As we step into a new year, significant updates to federal hospital price-transparency rules are taking effect, making it crucial for patients to understand the implications for their healthcare choices. The Centers for Medicare and Medicaid Services (CMS) is ramping up enforcement of these rules as part of a broader initiative that began in 2021. This year marks the third and final phase of this initiative, aimed at empowering consumers with clear and accessible pricing information.
Key Updates to Price Transparency
The latest updates, effective January 1st, require hospitals to include three new data points in their public price files: the “estimated allowed amount,” details on drug measurements, and billing modifiers. These changes are designed to create consistency and ease the process of comparing prices across different providers.
- Estimated Allowed Amount: This new requirement compels hospitals to disclose the average payment they historically receive from insurers for specific services or procedures. Previously, hospitals often left these fields blank, making it difficult for patients to anticipate costs.
- Drug Reporting: By standardizing how drug types and units of measurement are reported, these changes aim to make medication cost comparisons more straightforward.
- Billing Modifiers: The inclusion of billing modifiers helps standardize the coding and pricing of services. These two-digit codes provide essential details about procedures, such as whether they were performed on both sides of the body or repeated.
The Impact on Patients
For patients, these updates in price-transparency mean more clarity for making informed healthcare decisions. However, recent findings from the nonprofit, Patient Rights Advocate, reveal that only about 21.1% of the 2,000 U.S. hospital websites analyzed are fully compliant with the rules. This highlights the ongoing challenge of ensuring widespread adherence to transparency mandates.
Jim Rodriguez, President and CEO of TexHealth, notes that while only about 20% of hospitals currently comply with the mandate to post their pricing, the anticipated increased enforcement by CMS is a promising move. He comments, “This step is a promising move toward empowering consumers with the information they need to make informed healthcare decisions. For those of us advocating for transparency in healthcare, it’s encouraging to see more discussions about hospital pricing rules.”
President Rodriguez is also optimistic about the introduction of the “estimated allowed amount,” which will give consumers a clearer picture about the potential costs of specific services and procedures, and empower them to make informed decisions.
He advises, “When reviewing your policy, ensure the allowed amount is considered payment in full. If not, you might be responsible for:
- Paying the remaining balance,
- A percentage of the total bill, or
- A copay.
Being informed about potential costs before receiving services is crucial—just as it is for any other service you pay for. Transparency and preparation can help you avoid unexpected expenses and make better decisions for your health and budget.”
In conclusion, while there is still work to be done to achieve full compliance across all hospitals, the ongoing efforts by CMS and the introduction of new data points are positive steps toward greater price transparency in healthcare.