The Trump administration proposed that every U.S. hospital participating in Medicare must publish the prices they negotiate with payers for standard services and items in a bid to boost transparency.
The Centers for Medicare & Medicaid Services outlined the requirements for hospitals on Monday as part of a proposed rule for the Outpatient Prospective Payment System. The rule goes further than a rule that went into effect this year that requires hospitals to post list prices on their websites.
“Hospitals will finally have to make their real, negotiated prices known to patients, enabling patients to shop among providers,” Department of Health and Human Services Secretary Alex Azar said in a statement on Monday.
The proposal, which would go into effect in 2020, includes definitions for a standard charge and for a hospital. CMS considers a hospital to be any facility that is licensed in a state as a hospital that receives Medicare patients.
A hospital must make public two types of charges for products and services: a list price and a payer-specific negotiated price, CMS said. Hospitals must have these prices available starting on Jan. 1, 2020, for 300 common shoppable services such as lab tests or certain clinical visits.
The charges must be published on the internet in a “machine-readable file that includes additional information such as common billing or accounting codes used by the hospital … and a description of the item or service.” The information must be in a “prominent location” online or available via a written form upon request.
“It also means the service descriptions are in ‘plain language’ and the shoppable service charges are displayed and grouped with charges for any ancillary services the hospital customarily provides with the primary shoppable service,” the agency said.
Any hospital that doesn’t comply with the rule could face penalties of up to $300 a day, the agency added.
The stiff penalty is a nod to a lack of compliance with the current requirement starting this year that hospitals post their list prices in an easily readable format.
“We heard the way hospitals display their information is all different,” CMS Administrator Seema Verma told reporters on a call Monday.
The rule is available now for comment. Hospitals will have from the time the rule is finalized to Jan. 1, 2020, to publish the list of prices. CMS also released a proposed payment rule for ambulatory surgical centers that would expand the number of services available at such centers.
The proposed rule would allow patients to get reimbursed by Medicare for new procedures at surgical centers that include total knee replacements and coronary procedures.
“We are ending hospital monopolies on these services and increasing competition to lower costs on Medicare beneficiaries,” Verma said.
The agency proposed raising payments for surgical centers by 2.7%, and hospitals will get a projected hike of 3.2%.
The proposed rule would continue to cut payments for drugs covered under the 340B drug discount program. The rule would continue a nearly 30% cut for drugs that was originally proposed to go into effect in 2018.
Hospitals have sued CMS over the cuts and 340B advocacy groups weren’t happy with the decision.
“By stating it will continue a nearly 30 percent cut in Medicare payments to many 340B hospitals, [HHS] is ignoring the findings of a federal court that the policy exceeds the government’s regulatory authority,” said Maureen Testeoni, president and CEO of the advocacy group 340B Health in a statement.