Hospitals Begin Posting Charges for Healthcare Services, but Oversight Still Missing

Since the start of January, hospitals are required by CMS to post their charges for services in a machine-readable format, but if they don’t, there are no penalties for noncompliance.

In a press call with reporters to discuss the rollout of the new rule, which went into effect January 1, CMS Administrator Seema Verma said the agency is gathering comments from stakeholders about the implementation of the requirement. She emphasized that the change is part of the agency’s price transparency efforts, with the idea that third-party app developers would create tools to make the information understandable to consumers.

“Patients are a driving force to improve quality and value,” said Verma. Without price transparency, “they cannot seek out the highest quality service at the lowest cost.”

The prices that hospitals are required to post are the chargemaster prices, meaning the price that would be charged to someone without insurance. There is also no way for consumers to know what out-of-pocket costs would be after insurance, or in the case of Medicare, what CMS covers.

The rule is a minimum bar, meaning hospitals can go beyond it if they want to post more detailed, or user-friendly information, Verma said.

Observers have also noted that there is no requirement stating where on a hospital website the information should be posted, and that not all of them are easy to find. If a hospital does not post the charges, there is no current enforcement mechanism.

Verma would not state a timeline for when discussions with stakeholders regarding penalties and enforcement would conclude. CMS also does not know how many hospitals have complied. The rule does not currently affect community health centers, but that is something CMS is looking at, she said.

Verma said she thinks posting the prices will encourage competition, thus helping to bring healthcare prices down. “Price transparency is critical to making healthcare more affordable,” she said. She also thinks patients will have information to make more informed decisions.

So far, however, efforts to connect price transparency to the way patients seek healthcare services have not incorporated every possible factor. For instance, a study published in the June 2017 issue of The American Journal of Managed Care^® found that, while patients were interested in price transparency information, there was a disconnect between their enthusiasm for the idea and their reported use of a well-known price transparency tool called Castlight. Barriers to using price information for choosing care included the importance of the idea of price shopping for care and factors such as provider loyalty.