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CMS releases FAQs on hospital price transparency
Drug prices must be included under new rule
Ahead of a January 1, 2019, effective date for hospitals to post price information on publicly available websites, the Centers for Medicare and Medicaid Services (CMS) released frequently asked questions (FAQs) providing additional details about which goods and services provided by hospitals would be subject to the new price transparency requirement and how those prices should be made public.
December 13, 2018 | Health care
On December 13, 2018, CMS released a new set of FAQs outlining the details of new Medicare conditions of participation related to hospital price transparency. Importantly, the document states that prices for drugs must be included in the data that hospitals release.
The new requirements stem from the 2019 Inpatient Prospective Payment System final rule, in which CMS finalized a change to the policy that will require hospitals to make public a list of their standard charges via the Internet in a machine-readable format. The information could take the form of the chargemaster itself or another form of the hospital’s choice. The final rule also will require hospitals to update this information at least annually.
Hospitals currently are required to make standard charges available to the public, although the format is not specified.
CMS states that it is reviewing public comments on how best to define standard charges, what information would be most useful to beneficiaries, and other operational aspects of achieving broad-based price transparency in health care. CMS said any further policy changes related to price transparency could be made via notice and comment rulemaking.
Below are highlights from the new FAQ.
Key clarifications in the FAQ:
The price transparency requirement applies to all hospitals in the United States and includes Inpatient Rehabilitation Facilities, Inpatient Psychiatric Hospitals, as well as Critical Access and Sole Community Hospitals.
Hospitals are required to make public a list of the hospital’s standard charges for all items and services provided by the hospital, including all drugs, biologicals, and all other items and services provided by the hospital.
The FAQs clarify that although the chargemaster is the primary source for price information, hospitals will be required to post prices for all drugs and biologicals even if they are not part of the hospital’s chargemaster.
As per existing rules, hospitals are required to establish, update, and make public a list of their standard charges, including packaging the information into diagnosis-related groups, as defined in the statute. Nevertheless, the hospitals may still choose the most convenient format for standard charges for each diagnosis-related group.
The FAQs note that a hospital may elect to post additional pricing information beyond the new requirements.
The new requirement for machine-readability of charges precludes the use of PDFs, as these documents are not readily imported into computer systems. Examples of machine-readable formats include XML and CSV formats.
While the FAQs state that a hospital that fails to make public a list of its standard charges via the Internet will not be in compliance with the law, CMS clarifies that no enforcement mechanism has been established and that enforcement guidelines will be addressed in future rulemaking.
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