The Centres for Medicare & Medicaid Services (CMS) has recently issued its first fines for failure to comply with federal price transparency rules that took effect in January 2021. Northside Hospital Atlanta and Northside Hospital Cherokee each failed to make available a consumer-friendly list of 300 shoppable services.
The CMS is the US government agency within the Department of Health that administers the nation’s major health care programmes. It has brought in new price transparency rules for USA patients, seeking to empower patients with price transparency and increase competition to lower costs for Medicare beneficiaries. The rules make hospitals show the prices they charge insurers as well as the book prices for self-paying customers.
In January 2021, the Hospital Price Transparency Rule was signed, mandating that hospitals publish their prices online in a consumer-friendly format, and giving the CMS the power to fine hospitals that do not comply. The rule took effect on July 1st 2022, following a six-month delay in implementation to allow payers to come into compliance. It aims to create a more equitable, cost-effective market for medical cover and introduces a level of transparency that has long been needed in the industry.
The rule requires group health plans and health insurance issuers offering cover in the group and individual markets to disclose online, in machine-readable files, their in-network provider rates and out-of-network allowed amounts and billed charges. The machine-readable file requirements are applicable for plan years beginning on or after January 1, 2022.
Health plans are required to publish all applicable rates, which may include negotiated rates, underlying fee schedule rates, or derived amounts for all covered items and services in the In-network Rate File. Plans that use underlying fee schedule rates for calculating cost sharing must include the underlying fee schedule rates in addition to negotiated rates or derived amounts.
All purchasers of healthcare insurance will get a window into what their premiums are and in turn, consumers will be empowered with the information needed to make more informed healthcare decisions.
As part of a continued effort to assist individuals to effectively shop for items and services, on or after January 1, 2023, payers will be required to make available a list of 500 services that will allow people to receive an estimate of their cost-sharing responsibility.
Innovators in the healthcare industry are working to ingest the data to make it easier for employers and consumers to access and interpret.
Northside Hospital Atlanta and Northside Hospital Cherokee each failed to make available a consumer-friendly list of 300 shoppable services and were fined US$1.1 million.