New CMS Price Transparency Requirements Take Effect; Patients Encouraged to Contact Their Hospitals for More Information > Hospital Association of Pennsylvania


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New CMS Price Transparency Requirements Take Effect; Patients Encouraged to Contact Their Hospitals for More Information

January 02, 2019

A new federal requirement aimed at increasing hospital price transparency took effect January 1, 2019. In its 2019 inpatient prospective payment system (IPPS) final rule, the Centers for Medicare & Medicaid Services (CMS) updated its guidelines to require that all hospitals in the United States post a list of their standard charges—known as a chargemaster—on their websites in a machine-readable format updated at least annually.

Hospitals have been required to make charges available by patient request; the new rule adds a technical component to existing practice.

Pennsylvania hospitals are complying with federal requirements but they are also doing much more to help patients understand their chargemasters through:

  • Offering a special help-line number for billing/pricing questions
  • Having patient advocates and financial counselors on-hand to meet with families in person or via telephone call
  • Including a short, educational video—in non-medical terms—alongside the chargemaster page, so that patients can get insight and context into what the chargemaster represents

In a December 13 blog post, HAP President and CEO Andy Carter cautioned that—while the new CMS rule can help promote a better discussion about price transparency—a chargemaster can be an incomplete tool for consumers. “The chargemaster shows a hospital’s ‘list prices,” Carter wrote. “These charge rates represent standard or regular prices, not the actual—and typically much lower—payment rates that hospitals receive from health insurers, Medicare, and uninsured patients with low incomes.”

The charges that are published online as a result of this new requirement are the total amount that a hospital can bill a patient’s insurer. These charges do not take into account insurer-negotiated rates or discounts that patients might receive based on individual financial situations or paying cash for their care. In the vast majority of cases, patients will pay an amount lower than the charges listed on a chargemaster.

Carter also underscored the need for patients to have as much information as they can get to make the best decisions about individual care, and encouraged patients to contact their hospital to ask questions to get a clear sense of their total financial responsibility. Carter offered three tips for patients:

  • “Using the price estimators and provider network information available at health plan websites
  • “Asking hospitals for help estimating out-of-pocket costs
  • “Talking about quality, value, and cost with doctors or other health care providers when considering treatment options”

For more information about the new CMS price transparency rule, contact Jolene Calla, HAP’s vice president, health care finance and insurance. 

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