparency efforts. We will continue to update members as additional information becomes available. If you have further questions for WSHA, please contact Andrew Busz, Policy Director, Finance at firstname.lastname@example.org or (206) 216-2533. If you have questions for AHA, contact Ariel Levin, Senior Associate Director of Policy, at email@example.com.
Background and References
- CMS, “Frequently Asked Questions Regarding Requirements for Hospitals To Make Public a List of Their Standard Charges via the Internet”
- AHA Update, “Additional Information on CMS’s Updated Price Transparency Guidance”