Medicare and Medicaid Programs: CY 2020 Hospital Outpatient PPS Policy Changes and Payment Rates and Ambulatory Surgical Center Payment System Policy Changes and Payment Rates. Price Transparency Requirements for Hospitals To Make Standard Charges Public, 65524-65606 [2019-24931]
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Federal Register / Vol. 84, No. 229 / Wednesday, November 27, 2019 / Rules and Regulations
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
instructions on that website to view
public comments.
45 CFR Subchapter E
Current Procedural Terminology (CPT)
Copyright Notice
[CMS–1717–F2]
RIN 0938–AU22
Medicare and Medicaid Programs: CY
2020 Hospital Outpatient PPS Policy
Changes and Payment Rates and
Ambulatory Surgical Center Payment
System Policy Changes and Payment
Rates. Price Transparency
Requirements for Hospitals To Make
Standard Charges Public
Table of Contents
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Final rule.
AGENCY:
This final rule establishes
requirements for hospitals operating in
the United States to establish, update,
and make public a list of their standard
charges for the items and services that
they provide. These actions are
necessary to promote price transparency
in health care and public access to
hospital standard charges. By disclosing
hospital standard charges, we believe
the public (including patients,
employers, clinicians, and other third
parties) will have the information
necessary to make more informed
decisions about their care. We believe
the impact of these final policies will
help to increase market competition,
and ultimately drive down the cost of
health care services, making them more
affordable for all patients.
DATES: This final rule is effective on
January 1, 2021.
FOR FURTHER INFORMATION CONTACT:
Price Transparency of Hospital
Standard Charges, contact Dr. Terri
Postma or Elizabeth November, (410)
786–8465 or via email at
PriceTransparencyHospitalCharges@
cms.hhs.gov.
Quality Measurement Relating to
Price Transparency, contact Dr. Reena
Duseja or Dr. Terri Postma via email at
PriceTransparencyHospitalCharges@
cms.hhs.gov.
SUMMARY:
Inspection
of Public Comments: All comments
received before the close of the
comment period are available for
viewing by the public, including any
personally identifiable or confidential
business information that is included in
a comment. We post all comments
received before the close of the
comment period on the following
website as soon as possible after they
have been received: https://
www.regulations.gov/. Follow the search
SUPPLEMENTARY INFORMATION:
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Throughout this final rule, we use
CPT codes and descriptions to refer to
a variety of services. We note that CPT
codes and descriptions are copyright
2018 American Medical Association. All
Rights Reserved. CPT is a registered
trademark of the American Medical
Association (AMA). Applicable Federal
Acquisition Regulations (FAR) and
Defense Federal Acquisition Regulations
(DFAR) apply.
I. Summary and Background
A. Executive Summary
B. Statutory Basis and Current Guidance
II. Requirements for Hospitals To Make
Public a List of Their Standard Charges
A. Introduction and Overview
B. Definition of ‘‘Hospital’’ and Hospitals
Regarded as Having Met Requirements
C. Definition of ‘‘Items and Services’’
Provided by Hospitals
D. Definitions for Types of ‘‘Standard
Charges’’
E. Requirements for Public Disclosure of
All Hospital Standard Charges for All
Items and Services in a Comprehensive
Machine-Readable File
F. Requirements for Displaying Shoppable
Services in a Consumer-Friendly Manner
G. Monitoring and Enforcement of
Requirements for Making Standard
Charges Public
H. Appeals Process
III. Comments Received in Response To
Request for Information: Quality
Measurement Relating to Price
Transparency for Improving Beneficiary
Access to Provider and Supplier Charge
Information
IV. Collection of Information Requirements
A. Response to Comments
B. ICR for Hospital Price Transparency
V. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Anticipated Effects
D. Alternatives Considered
E. Accounting Statement and Table
F. Regulatory Reform Analysis Under E.O.
13771
G. Conclusion
Regulation Text
I. Summary and Background
A. Executive Summary
1. Purpose
In this final rule, we establish
requirements for all hospitals (including
hospitals not paid under the Medicare
Outpatient Prospective Payment System
(OPPS)) in the United States for making
hospital standard charges available to
the public pursuant to section 2718(e) of
the PHS Act, as well as an enforcement
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scheme under section 2718(b)(3) of the
PHS Act to enforce those requirements.
These requirements, as well as the
enforcement scheme, are additionally
authorized by section 1102(a) of the
Social Security Act.
This final rule also addresses
comments we received on our proposals
to implement section 2718(b) and (e), as
well as a request for information on
quality measurement relating to price
transparency included in the ‘‘Medicare
Program; Proposed Changes to Hospital
Outpatient Prospective Payment and
Ambulatory Surgical Center Payment
Systems and Quality Reporting
Programs; Price Transparency of
Hospital Standard Charges; Proposed
Revisions of Organ Procurement
Organizations Conditions of Coverage;
Proposed Prior Authorization Process
and Requirements for Certain Covered
Outpatient Department Services;
Potential Changes to the Laboratory Date
of Service Policy; Proposed Changes to
Grandfathered Children’s HospitalsWithin-Hospitals’’ (84 FR 39398 through
39644), herein referred to as the ‘‘CY
2020 OPPS/ASC proposed rule,’’ which
was displayed in the Federal Register
on July 29, 2019, with a comment
period that ended on September 27,
2019.
The final rule with comment period
titled ‘‘Medicare Program: Changes to
Hospital Outpatient Prospective
Payment and Ambulatory Surgical
Center Payment Systems and Quality
Reporting Programs; Revisions of Organ
Procurement Organizations Conditions
of Coverage; Prior Authorization Process
and Requirements for Certain Covered
Outpatient Department Services;
Potential Changes to the Laboratory Date
of Service Policy; Changes to
Grandfathered Children’s HospitalsWithin-Hospitals; Notice of Closure of
Two Teaching Hospitals and
Opportunity to Apply for Available
Slots,’’ referred to hereinafter as the ‘‘CY
2020 OPPS/ASC final rule with
comment period,’’ was displayed in the
Federal Register on November 1, 2019.
In that final rule with comment period,
we explained our intent to summarize
and respond to public comments on the
proposed requirements for hospitals to
make public their standard charges in a
forthcoming final rule. This final rule is
being published as a supplement to the
CY 2020 OPPS/ASC final rule with
comment period.
2. Summary of the Major Provisions
We are adding a new Part 180—
Hospital Price Transparency to Title 45
of the Code of Federal Regulations (CFR)
that will codify our regulations on price
transparency that implement section
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Federal Register / Vol. 84, No. 229 / Wednesday, November 27, 2019 / Rules and Regulations
2718(e) of the PHS Act. In this final
rule, we are finalizing the following
policies: (1) A definition of ‘‘hospital’’;
(2) definitions for five types of
‘‘standard charges’’ (specifically, gross
charges and payer-specific negotiated
charges, as proposed, plus the
discounted cash price, the de-identified
minimum negotiated charge, and the deidentified maximum negotiated charge)
that hospitals would be required to
make public; (3) a definition of hospital
‘‘items and services’’ that would include
all items and services (both individual
and packaged) provided by the hospital
to a patient in connection with an
inpatient admission or an outpatient
department visit; (4) federally owned/
operated facilities are deemed to have
met all requirements; (5) requirements
for making public a machine-readable
file that contains a hospital’s gross
charges and payer-specific negotiated
charges, as proposed, plus discounted
cash prices, the de-identified minimum
negotiated charge, and the de-identified
maximum negotiated charge for all
items and services provided by the
hospital; (6) requirements for making
public payer-specific negotiated
charges, as proposed, plus discounted
cash prices, the de-identified minimum
negotiated charge, and the de-identified
maximum negotiated charge, for 300
‘‘shoppable’’ services that are displayed
and packaged in a consumer-friendly
manner, plus a policy to deem hospitals
that offer internet-based price estimator
tools as having met this requirement; (7)
monitoring hospital noncompliance
with requirements for publicly
disclosing standard charges; (8) actions
that would address hospital
noncompliance, which include issuing a
written warning notice, requesting a
corrective action plan (CAP), and
imposing civil monetary penalties
(CMPs) on noncompliant hospitals and
publicizing these penalties on a CMS
website; and (9) appeals of CMPs.
3. Summary of Costs and Benefits
We estimate the total burden for
hospitals to review and post their
standard charges for the first year to be
150 hours per hospital at $11,898.60 per
hospital for a total burden of 900,300
hours (150 hours × 6,002 hospitals) and
total cost of $71,415,397 ($11,898.60 ×
6,002 hospitals), as discussed in section
V of this final rule. We estimate the total
annual burden for hospitals to review
and post their standard charges for
subsequent years to be 46 hours per
hospital at $3,610.88 per hospital for a
total annual burden for subsequent
years of 276,092 hours (46 hours × 6,002
hospitals) and total annual cost of
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$21,672,502 ($3,610.88 × 6,002
hospitals).
B. Statutory Basis and Current Guidance
Section 1001 of the Patient Protection
and Affordable Care Act (ACA) (Pub. L.
111–148), as amended by section 10101
of the Health Care and Education
Reconciliation Act of 2010 (Pub. L. 111–
152), amended Title XXVII of the PHS
Act, in part, by adding a new section
2718(e) of the PHS Act. Section 2718 of
the PHS Act, entitled ‘‘Bringing Down
the Cost of Health Care Coverage,’’
requires each hospital operating within
the United States for each year to
establish (and update) and make public
a list of the hospital’s standard charges
for items and services provided by the
hospital, including for diagnosis related
groups (DRGs) established under section
1886(d)(4) of the Social Security Act
(SSA).
In the FY 2015 inpatient prospective
payment system (IPPS)/long-term care
hospital (LTCH) prospective payment
system (PPS) proposed and final rules
(79 FR 28169 and 79 FR 50146,
respectively), we reminded hospitals of
their obligation to comply with the
provisions of section 2718(e) of the PHS
Act and provided guidelines for its
implementation. At that time, we
required hospitals to either make public
a list of their standard charges or their
policies for allowing the public to view
a list of those charges in response to an
inquiry. In addition, we stated that we
expected hospitals to update the
information at least annually, or more
often as appropriate, to reflect current
charges. We also encouraged hospitals
to undertake efforts to engage in
consumer-friendly communication of
their charges to enable consumers to
compare charges for similar services
across hospitals and to help consumers
understand what their potential
financial liability might be for items and
services they obtain at the hospital.
In the FY 2019 IPPS/LTCH PPS
proposed rule and final rule (83 FR
20164 and 83 FR 41144, respectively),
we again reminded hospitals of their
obligation to comply with the
provisions of section 2718(e) of the PHS
Act and updated our guidelines for its
implementation. The announced update
to our guidelines became effective
January 1, 2019, and took one step to
further improve the public accessibility
of standard charge information.
Specifically, we updated our guidelines
to require hospitals to make available a
list of their current standard charges via
the internet in a machine-readable
format and to update this information at
least annually, or more often as
appropriate. We subsequently published
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two sets of Frequently Asked Questions
(FAQs) 1 that provided additional
guidance to hospitals, including a FAQ
clarifying that while hospitals could
choose the format they would use to
make public a list of their standard
charges, the publicly posted information
should represent their standard charges
as reflected in the hospital’s
chargemaster. We also clarified that the
requirement applies to all hospitals
operating within the United States and
to all items and services provided by the
hospital.
II. Requirements for Hospitals To Make
Public a List of Their Standard Charges
A. Introduction and Overview
1. Background
As healthcare costs continue to rise,
healthcare affordability has become an
area of intense focus. Healthcare
spending is projected to consume
almost 20 percent of the economy by
2027.2 One reason for this upward
spending trajectory is the lack of
transparency in healthcare pricing.3 4 5 6
Numerous studies suggest that
consumers want greater healthcare
pricing transparency. For example, a
study of high deductible health plan
enrollees found that respondents
wanted additional healthcare price
information so they could make more
informed decisions about where to seek
1 Available at: https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/Acute
InpatientPPS/Downloads/FAQs-Req-HospitalPublic-List-Standard-Charges.pdf and https://
www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/ProspMedicareFeeSvcPmtGen/
Downloads/Additional-Frequently-AskedQuestions-Regarding-Requirements-for-HospitalsTo-Make-Public-a-List-of-Their-Standard-Chargesvia-the-internet.pdf.
2 CMS. National Health Expenditures Projections,
2018–2027: Forecast Summary. Available at:
https://www.cms.gov/Research-Statistics-Data-andSystems/Statistics-Trends-and-Reports/National
HealthExpendData/Downloads/Forecast
Summary.pdf.
3 Scheurer D. Lack of Transparency Plagues U.S.
Health Care System. The Hospitalist. 2013 May;
2013(5). Available at: https://www.thehospitalist.org/hospitalist/article/125866/healthpolicy/lack-transparency-plagues-us-health-caresystem.
4 Bees J. Survey Snapshot: Is Transparency the
Answer to Rising Health Care Costs? New England
Journal of Medicine Catalyst. March 20, 2019.
Available at: https://catalyst.nejm.org/health-carecost-transparency-answer/.
5 Wetzell S. Transparency: A Needed Step
Towards Health Care Affordability. American
Health Policy Institute. March, 2014. Available at:
https://www.americanhealthpolicy.org/Content/
documents/resources/Transparency%20Study%201
%20-%20The%20Need%20for%20Health%20Care
%20Transparency.pdf.
6 Robert Wood Johnson Foundation. How Price
Transparency Can Control the Cost of Health Care.
March 1, 2016. Available at: https://www.rwjf.org/
en/library/research/2016/03/how-pricetransparency-controls-health-care-cost.html.
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Federal Register / Vol. 84, No. 229 / Wednesday, November 27, 2019 / Rules and Regulations
care based on price.7 Health economists
and other experts state that significant
cost containment cannot occur without
widespread and sustained transparency
in provider prices.8 We believe there is
a direct connection between
transparency in hospital standard
charge information and having more
affordable healthcare and lower
healthcare coverage costs. We believe
healthcare markets could work more
efficiently and provide consumers with
higher-value healthcare if we promote
policies that encourage choice and
competition.9 As we have stated on
numerous occasions, we believe that
transparency in healthcare pricing is
critical to enabling patients to become
active consumers so that they can lead
the drive towards value.10
Many empirical studies have
investigated the impact of price
transparency on markets, with most
research, consistent with predictions of
standard economic theory, showing that
price transparency leads to lower and
more uniform prices.11 Traditional
economic analysis suggests that if
consumers were to have better pricing
information for healthcare services,
providers would face pressure to lower
prices and provide better quality care.12
Falling prices may, in turn, expand
consumers’ access to healthcare.13
Presently, however, the information
that healthcare consumers need to make
informed decisions based on the prices
of healthcare services is not readily
available. The Government
Accountability Office (GAO) report
(2011), ‘‘Health Care Price
Transparency: Meaningful Price
Information is Difficult for Consumers
7 Sinaiko AD, et al. Cost-Sharing Obligations,
High-Deductible Health Plan Growth, and Shopping
for Health Care: Enrollees with Skin in the Game.
JAMA Intern Med. March 2016; 176(3), 395–397.
Available at: https://jamanetwork.com/journals/
jamainternalmedicine/fullarticle/2482348.
8 Boynton A, and Robinson JC. Appropriate Use
Of Reference Pricing Can Increase Value. Health
Affairs. July 7, 2015. Available at: https://
www.healthaffairs.org/do/10.1377/hblog20150707.
049155/full/.
9 Azar AM, Mnuchin ST, and Acosta A.
‘‘Reforming America’s Healthcare System Through
Choice and Competition.’’ December 3, 2018.
Available at: https://www.hhs.gov/sites/default/
files/Reforming-Americas-Healthcare-SystemThrough-Choice-and-Competition.pdf.
10 Bresnick J. Verma: Price Transparency Rule a
‘‘First Step’’ for Consumerism. January 11, 2019.
Available at: https://healthpayerintelligence.com/
news/verma-price-transparency-rule-a-first-step-forconsumerism.
11 Congressional Research Service Report for
Congress: Does Price Transparency Improve Market
Efficiency? Implications of Empirical Evidence in
Other Markets for the Healthcare Sector, July 24,
2007 (updated April 29, 2008). Available at: https://
crsreports.congress.gov/product/pdf/RL/RL34101.
12 Ibid.
13 Ibid.
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to Obtain Prior to Receiving Care,’’ 14
found that healthcare price opacity,
coupled with the often wide pricing
disparities for particular procedures
within the same market, can make it
difficult for consumers to understand
healthcare prices and to effectively shop
for value. The report references a
number of barriers that make it difficult
for consumers to obtain price estimates
in advance for healthcare services. Such
barriers include the difficulty of
predicting healthcare service needs in
advance, a complex billing structure
resulting in bills from multiple
providers, the variety of insurance
benefit structures, and concerns related
to the public disclosure of rates
negotiated between providers and third
party payers. The GAO report goes on to
explore various price transparency
initiatives, including tools that
consumers could use to generate price
estimates in advance of receiving a
healthcare service. The report notes that
pricing information displayed by tools
varies across initiatives, in large part
due to limits reported by the initiatives
in their access or authority to collect
certain necessary price data. According
to the GAO report, transparency
initiatives with access to and integrated
pricing data from both providers and
insurers were best able to provide
reasonable estimates of consumers’
complete costs.
The concept of making healthcare
provider charges and insurance benefit
information available to consumers is
not new; some States have required
disclosure of pricing information by
providers and payers for a number of
years. More than half of the States have
passed legislation establishing price
transparency websites or mandating that
health plans, hospitals, or physicians
make price information available to
consumers.15 As of early 2012, there
were 62 consumer-oriented, State-based
healthcare price comparison websites.16
Half of these websites were launched
after 2006, and most were developed
and funded by a State government
agency (46.8 percent) or hospital
14 GAO. Health Care Price Transparency:
Meaningful Price Information Is Difficult for
Consumers to Obtain Prior to Receiving Care.
Publicly released October 24, 2011. Available at:
https://www.gao.gov/products/GAO-11-791.
15 Desai S, et al. Association Between Availability
of a Price Transparency Tool and Outpatient
Spending. JAMA. 2016;315(17):1874–1881.
Available at: https://jamanetwork.com/journals/
jama/fullarticle/2518264.
16 Kullgren JT, et al. A census of state health care
price transparency websites. JAMA.
2013;309(23):2437–2438. Available at: https://
jamanetwork.com/journals/jama/fullarticle/
1697957.
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association (38.7 percent).17 Most
websites report prices of inpatient care
for medical conditions (72.6 percent) or
surgeries (71.0 percent). Information
about prices of outpatient services such
as diagnostic or screening procedures
(37.1 percent), radiology studies (22.6
percent), prescription drugs (14.5
percent), or laboratory tests (9.7 percent)
are reported less often.18
Since the early 2000s, Californialicensed hospitals have been required to
annually submit to the State, for public
posting on a State website: The charge
description master (CDM, also known as
a ‘‘chargemaster’’); a list of the hospital’s
average charges for at least 25 common
outpatient procedures, including
ancillary services; and the estimated
percentage increase in gross revenue
due to price changes.19 The information
is required to be submitted in plain
language using easily understood
terminology.20 In 2012, Massachusetts
began requiring insurers to provide,
upon request, the estimated amount
insured patients will be responsible to
pay for proposed admissions,
procedures, or services based upon the
information available to the insurer at
the time, and also began requiring
providers to disclose the charge for the
admission, procedure, or service upon
request by the patient within 2 working
days.21 Since 2015, Oregon has offered
pricing data for the top 100 common
hospital outpatient procedures and top
50 common inpatient procedures on its
OregonHospitalGuide.org website,
which displays the median negotiated
amount of the procedure by hospital
and includes patient paid amounts such
as deductibles and copayments. The
data are derived from State-mandated
annual hospital claims collection by the
State’s all payer claims database (APCD)
and represent the service package cost
for each of the procedures, including
ancillary services and elements related
to the procedure, with the exception of
professional fees which are billed
separately.22 More recently, in 2018,
Colorado began requiring hospitals to
post the prices of the 50 most used DRG
codes and the 25 most used outpatient
CPT codes or healthcare services
17 Ibid.
18 Ibid.
19 Available at: https://oshpd.ca.gov/data-andreports/cost-transparency/hospital-chargemasters/
2018-chargemasters/.
20 Jenkins K. CMS Price Transparency Push Trails
State Initiatives. The National Law Review.
February 8, 2019. Available at: https://
www.natlawreview.com/article/cms-pricetransparency-push-trails-state-initiatives.
21 Ibid.
22 Available at: https://oregonhospitalguide.org/
and https://oregonhospitalguide.org/understandingthe-data/procedure-costs.html.
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procedure codes with a ‘‘plain-English
description’’ of the service, which must
be updated at least annually.23
Not only have States taken an interest
in price transparency, but insurers and
self-funded employers have also moved
in this direction. For example, some
self-funded employers are using price
transparency tools to incentivize their
employees to make cost-conscious
decisions when purchasing healthcare
services. Most large insurers have
embedded cost estimation tools into
their member websites, and some
provide their members with
comparative cost and value information,
which includes rates that the insurers
have negotiated with in-network
providers and suppliers.
Research suggests that making such
consumer-friendly pricing information
available to the public can reduce
healthcare costs for consumers.
Specifically, recent research evaluating
the impact of New Hampshire’s price
transparency efforts reveals that
providing insured patients with
information about prices can have an
impact on the out-of-pocket costs
consumers pay for medical imaging
procedures, not only by helping users of
New Hampshire’s website choose lowercost options, but also by leading to
lower prices that benefited all patients,
including those in the State that did not
use the website.24 25
Despite the growing consumer
demand and awareness of the need for
healthcare pricing data, there continues
to be a gap in easily accessible pricing
information for consumers to use for
healthcare shopping purposes.
Specifically, there is inconsistent (and
many times nonexistent) availability of
provider charge information, among
other limitations to understanding data
made available or barriers to use of the
data. We believe this information gap
can, in part, be filled by the new
requirements we are finalizing in this
final rule, under section 2718(e) of the
PHS Act, as described below. As we
explained in the CY 2020 OPPS/ASC
proposed rule, we believe that ensuring
public access to hospital standard
23 Jenkins K. CMS Price Transparency Push Trails
State Initiatives. The National Law Review.
February 8, 2019. Available at: https://
www.natlawreview.com/article/cms-pricetransparency-push-trails-state-initiatives.
24 Brown ZY. What would happen if hospitals
openly shared their prices? The Conversation.
January 30, 2019. Available at: https://
theconversation.com/what-would-happen-ifhospitals-openly-shared-their-prices-110352.
25 Brown ZY. An Empirical Model of Price
Transparency and Markups in Health Care. August
2019. Available at: https://www-personal.umich.edu/
∼zachb/zbrown_empirical_model_price_
transparency.pdf.
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charge data will promote and support
current and future price transparency
efforts. We believe that this, in turn, will
enable healthcare consumers to make
more informed decisions, increase
market competition, and ultimately
drive down the cost of healthcare
services, making them more affordable
for all patients.
2. Summary of Proposals and General
Comments
In the CY 2020 OPPS/ASC proposed
rule (84 FR 39398), we indicated that
health care consumers continue to lack
the meaningful pricing information they
need to choose the healthcare services
they want and need despite our prior
requirements for hospitals to publicly
post their chargemaster rates online.
Based on feedback from hospitals and
consumers following the January 1,
2019 implementation of the revised
guidelines, and in accordance with
President’s Executive Order on
‘‘Improving Price and Quality
Transparency in American Healthcare to
Put Patients First’’ (June 24, 2019), we
proposed an expansion of hospital
charge display requirements to include
charges and information based on
negotiated rates and for common
shoppable items and services, in a
manner that is consumer-friendly. We
also proposed to establish a mechanism
for monitoring and the application of
penalties for noncompliance.
Specifically, we proposed to add a
new Part 180—Hospital Price
Transparency to title 45 CFR which
would contain our regulations on price
transparency for purposes of section
2718(e) of the PHS Act. We made
proposals related to: (1) A definition of
‘‘hospital’’; (2) different reporting
requirements that would apply to
certain hospitals; (3) definitions for two
types of ‘‘standard charges’’
(specifically, gross charges and payerspecific negotiated charges) that
hospitals would be required to make
public, and a request for public
comment on other types of standard
charges that hospitals should be
required to make public; (4) a definition
of hospital ‘‘items and services’’ that
would include all items and services
(both individual and packaged)
provided by the hospital to a patient in
connection with an inpatient admission
or an outpatient department visit; (5)
requirements for making public a
machine-readable file that contains a
hospital’s gross charges and payerspecific negotiated charges for all items
and services provided by the hospital;
(6) requirements for making public
payer-specific negotiated charges for
select hospital-provided items and
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services that are ‘‘shoppable’’ and that
are displayed and packaged in a
consumer-friendly manner; (7)
monitoring for hospital noncompliance
with requirements for publicly
disclosing standard charges; (8) actions
that would address hospital
noncompliance, which include issuing a
written warning notice, requesting a
CAP, and imposing CMPs on
noncompliant hospitals and publicizing
these penalties on a CMS website; and
(9) appeals of CMPs.
Comment: Commenters included
individual consumers, patient
advocates, hospitals and health systems,
private insurers, employers, medical
associations, health benefits
consultants, health information
technology (IT) organizations and
organizations with price transparency
expertise, and academic institutions,
among others. The majority of
commenters expressed broad support
for our proposed policies (in whole or
in part) or agreed with the objectives we
seek to accomplish through these
requirements. Many of these
commenters stated that the disclosure of
hospital standard charges would serve
to increase competition, drive down
healthcare prices, and allow consumers
to compare healthcare costs across
facilities and to have better control over
their budgets and the financing of their
healthcare needs.
Many commenters shared personal
stories and examples of their
experiences, illustrating their desire to
shop and learn healthcare service prices
in advance, and expressed frustration at
their current inability to prospectively
access medical costs. Commenters also
provided specific examples of the ways
that knowledge of healthcare pricing in
advance would benefit consumers and
empower them to make lower cost
choices. Many commenters stated that
consumers have a ‘‘right to know’’ or
‘‘right to understand’’ healthcare costs
in advance of receiving treatment.
Individual consumers that submitted
comments generally praised the
proposals. One commenter stated it is
the ‘‘best attempt [thus] far to provide
price transparency to the American
public.’’ But other commenters who
supported hospital disclosure of charge
information as a necessary first step also
recognized that such disclosure would
still fall, as one commenter stated, ‘‘far
short of the full price and cost
transparency we need in every part of
our healthcare system.’’
By contrast, many organizations,
including those representing hospitals
and insurers, that submitted comments
expressed strong concerns with the
proposals and generally questioned
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whether hospital charge disclosures
would effectively reduce healthcare
costs. Many of these entities commented
on the practicalities and usefulness of
displaying hospital standard charges
and asserted that the proposal would
not ‘‘directly’’ and ‘‘materially’’ serve
the stated interest of improving
consumer access to healthcare pricing
information to help drive down
healthcare costs.
Commenters that objected to the
proposals also pointed out that
disclosure of hospital charges would be
insufficient to permit a consumer to
obtain an out-of-pocket estimate in
advance because consumers with
insurance need additional information
from payers. Some commenters
generally indicated that the proposed
disclosures would be of little benefit or
use to consumers. Further, several
commenters suggested that, for patients
with health insurance, insurers, not
hospitals, should be the primary source
of price information, and that insurers
should inform and educate their
members on potential out-of-pocket
costs in advance of elective services.
Some expressed concerns that patients
could be confused by hospital charge
information and misinterpret the
standard charge data the hospital is
required to display.
Response: We thank the many
commenters for their support of CMS’
price transparency initiative in general,
and our proposals to require hospitals to
make public their standard charge
information in particular, which, for
reasons articulated in the CY 2020
OPPS/ASC proposed rule, we agree can
improve consumer knowledge of the
price of healthcare items and services in
advance. For example, disclosure of
payer-specific negotiated charges can
help individuals with high deductible
health plans (HDHPs) or those with coinsurance determine the portion of the
negotiated charge for which they will be
responsible for out-of-pocket. We
believe that regulations we are finalizing
in this final rule, implementing section
2718(e) of the PHS Act, requiring
hospitals make public standard charges,
are imperative for several reasons,
including that consumers currently do
not have the information they need in
a readily usable way or in context to
inform their healthcare decisionmaking. Further, we believe that greater
transparency will increase competition
throughout the market and address
healthcare costs. For instance,
disclosure of pricing information will
allow providers, hospitals, insurers,
employers and patients to begin to
engage each other and better utilize
market forces to address the high cost of
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medical care in a more widespread
fashion.
While we understand the
commenters’ concerns that disclosure of
hospital standard charges may not be
used by all consumers, we disagree that
the availability of such data would be of
little benefit to consumers generally. We
continue to believe there is a direct
connection between transparency in
hospital standard charge information
and having more affordable healthcare
and lower healthcare coverage costs. We
believe healthcare markets could work
more efficiently and provide consumers
with higher-value healthcare if we
promote policies that encourage choice
and competition. As we noted in the CY
2020 OPPS/ASC proposed rule, and
restated in section II.A.2 of this final
rule, numerous studies suggest that
consumers want greater transparency
and price information so that they can
make more informed decisions about
where to seek care based on price (84 FR
39572).
We do, however, agree with
commenters who indicated that
disclosure of hospital charge
information alone may be insufficient or
does not go far enough for consumers to
know their out-of-pocket costs in
advance of receiving a healthcare
service. As we indicated in the CY 2020
OPPS/ASC proposed rule (84 FR 39574),
there are many barriers to obtaining an
out-of-pocket estimate in advance and to
make price comparisons for healthcare
services, including that the data
necessary for such an analysis are not
available to the general public for
personal use. Necessary data to make
out-of-pocket price comparisons
depends on an individual’s
circumstances. For example, a self-pay
individual may simply want to know
the amount a healthcare provider will
accept in cash (or cash equivalent) as
payment in full, while an individual
with health insurance may want to
know the charge negotiated between the
healthcare provider and payer, along
with additional individual benefitspecific information such as the amount
of cost-sharing, the network status of the
healthcare provider, how much of a
deductible has been paid to date, and
other information. We therefore agree
with commenters who recognize that
these policies to require hospitals to
make public their standard charges are
merely a necessary first step. We discuss
the importance and necessity of specific
types of hospital standard charges in
section II.D of this final rule.
In response to commenters suggesting
that insurers should be the primary
source of price information, we disagree
that insurers alone should bear the
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complete burden or responsibility for
price transparency. At least one key
reason that insurers cannot alone bear
the burden is that, in numerous
instances, they are not participants in
the transaction; for example, as
discussed in section II.D of this final
rule, self-pay patients and insured
patients who are considering paying in
cash have an interest in understanding
hospitals’ cash prices, or for employers
who want to contract directly with
hospitals. We also note that the
proposed rule entitled Transparency in
Coverage (file code CMS–9915–P)
would place complementary
transparency requirements on most
individual and group market health
insurance issuers and group health
plans.
Comment: A few commenters asked
CMS not to move forward with the final
rule, stating that price transparency
should be done only at the state level.
These commenters expressed concern
that CMS moving forward in this area
would either limit price transparency to
a ‘‘one size fits all’’ approach or
complicate or undercut efforts already
ongoing in several states. These
commenters suggested that instead of
federal mandates, CMS could work with
hospitals to provide meaningful
information to patients about their outof-pocket costs for their hospital care by
improving financial counseling, or
provide grant dollars for states to
improve their own price transparency
programs.
More generally, many commenters
asserted that several hospitals already
respond to consumer requests for
actionable healthcare pricing
information in advance of receiving
care, such as through existing tools,
publicizing how and from whom
patients can obtain price estimates,
providing individualized financial
counseling, or a combination of these
methods.
Response: We believe it is appropriate
to promulgate regulations pursuant to
section 2718(e) of the PHS Act.
We further believe that transparency
in pricing is a national issue, which
Congress has recognized by enacting
hospital price transparency statutory
requirements.
We appreciate the commenters’
concerns about the possible interactions
between new federal requirements for
hospitals to make public standard
charges and existing State price
transparency initiatives, or hospital
initiatives. As we discussed in the CY
2020 OPPS/ASC proposed rule, we have
sought ways to ensure sufficient
flexibility in the new requirements,
particularly around the form and
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manner of making public hospital price
information, as well as the frequency of
making public this information. As with
the proposed requirements, we continue
to believe that the requirements we are
finalizing in this final rule will align
with and enhance ongoing State and
hospital efforts for the display of
hospital charge information. We note
that while many States have made
progress in promoting price
transparency, most State efforts
continue to fall short. For example, a
group that tracks State progress found in
their most recent report that all but
seven States scored an ‘‘F’’ on price
transparency.26 States that excel at
promoting price transparency (for
example, New Hampshire and Maine,
the only two States to receive an ‘‘A’’
rating) are also States where the price of
shoppable services has reportedly
decreased 27 or fostered a more
competitive market.28 We believe these
final rules will provide a national
framework upon which States can either
begin or continue to build.
We commend those hospitals that are
already publicly releasing their standard
charges and providing patients
individualized assistance to help them
understand their projected costs in
advance of receiving care. However, not
all hospitals are prioritizing providing
such assistance. Moreover, we do not
believe that such existing hospital
initiatives diminish the need to, and
benefits of, establishing consistent,
nationwide requirements for hospitals
to make public standard charges. We
encourage efforts to provide consumers
with additional price information
(beyond the requirements established in
this final rule) and for hospitals to
continue to educate and provide
prospective out-of-pocket information to
patients. By doing so, hospitals can help
consumers gain an understanding of
hospital standard charge information
and thereby support consumers in
making cost conscious decisions
regarding their care in advance.
Comment: Some commenters
generally indicated that the proposals
26 de Brantes F, et al. Price Transparency &
Physician Quality Report Card 2017. Catalyst for
Payment Reform. Available at: https://
www.catalyze.org/wp-content/uploads/2017/11/
Price-Transparency-and-Physician-Quality-ReportCard-2017_0-1.pdf.
27 Brown ZY. Equilibrium Effects of Health Care
Price Information. The Review of Economics and
Statistics. Published October 2019; 101:4, 699–712.
Available at: https://www-personal.umich.edu/
∼zachb/zbrown_eqm_effects_price_
transparency.pdf.
28 Gudiksen KL, et al. The Secret of Health Care
Prices: Why Transparency Is in the Public Interest.
California Health Care Foundation. July 2019.
Available at: https://www.chcf.org/wp-content/
uploads/2019/06/SecretHealthCarePrices.pdf.
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for hospitals to disclose their standard
charges would be very burdensome to
implement. Several commenters also
suggested that the proposed price
transparency requirements are contrary
to the Patients over Paperwork
initiative, which is a CMS initiative that
aims to remove regulatory obstacles that
get in the way of providers spending
time with patients.
Response: The Patients over
Paperwork initiative is in accord with
President Trump’s Executive Order that
directs federal agencies to ‘‘cut the red
tape’’ to reduce burdensome regulations.
Through ‘‘Patients over Paperwork,’’
CMS established an internal process to
evaluate and streamline regulations
with a goal to reduce unnecessary
burden, to increase efficiencies, and to
improve the beneficiary experience.29
Generally, we believe the final
requirements will increase transparency
in hospital charge information and will
achieve one of our primary goals of
putting patients first and empowering
them to make the best decisions for
themselves and their families.30
Efficiencies could also be gained
through implementation of these
requirements for markets, providers and
patients.31 32 33 To implement section
2718(e) of the PHS Act and to achieve
these goals, some burden on hospitals is
necessary. However, we have sought
through rulemaking to minimize the
burden wherever possible.
We acknowledge commenters’
concerns related to burden. However,
we believe that the burdens placed on
hospitals to make public their standard
charge data is outweighed by the benefit
that the availability of these data will
have in informing patients regarding
healthcare costs and choices and
improving overall market competition.
Since we believe that transparency is
necessary to improve healthcare value
29 CMS.gov website, Patients Over Paperwork, at
https://www.cms.gov/Outreach-and-Education/
Outreach/Partnerships/
PatientsOverPaperwork.html.
30 CMS.gov, Patients Over Paperwork webpage,
available at https://www.cms.gov/About-CMS/storypage/patients-over-paperwork.html; see also 84 FR
27021 (RFI describing CMS’ top priority as putting
patients first and empowering them to make the
best decisions for themselves and their families).
31 Kim M. The Effect of Hospital Price
Transparency in Health Care Markets. 2011.
Available at: https://repository.upenn.edu/
dissertations/AAI3475926/.
32 CRS Report to Congress: Does Price
Transparency Improve Market Efficiency?
Implications of Empirical Evidence in Other
Markets for the Health Sector. July 24, 2007.
Available at: https://fas.org/sgp/crs/secrecy/
RL34101.pdf.
33 Santa J. The Healthcare Imperative: Lowering
Costs and Improving Outcomes: Workshop Series
Summary. 2010. Available at: https://
www.ncbi.nlm.nih.gov/books/NBK53921/.
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and empower patients, we believe the
need justifies the additional burden.
While the burdens hospitals may incur
to implement these requirements might
be administrative in nature, we believe
that the benefits to consumers, and to
the public as a whole, justify this
regulatory action and that we are
thereby prioritizing patients through
this regulatory action.
Comment: A few commenters offered
suggestions for how to improve hospital
price transparency in general, including
the following:
• Presenting pricing data with
quality, health outcomes, and other
relevant data.
• Encouraging shared decisionmaking and cost of care conversations
between patients and clinicians at the
point of care.
• Addressing unexpected costs of
care and providing consumer
protections from unexpected and
unnecessary out-of-pocket spending,
such as those resulting from incidents
where the patient is billed at rates that
are inconsistent with publicly posted
prices for their payer (referred to by a
few commenters as ‘‘price surprise’’), or
billed by out-of-network providers that
provided treatment at an in-network
facility, or the practice where the
provider bills the patient for the balance
between the amount the patient’s health
insurance plan covers and the amount
that the provider charges (‘‘balance
billing’’).
Response: We acknowledge that
additional barriers have to be overcome
to allow consumers to identify
appropriate sites of care for needed
healthcare services, determine out-ofpocket costs in advance, and utilize
indicators of quality of care to make
value-based decisions. As we have
previously described, we believe the
policies we are finalizing in this final
rule requiring hospitals to make public
standard charges are a necessary and
important first step in ensuring
transparency in healthcare prices for
consumers, but that the release of
hospital standard charge information is
not sufficient by itself to achieve our
ultimate goals for price transparency.
We also note that our final policies do
not preclude hospitals from undertaking
additional transparency efforts beyond
making public their standard charges.
HHS continues to explore other
authorities to further advance the
Administration’s goal of enhancing
consumers’ ability to choose the
healthcare that is best for them, to make
fully informed decisions about their
healthcare, and to access both useful
price and quality information and
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provide incentives to find low-cost,
high-quality care.
We agree that cost-of-care
conversations at the point of care are
important. National surveys show that a
majority of patients and physicians
want to have these conversations, but
often the information necessary for
actionable conversations is
unavailable.34 A recent supplemental
issue of the Annals of Internal
Medicine 35 highlighted this issue and
identified best practices for integrating
cost-of-care conversations at the point of
care. We believe that disclosure of
hospital standard charges along with the
disclosure of payer information is the
first step to ensuring patients and
practitioners have actionable data to
support meaningful cost-of-care
conversations. We encourage these
conversations and the disclosure of
additional relevant information to
support patient decisions about their
care.
We also agree that ‘‘surprise billing’’
is an issue of great concern to
consumers and of great interest to both
federal and state lawmakers. The
policies finalized in this final rule will
not resolve that issue entirely, although
it is possible that disclosure of hospital
standard charges could help mitigate
some surprise billing experienced by
consumers.
Comment: One commenter suggested
that Medicare and Medicaid
beneficiaries need an easy way to report
fraud and balance billings by providers.
Response: There already exist
multiple avenues by which anyone
suspecting healthcare fraud, waste, or
abuse in Medicare and/or Medicaid may
readily report it to oversight authorities.
For example, the HHS Office of
Inspector General (OIG) Hotline accepts
tips and complaints from all sources
about potential fraud, waste, abuse, and
mismanagement in HHS’ programs (see
https://oig.hhs.gov/FRAUD/REPORTFRAUD/INDEX.ASP for instructions).
Additionally, anyone wishing to report
instances of potential Medicare fraud
may contact Medicare’s toll-free
customer service operations at 1–800–
MEDICARE (1–800–633–4227), and
obtain additional information at
www.medicare.gov/fraud. Anyone
suspecting Medicaid fraud, waste, or
abuse is encouraged to report it to the
Program Integrity contact of the
34 University
of Utah Health website, Let’s Talk
About Money, https://uofuhealth.utah.edu/value/
lets-talk-about-money.php.
35 Fostering Productive Health Care Cost
Conversations: Sharing Lessons Learned and Best
Practices. May 2019 Vol: 170, Issue 9_Supplement.
Annals of Internal Medicine. Available at: https://
annals.org/aim/issue/937992.
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respective State Medicaid Agency (see
https://www.medicaid.gov/about-us/
contact-us/contact-state-page.html for
the 50 United States, the District of
Columbia, the US Virgin Islands, and
Puerto Rico).
B. Definition of ‘‘Hospital’’ and
Hospitals Regarded as Having Met
Requirements
1. Definition of ‘‘Hospital’’
Section 2718(e) of the PHS Act does
not define ‘‘hospital.’’ Initially, we
considered proposing to adopt a
definition of ‘‘hospital’’ that is used
either in other sections of the PHS Act
or in the SSA, but we found that no
single or combined definition was
suitable because those other definitions
were applicable to specific programs or
Medicare participation and therefore
had program-specific requirements that
made them too narrow for our purposes.
For example, we considered referencing
the definition of ‘‘hospital’’ at section
1861(e) of the SSA because that
definition is well understood by
institutions that participate as hospitals
for purposes of Medicare. However, we
were concerned that doing so could
have had the unintentional effect of
limiting the institutions we believe
should be covered by section 2718(e) of
the PHS Act. Even so, we believe that
the licensing requirement described at
section 1861(e)(7) of the SSA captures
the institutions that we believe should
be characterized as hospitals for
purposes of this section.
Accordingly, we proposed to define a
‘‘hospital’’ as an institution in any State
in which State or applicable local law
provides for the licensing of hospitals
and that is: (1) Licensed as a hospital
pursuant to such law; or (2) approved,
by the agency of such State or locality
responsible for licensing hospitals, as
meeting the standards established for
such licensing (which we proposed to
codify in new 45 CFR 180.20).
We believe this proposed definition is
the best way to ensure that section
2718(e) of the PHS Act applies to each
hospital operating within the United
States. First, in addition to applying to
all Medicare-enrolled hospitals (that, by
definition, must be licensed by a State
as a hospital, or otherwise approved by
the State or local licensing agency as
meeting hospital licensing standards),
the proposed definition would also
capture any institutions that are, in fact,
operating as hospitals under State or
local law, but might not be considered
hospitals for purposes of Medicare
participation. As discussed in section
XVI.A.2. of the CY 2020 OPPS/ASC
proposed rule (84 FR 39572 through
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39573), many States have promoted
price transparency initiatives, and some
require institutions they license as
hospitals to make certain charges public
as a part of those initiatives. Therefore,
defining a hospital by its licensure (or
by its approval by the State or locality
as meeting licensing standards) may
carry the advantage of aligning the
application of Federal and State price
transparency initiatives to the same
institutions.
We also proposed that, for purposes of
the definition of ‘‘hospital,’’ a State
includes each of the several States, the
District of Columbia, Puerto Rico, the
Virgin Islands, Guam, American Samoa,
and the Northern Mariana Islands. We
stated that this proposed definition of
State would be consistent with how that
term is defined under section
2791(d)(14) of the PHS Act. We further
stated that we believed that adopting
this definition of ‘‘State’’ for purposes of
section 2718(e) of the PHS Act is
appropriate because, unlike the other
provisions in section 2718 which apply
to health insurance issuers, section
2718(e) applies to hospitals. Therefore,
it is distinguishable from the approach
outlined in the July 2014 letters 36 to the
Territories regarding the PHS Act health
insurance requirements established or
amended by Public Law 111–148 and
Public Law 111–152.
Our proposed definition focused on
whether or not the institution is
licensed by the State or under
applicable local law as a hospital, or is
approved, by the agency of such State or
locality responsible for licensing
hospitals, as meeting the standards
established for such licensing. As such,
a ‘‘hospital’’ under our proposed
definition includes each institution that
satisfies the definition, regardless of
whether that institution is enrolled in
Medicare or, if enrolled, regardless of
how Medicare designates the institution
for its purposes. Thus, we noted that the
proposed definition includes critical
access hospitals (CAHs), inpatient
psychiatric facilities (IPFs), sole
community hospitals (SCHs), and
inpatient rehabilitation facilities (IRFs),
which we previously identified in our
guidelines as being hospitals for the
purposes of section 2718(e) of the PHS
Act,37 as well as any other type of
institution, so long as it is licensed as
36 The July 2014 letters are available at: https://
www.cms.gov/CCIIO/Resources/Letters/
index.html#Health%20Market%20Reforms.
37 Available at: https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/ProspMedicare
FeeSvcPmtGen/Downloads/Additional-FrequentlyAsked-Questions-Regarding-Requirements-forHospitals-To-Make-Public-a-List-of-Their-StandardCharges-via-the-internet.pdf.
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a hospital (or otherwise approved) as
meeting hospital licensing standards.
Finally, we noted that the proposed
definition of ‘‘hospital’’ did not include
entities such as ambulatory surgical
centers (ASCs) or other non-hospital
sites-of-care from which consumers may
seek healthcare items and services. We
discussed that, for example, nonhospital sites may offer ambulatory
surgical services, laboratory or imaging
services, or other services that are
similar or identical to the services
offered by hospital outpatient
departments. In the interest of
increasing opportunities for healthcare
consumers to compare prices for similar
services and promoting widespread
transparency in healthcare prices, we
encouraged non-hospital sites-of-care to
make public their lists of standard
charges in alignment with the proposed
requirements so that consumers could
make effective pricing comparisons.
We invited public comments on our
proposed definition of ‘‘hospital,’’
which we proposed to codify at 45 CFR
180.20.
Comment: A few commenters
requested that CMS finalize the
definition of hospital as proposed and
applauded the agency’s effort to provide
a standard definition of hospital for the
purposes of making standard charges
public. One commenter agreed that the
definition of hospital should not be
limited to only those hospitals that
participate in Medicare.
Several commenters suggested that
the proposed definition of hospital is
too limited, and suggested that CMS
expand the definition to include other
providers, such as physicians, ASCs,
clinics, community health centers, and
skilled nursing facilities, in order to
better educate consumers on prices for
services furnished by all provider types.
A few commenters generally suggested
that CMS extend price transparency
policies to all service providers and all
places of service, not just hospitals or
hospital settings. One commenter
suggested that CMS expand the
definition of hospital to include any
facility that conducts surgery with
anesthesia.
In particular, a few commenters
explained the need for ASCs to be
transparent with their prices. One
commenter noted that federally
mandated payment and other policies
continue to emphasize patients
obtaining care in an outpatient setting
instead of an inpatient acute care
hospital and therefore the definition of
hospital should reflect the greater role
ASCs are taking in the healthcare
system. Commenters also noted that
ASCs provide similar services to
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hospitals and may therefore compete
with hospitals. On the other hand, one
commenter urged CMS to apply price
transparency standards to ASCs to
minimize incentives for hospitals to
defer surgeries to new ASCs formed for
the purpose of circumventing disclosure
of the hospital’s charges.
Commenters took diverging positions
on whether IRFs should be required to
make public standard charges. A few
commenters urged that IRFs be included
among the entities required to make
public standard charges. On the other
hand, as described and addressed in
Section II.B.2 of this final rule, a few
commenters suggested that IRFs be
exempt from the reporting requirements.
Response: We thank the commenters
that supported our proposed definition
of hospital. We believe that our
proposed definition of hospital, which
we are finalizing, is a broad definition
that will encompass all institutions
recognized by a State as a hospital.
Because section 2718(e) of the PHS Act
applies to each hospital operating
within the United States, we do not
believe we have the authority to apply
the price transparency requirements to
non-hospital sites of care. For this
reason, we decline to adopt
commenters’ suggestions that we
expand the definition of hospital to
include all service providers and places
of service, including to all places of
service that provide surgical services
requiring anesthesia. We also decline
the commenters’ suggestions to narrow
the scope of the definition of hospital,
for instance to exclude IRFs where the
IRFs otherwise meet the definition of
hospital we are finalizing. We believe
such an approach would not be
consistent with section 2718(e) of the
Act, which applies to each hospital
operating in the United States. Given
the importance of making public
standard charge data to inform
consumer healthcare decision-making,
we believe it is important to not overly
constrict the definition of hospital,
which might permit subsets of hospitals
that meet the definition we are
finalizing to avoid public disclosure of
their standard charges.
We defer to States’ or localities’
hospital licensing standards for the
determination of whether an entity falls
within the definition of hospital for the
purposes of new 45 CFR part 180. Any
facility licensed by a State or locality as
a hospital, or that is approved by the
agency of such State or locality
responsible for licensing hospitals, as
meeting the standards established for
such licensing, would be considered a
‘‘hospital’’ for the purposes of section
2718(e) of the Act and therefore
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required to comply with the
requirements to make public their
standard charges in the form and
manner required by this final rule. For
this reason, we cannot provide an
exhaustive list of institution types
encompassed within State or locality
hospital licensing laws.
Regarding specific types of entities,
however, we note that healthcare
providers such as ASCs, physicians, or
community health centers would not
likely satisfy our specified definition of
‘‘hospital’’ since they are not likely to be
licensed by a State or locality as a
hospital or to be approved by the agency
of such State or locality responsible for
licensing hospitals as meeting the
standards established for such licensing.
We recognize that ASCs provide many
of the same services as hospitals and
note that many ASCs already engage in
price transparency efforts of their own.
We have no knowledge that existing
price transparency initiatives (those in
states that already require hospitals to
make public standard charges and our
existing guidance that hospitals make
public standard charges pursuant to
section 2718(e) of the PHS Act) have
engendered any shifts in business
between hospitals and ASCs. However,
we believe it is reasonable to assume
that shifts to the most appropriate care
setting may occur as referring providers
and their patients seek out the highest
value setting for their care.
Comment: A few commenters
requested clarification on how the
requirements to make standard charges
public and CMS compliance actions
would apply to hospital outpatient
services that are provided off-campus,
or in hospital-affiliated or hospitalowned clinics. One commenter asked
whether all hospital locations under one
CMS Certification Number (CCN) are a
single hospital for the purpose of the
proposal or whether they are considered
separate locations. The commenter
expressed concern that there is an
absence of any connection between the
CY 2020 OPPS/ASC proposed rule’s
definition of ‘‘hospital’’ and the CCN.
The commenter expressed concern that
this lack of clarity would hinder
compliance with the proposal if
finalized and lessen the impact of the
proposed penalty.
Response: We did not propose to
define the term ‘‘hospital’’ with
reference to the CCN, which is the
hospital identification system we use for
purposes of Medicare and Medicaid. As
we discussed in the CY 2020 OPPS/ASC
proposed rule, we declined to base the
definition of hospital on Medicare
participation, as the statute states all
hospitals operating within the United
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States must make available a list of their
standard charges.
As discussed in section II.E.6 of this
final rule, each hospital location
operating under a single hospital license
(or approval) that has a different set of
standard charges than the other
location(s) operating under the same
hospital license (or approval) must
separately make public the standard
charges applicable to that location, as
stated in 45 CFR 180.50. All hospital
location(s) operating under the same
hospital license (or approval), such as a
hospital’s outpatient department located
at an off-campus location (from the
main hospital location) operating under
the hospital’s license, are subject to the
requirements in this rule.
Final Action: We are finalizing our
proposal to define ‘‘hospital’’ to mean
an institution in any State in which
State or applicable local law provides
for the licensing of hospitals, that is
licensed as a hospital pursuant to such
law, or is approved, by the agency of
such State or locality responsible for
licensing hospitals, as meeting the
standards established for such licensing.
For purposes of this definition, a State
includes each of the several States, the
District of Columbia, Puerto Rico, the
Virgin Islands, Guam, American Samoa,
and the Northern Mariana Islands. We
are finalizing our proposal to set forth
the definition of ‘‘hospital’’ in the
regulations at new 45 CFR 180.20.
2. Special Requirements That Apply to
Certain Hospitals
In the CY 2020 OPPS/ASC proposed
rule (84 FR 39575 through 39576), we
proposed that hospital standard charge
disclosure requirements would not
apply to federally-owned or operated
hospitals, including Indian Health
Service (IHS) facilities (including
Tribally-owned and operated facilities),
Veterans Affairs (VA) facilities, and
Department of Defense (DOD) Military
Treatment Facilities (MTFs), because,
with the exception of some emergency
services, these facilities do not provide
services to the general public and the
established payment rates for services
are not subject to negotiation. Instead,
each of these facility types is authorized
to provide services only to patients who
meet specific eligibility criteria. For
example, individuals must meet the
requirements enumerated at 42 CFR
136.22 through 136.23 to be eligible to
receive services from IHS and Tribal
facilities. Similarly, under 38 CFR 17.43
through 17.46, VA hospitals provide
hospital, domiciliary, and nursing home
services to individuals with prior
authorization who are discharged or
retiring members of the Armed Forces
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and, upon authorization, beneficiaries of
the PHS, Office of Workers’
Compensation Programs, and other
Federal agencies (38 CFR 17.43). In
addition, federally-owned or operated
hospitals such as IHS and Tribal
facilities 38 impose no cost-sharing, or,
in the case of VA hospitals 39 and DOD
MTFs,40 little cost-sharing. With respect
to such facilities where there is costsharing, the charges are publicized
through the Federal Register, Federal
websites, or direct communication and
therefore known to the populations
served by such facilities in advance of
receiving healthcare services. Only
emergency services at federally-owned
or operated facilities are available to
non-eligible individuals. Because these
hospitals do not treat the general public,
their rates are not subject to negotiation,
and the cost sharing obligations for
hospital provided services are known to
their patients in advance, we believe it
is appropriate to establish different
requirements that apply to these
hospitals.
Specifically, we proposed to deem
federally owned or operated hospitals
that do not treat the general public
(except for emergency services) and
whose rates are not subject to
negotiation, to be in compliance with
the requirements of section 2718(e) of
the PHS Act because their charges for
hospital provided services are
publicized to their patients (for
example, through the Federal Register)
(proposed new 45 CFR 180.30(b)). We
also requested public comments on
whether exceptions to our proposed
requirements might be warranted for
hospitals (for example, hospitals located
in rural areas, CAHs, or hospitals that
treat special populations) that are not
federally owned or operated, while also
ensuring that charges for the services
provided by such hospitals are available
to the public.
Comment: Commenters diverged as to
whether additional exceptions should
be made for providers that meet the
proposed definition of ‘‘hospital,’’ such
that these providers would not be
required to make standard charges
public. One commenter strongly
recommended that CMS not allow any
exceptions to requirements for entities
that meet the proposed definition of
‘‘hospital.’’
38 Section 1680r(b) of the Indian Health Care
Improvement Act (25 U.S.C. 1680r).
39 VA cost-sharing information available at:
https://www.va.gov/HEALTHBENEFITS/cost/
copays.asp.
40 MTF cost-sharing information available at:
https://tricare.mil/Costs/Compare and https://
comptroller.defense.gov/Portals/45/documents/
rates/fy2019/2019_ia.pdf.
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Other commenters requested that
CMS exempt CAHs, rural hospitals, and
SCHs from part or all requirements to
make standard charges public. The
commenters stated that the
requirements would be challenging for
small facilities and cited several
justifications for this possible
exemption, including that CAHs are
already at a disadvantage when
negotiating rates with third-party
payers; they lack the implementation
resources due to their size and
reimbursement structure; and the
likelihood of their experiencing
operational disruptions as a result of
diverting staff time and other resources
to comply with the proposed
requirements. On the other hand, one
commenter specified that patients
receiving care in CAHs and rural
hospitals deserve to know how much
services cost in advance.
A few commenters argued that LTCHs
and IRFs ought to be excluded or
exempted from the requirement of
having to make public their standard
charges for a variety of reasons,
including: (1) Commenters’ belief that
patients are unable to schedule LTCH
and IRF services in advance; (2) patients
treated in LTCHs and IRFs are there for
follow-up care after a short-term acute
stay in a hospital and the critical nature
of the patients’ condition, and the need
for tailored treatment plans for complex
conditions, would not lend itself to
being shoppable; (3) imposing price
transparency requirements on LTCHs
will not serve the objectives of increased
market competition or quality
improvement since sometimes there is
only one LTCH in a single market and
there are fewer than 400 total LTCHs
nationwide.
One commenter requested that CMS
exempt institutions and hospitals that
are not enrolled in Medicare and which
are not reimbursed under a prospective
payment system.
Response: Our definition of
‘‘hospital’’ is any institution in any State
in which State or applicable local law
provides for the licensing of hospitals,
that is licensed as a hospital pursuant to
such law or is approved, by the agency
of such State or locality responsible for
licensing hospitals, as meeting the
standards established for such licensing.
As we explained in section II.B.1 of this
final rule, we defer to States’ or
localities’ hospital licensing standards
for the determination of whether an
entity falls within the definition of
hospital for the purposes of new 45 CFR
part 180. We continue to believe this
definition provides the best way to
ensure that section 2718(e) of the PHS
Act applies to each hospital operating
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within the United States. It also may
help align the application of these
requirements with State price
transparency initiatives to the same
institutions.
We appreciate the operational,
resource, and other concerns raised by
commenters, however, to the extent that
IRFs, CAHs, LTCHs, rural hospitals, and
SCHs (among others) fall within our
proposed definition of hospital, we
believe this is appropriate because
patients, or their caregivers, should have
the opportunity to know in advance (as
their circumstances permit) standard
charges for these entities’ items and
services, to inform their healthcare
decision-making. We decline to either
exempt such hospitals from making
public standard charges, or deem such
hospitals as having met requirements for
making public their standard charges.
We recognize that some small
hospitals, and rural hospitals, including
CAHs and SCHs may face challenges in
implementing these requirements, but
we do not believe that such challenges
are insurmountable.
We also disagree with the commenters
that suggest that services provided by
LTCHs and IRFs are not shoppable.
Patients, and their caregivers, seeking
long term care or rehabilitation services
may have the opportunity to shop for
these services in advance, and we
believe patients and caregivers should
have access to consumer-friendly charge
information for such facilities. We
believe that such information could be
used by patients or their caregivers to
better inform their decision-making
when a patient transfers from an acute
care facility (that falls within our
definition of ‘‘hospital’’) to a post-acute
care facility (that also falls within our
definition of ‘‘hospital’’).
Further, we believe that patients with
complex conditions, their caregivers, or
both, may have a particular interest in
using price data to inform healthcare
decision-making. We believe that the
data we are requiring hospitals to make
public could inform healthcare
decision-making by patients with
complex conditions, their caregivers, or
both, even though they may require
additional, or specialized treatment.
We do not believe that the absence of
competition for items or services in a
market should excuse hospitals from
making public standard charges that
consumers may need to inform the cost
of their care. We believe transparency in
hospital prices is important to
consumers’ healthcare decision-making,
regardless of the number of facilities in
a particular market or nationwide.
We also decline the commenter’s
suggestion to exempt institutions and
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hospitals from the requirements to make
public standard charges if they are not
enrolled in Medicare. As we explained
in the CY 2020 OPPS/ASC proposed
rule, we believe that such an approach
would unduly limit the applicability of
the policies for hospitals to make public
standard charges under section 2718(e)
of the PHS Act (84 FR 39575).
Final Action: We are finalizing as
proposed to specify at 45 CFR 180.30
provisions on the applicability of the
requirements for making public
standard charges. We are finalizing as
proposed to specify in 45 CFR 180.30(a)
that the requirements to make public
standard charges apply to hospitals as
defined at 45 CFR 180.20.
We received no comments on our
proposal to deem federally owned or
operated hospitals to be in compliance
with the requirements to make public
standard charges. Therefore, we are
finalizing, as proposed, to specify in 45
CFR 180.30(b) that federally owned or
operated hospitals are deemed by CMS
to be in compliance with the
requirements for making public
standard charges, including but not
limited to:
• Federally owned hospital facilities,
including facilities operated by the U.S.
Department of VA and MTF operated by
the U.S. Department of Defense.
• Hospitals operated by an Indian
Health Program as defined in section
4(12) of the Indian Health Care
Improvement Act.
We received no comments on our
proposal that hospital charge
information must be made public
electronically via the internet. We are
finalizing this requirement as proposed
at 45 CFR 180.30(c).
C. Definition of ‘‘Items and Services’’
Provided by Hospitals
Section 2718(e) of the PHS Act
requires that hospitals make public a list
of the hospital’s standard charges for
items and services provided by the
hospital, including for DRGs. We
proposed that, for purposes of section
2718(e) of the PHS Act, ‘‘items and
services’’ provided by the hospital are
all items and services, including
individual items and services and
service packages, that could be provided
by a hospital to a patient in connection
with an inpatient admission or an
outpatient department visit for which
the hospital has established a standard
charge. Examples of these items and
services include, but are not limited to,
supplies, procedures, room and board,
use of the facility and other items
(generally described as facility fees),
services of employed physicians and
non-physician practitioners (generally
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65533
reflected as professional charges), and
any other items or services for which a
hospital has established a charge.
Our proposed definition included
both individual items and services as
well as ‘‘service packages’’ for which a
hospital has established a charge. Every
hospital maintains a file system known
as a chargemaster, which contains all
billable procedure codes performed at
the hospital, along with descriptions of
those codes and the hospitals’ own list
prices. The format and contents of the
chargemaster vary among hospitals, but
the source codes are derived from
common billing code systems (such as
the AMA’s CPT system). Chargemasters
can include tens of thousands of line
items, depending on the type of facility,
and can be maintained in spreadsheet or
database formats.41 For purposes of
section 2718(e) of the PHS Act, we
proposed to define ‘‘chargemaster’’ to
mean the list of all individual items and
services maintained by a hospital for
which the hospital has established a
standard charge (at proposed new 45
CFR 180.20). Each individual item or
service found on the hospital
chargemaster has a corresponding
‘‘gross’’ charge (84 FR 39578 through
39579). Each individual item or service
may also have a corresponding
negotiated discount, because some
hospitals negotiate with third party
payers to establish a flat percent
discounted rate off the gross charge for
each individual item and service listed
on the chargemaster; for example, a
hospital may negotiate a 50 percent
discount off all chargemaster gross rates
with a third party payer.
In contrast to the chargemaster, or socalled ‘‘fee-for-service’’ (FFS) price list,
hospitals also routinely negotiate rates
with third party payers for bundles of
services, or ‘‘service packages,’’ in lieu
of charging for each and every imaging
study, laboratory test, or alcohol swab
found on the chargemaster.42 Such
service packages may have charges
established on, for example, the basis of
a common procedure or patient
characteristic, or may have an
established per diem rate that includes
all individual items and services
furnished during an inpatient stay.
Some hospitals present ‘‘self-pay
package pricing’’ for prompt same-day
payment from healthcare consumers.
41 Tompkins C, et al. The Precarious Pricing
System For Hospital Services. Health Affairs.
January/February 2006; 25(1). Available at: https://
www.healthaffairs.org/doi/10.1377/hlthaff.25.1.45.
42 Nichols LM, and O’Malley AS. Hospital
Payment Systems: Will Payers Like The Future
Better Than The Past? Health Affairs. January/
February 2006; 25(1). Available at: https://
www.healthaffairs.org/doi/10.1377/hlthaff.25.1.81.
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The hospital’s billing and accounting
systems maintain the negotiated charges
for service packages which are
commonly identified in the hospital’s
billing system by recognized industry
standards and codes. For example, a
DRG system may be used to define a
hospital product based on the
characteristics of patients receiving
similar sets of [itemized] services.43
Medicare and some commercial insurers
have adopted DRG classifications as a
method of inpatient hospital payment.
Other codes (for example, payer-specific
codes, CPT or Healthcare Common
Procedure Coding System (HCPCS)
codes) are used by hospitals and payers
to identify service packages based on
procedures.
For purposes of section 2718(e) of the
PHS Act, we proposed to define a
‘‘service package’’ to mean an
aggregation of individual items and
services into a single service with a
single charge (proposed new 45 CFR
180.20). In the CY 2020 OPPS/ASC
proposed rule, we explained our belief
that this was appropriate and consistent
with section 2718(e) of the PHS Act
because we believe the inclusion of
DRGs as an item or service in section
2718(e) recognizes that hospital services
can be provided, and charges billed,
based on the service’s individual
component parts or as a more inclusive
service package. While section 2718(e)
of the PHS Act specifically includes
items and services grouped into DRGs as
an example of the items and services for
which hospitals must list their standard
charges, we explained that our proposed
definition of ‘‘items and services’’
should include not just all DRGs (as
established under 1886(d)(4) of the SSA)
but also all other service packages
provided by the hospital, including, for
example, service packages the hospital
provides in an outpatient setting for
which a hospital may have established
a standard charge. Therefore, our
proposed definition of ‘‘items and
services’’ includes both individual items
and services and service packages.
We also included in our proposed
definition of ‘‘items and services’’
provided by the hospital the services
furnished by physicians and nonphysician practitioners who are
employed by the hospital. We explained
our belief that the services the hospital
provides through its employed
physicians and non-physician
practitioners are items and services
provided by the hospital because such
43 Mistichelli J. Diagnosis Related Groups (DRGs).
Georgetown University. June, 1984. Available at:
https://repository.library.georgetown.edu/handle/
10822/556896.
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clinicians are employed by the hospital
specifically so it can offer such services
to its patients. In addition, the hospital
establishes and negotiates the charges
for the employed physician and nonphysician services and then bills and
retains the payment for the professional
services of employed physicians and
non-physician practitioners. We
therefore proposed to include these
services in our proposed definition of
items and services provided by the
hospital under section 2718(e) of the
PHS Act, and for hospitals to make
public the charges for the services of
their employed physicians and nonphysician practitioners.
We also considered including in our
proposed definition of items and
services the services provided by
physicians and non-physician
practitioners who are not employed by
the hospitals, but who provide services
at a hospital location. For example, a
procedure performed in a hospital
setting may involve anesthesiology
services provided by a non-employed
physician who has established his or
her own charge for the service provided
at a hospital location. These physicians
and non-physician practitioners may
send a bill that is separate from the
hospital bill, or they may elect to
reassign their billing rights to the
hospital that will send a single bill that
includes both hospital charges and
professional service charges. Often,
healthcare consumers are not expecting
an additional charge or are otherwise
surprised when they receive bills from
entities other than the hospital, or when
charges for non-employed physicians
and non-physician practitioners are
higher than expected (for example,
when a non-employed physician is outof-network and the consumer’s third
party payer declines payment for those
services for that reason). We explained
our belief that the provision of such
additional charge information would be
exceptionally valuable to give
consumers a more complete picture of
the total amount they might be charged
in connection with an inpatient
admission or an outpatient department
visit at a hospital location, potentially
helping to address the widely
recognized ‘‘surprise billing’’ issue.
However, because physicians and nonphysician practitioners who are not
employed by the hospital are practicing
independently, establish their own
charges for services, and receive the
payment for their services, we indicated
we did not believe their charges for their
services would fall within the scope of
section 2718(e) of the PHS Act as they
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are not services ‘‘provided by the
hospital.’’
We welcomed comments on these
proposals.
Comment: A few commenters agreed
with the proposed definition of ‘‘items
and services’’ including service
packages. Many commenters, however,
questioned the feasibility of providing
standard charges for service packages, as
they believe that it is neither feasible,
nor technically possible, for a hospital
to report data from its chargemaster as
service packages. A few commenters
also expressed concern that pricing for
service packages as proposed presents a
challenge because service packages are
often unique to each payer, and the
reimbursements negotiated with payers
are not necessarily associated with a
HCPCS code, DRG, National Drug Code
(NDC), or Ambulatory Payment
Classification (APC) as the proposed
regulation anticipates.
A few commenters stated that they
believe CMS needs to provide guidance
or a framework to help hospitals define
outpatient service packages and
attribute ancillary services to specific
primary services. Another commenter
asked if the definition of ‘‘items and
services’’ was flexible enough to allow
for different payment models ranging
from episodic care that has a guarantee
of follow-up care being included if a
complication happens, to care models
that include subscription-based
contracts.
Response: We thank commenters for
their input on the proposal. We are
finalizing the definition of ‘‘items and
services’’ as proposed.
As we explained in the CY 2020
OPPS/ASC proposed rule, some
hospitals routinely negotiate rates with
third party payers for bundles of
services or ‘‘service packages.’’ We agree
with commenters that the standard
charge for a service package is not
typically found on the hospital’s
chargemaster, which simply lists out all
the individual items and services.
Standard charges for service packages
are negotiated between the hospital and
payer and are identified by common
billing codes (for example, DRGs or
APCs) or other payer-specific identifiers
that provide context to the type and
scope of individualized items and
services that may be included in the
package. As explained in more detail in
section II.D.3 of this final rule, the
payer-specific charge the hospital has
negotiated for a service package (also
referred to as the ‘base rate’) can be
found in other parts of the hospital
billing and accounting systems than the
chargemaster, or in rate tables or the rate
sheets found in hospital in-network
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contracts with third party payers
indicating the agreed upon rates for the
provision of various hospital services.
We decline to define outpatient
service packages and attributed
ancillary services because we believe
this would be too prescriptive and each
hospital may provide different
outpatient service packages and
ancillary services. We note, however,
that we provide some additional
guidance for how hospitals should
display of payer-specific negotiated
charges for hospital items and services
(including service packages) and their
ancillary services, as applicable, in
sections II.F of this final rule.
We also note that the definition of
items and services that we are finalizing
gives hospitals flexibility to display
their standard charges for service
packages that are unique to each of their
payer-specific contracts. Thus, a service
package that has been negotiated with a
third party payer to include treatment
for complications or follow up care is
included in our definition of hospital
items and services.
Comment: One commenter sought
clarification on whether CMS is
retaining the requirement in current
CMS guidelines that PPS hospitals post
a list of their standard charges for each
Medicare Severity (MS)–DRG.
Response: We are finalizing policies
that would supersede the current
guidance, and require hospitals to make
public their payer-specific charges for
items and services, including service
packages as identified by DRG, APC, or
other common billing code. CMS
previously issued guidelines specifying
that only hospitals paid under the
Medicare IPPS (referred to as subsection
(d) hospitals) would be required to
establish (and update) and make public
a list of their standard charges for each
DRG established under section
1886(d)(4) of the SSA.44 In retrospect,
we recognize that this guidance
unnecessarily limited the reporting of
DRGs by hospitals according to section
2718(e) of the PHS Act, which specifies
that a hospital make public a list of the
hospital’s standard charges for items
and services provided by the hospital,
including for DRGs established under
section 1886(d)(4) of the SSA. As
indicated in our proposed definition of
‘‘items and services,’’ we interpret the
statute to apply to not just
individualized items and services, but
also to service packages. We believe
44 Available at: https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/ProspMedicare
FeeSvcPmtGen/Downloads/Additional-FrequentlyAsked-Questions-Regarding-Requirements-forHospitals-To-Make-Public-a-List-of-Their-StandardCharges-via-the-internet.pdf.
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such service packages are identified by
common billing codes (for example,
DRG or APCs), not just MS–DRGs. We
are therefore implementing new policies
in these regulations. Additionally, as
discussed in more detail in section
II.D.3, we clarify that the standard
charge associated with the DRG would
be the base rate the hospital has
negotiated with third party payers.
Comment: A few commenters
supported a definition of items and
services that would include services of
employed physicians and non-physician
practitioners (generally reflected as
professional charges). A few
commenters supported a more
expansive definition of items and
services that would require hospitals to
post charges for all practitioners who
affiliate with a hospital. Commenters
who favored this approach typically
stated that CMS should place hospitals
in a position to be fully responsible for
transparency around the entire bill,
citing concerns about surprise billing
where patients received a separate bill
from medical practitioners not
employed by the hospital.
Response: We appreciate commenters
support for the proposed definition of
items and services which would include
services of employed physicians and
non-physician practitioners (generally
reflected as professional charges). We
also appreciate comments encouraging
the adoption of an even broader
definition of items and services that
includes services for physicians and
non-physician practitioners who are
affiliated with the hospital. As stated in
the CY 2020 OPPS/ASC proposed rule,
because physicians and non-physician
practitioners who are not employed by
the hospital are practicing
independently, establish their own
charges for services, and receive the
payment for their services, we do not
believe the charges for their services fall
within the scope of section 2718(e) of
the PHS Act as they are not services
‘‘provided by the hospital.’’ We note
that in section II.F.2 of this final rule,
we require hospitals to display their
standard charges for shoppable services
in a consumer-friendly manner, and we
provided an example template for the
format hospitals could use for this
purpose. In section II.F of this final rule,
we require hospitals to group the
primary shoppable service with the
ancillary services customarily provided
by the hospital. We also strongly
encourage and recommend that
hospitals, for the sake of consumerfriendly presentation, indicate any
additional ancillary services that are not
provided by the hospital but that the
patient is likely to experience as part of
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the primary shoppable service. We
recommend and encourage hospitals to
indicate that such services may be billed
separately by other entities involved in
the patient’s care. We believe such
disclosure may be helpful to enable
consumers to identify when services of
physicians or non-physician
practitioners not employed by the
hospital may be separately charged.
Comment: Several commenters sought
clarification on the term ‘‘employment,’’
noting there are various relationships
and employment arrangements
(including, for example, full time
employment by a hospital, or
independent contractor arrangements).
A few commenters described these
arrangements. For example, one
commenter stated that large academic
medical centers may have faculty who
are housed in a business entity affiliated
with the hospital, but not necessarily
employed by that hospital. The
commenter also stated there may be
instances where independent practices
assign billing rights to the hospitals
entity, but those practitioners are not
considered employed by the hospital. A
few commenters explained that in many
instances, the employment of
physicians and non-physician
practitioners represent complicated
legal organizational structures. Another
commenter explained that it could be
difficult to understand in what
scenarios physicians are employed
based on looking at the billing entity for
professional services.
Response: We appreciate the
commenters’ suggestions identifying
examples of the variation and
complexity in employment models and
possible contracting relationships that
may exists between hospitals and
physicians, or entities employing
physicians. Given such variation and
complexity, we believe it is important to
preserve flexibility for hospitals to
identify employed physicians or nonphysician practitioners under their
organizational structure, and we decline
at this time to codify a definition of
‘‘employment.’’
Comment: Several commenters
disagreed that services provided by
physicians and non-physician
practitioners employed by hospitals
should be included in the definition of
items and services. These commenters
suggested that, under the proposed
approach, hospitals that employ
physicians and non-physician
practitioners would be providing
displaying prices that would not be
comparable with prices of hospitals that
do not employ, and therefore need not
disclose, physician and non-physician
practitioner prices, and expressed
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concern that this would result in
consumer confusion. A few commenters
believed hospitals that employ
physicians and non-physician
practitioners would be at a disadvantage
under the proposed definition of ‘‘items
and services,’’ as their standard charges
would appear higher than hospitals that
do not. One comment suggested that an
unanticipated consequence of requiring
price transparency only for employed
providers could be hospitals moving
capital and services into ‘‘partnerships’’
in order to take advantage of the hidden
pricing that such a partnership would
enable.
Response: We disagree with
commenters who suggest that services
for employed physicians should be
excluded from the definition of items
and services as we believe this
information will be valuable to give
consumers a complete picture of the
total amount they might be charged by
a hospital.
We disagree with comments
suggesting that hospital price
transparency requirements would
disadvantage those hospitals that
employ physicians and non-physician
practitioners as compared to hospitals
that do not. As further discussed in
section II.F. of this final rule, with
respect to the requirement to make
public certain standard charges for
shoppable services in a consumerfriendly format, hospital employed
physicians’ and non-physician
practitioners’ services may be charged
as ancillary services to a primary
shoppable service. Under such
circumstances, hospitals would list such
ancillary services separately from the
primary shoppable service. In Table 2,
in section II.F of this final rule, we
include an example for how hospitals
could format and display their
shoppable services. We also note that
our final policies require that the
standard charges for each shoppable
service (including ancillary services) be
listed separately, not summed (see
section II.F. of this final rule). We
therefore believe consumers, comparing
shoppable services for multiple
hospitals, will be able to distinguish
whether or not the hospital standard
charges include charges for services of
physicians and non-physician
practitioners.
We also do not have sufficient
information to conclude that a
requirement for hospitals to disclose
standard charges for services of
employed physicians and non-physician
practitioners is likely to result in a
systematic change from the practice of
employing physicians and nonphysician practitioners to favoring other
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types of partnerships and employment
arrangements. In developing our
proposals for hospital price
transparency, we drew from similar
requirements of States and we are not
aware that such price transparency
requirements altered the mode by which
hospitals employ physicians and nonphysician practitioners.
Comment: A few commenters
suggested that CMS lacked the legal
basis to establish a definition of hospital
items and services that includes services
of employed physicians and nonphysician practitioners.
Response: Section 2718(e) of the PHS
Act requires hospitals to make public
the hospital’s standard charges for items
and services provided by the hospital,
including for DRGs. The term ‘‘standard
charges for items and services’’ is not
defined in section 2718. We believe the
Secretary has the authority to define
‘‘items and services.’’ Since hospitals
charge patients for the services of their
employed physicians and non-physician
practitioners, we believe it is reasonable
for the Secretary to define items and
services as including their services.
Comment: One commenter expressed
concern with requiring hospitals to
make public standard charges for
services of employed emergency room
physicians, urging a cautious approach
so as to not undermine the patient
protections in place under the
Emergency Medical Treatment and
Labor Act (EMTALA). The commenter
explained that EMTALA stipulates that
a hospital may not place any signs in
the emergency department regarding the
prepayment of fees or payment of copays and deductibles that may have the
chilling effect of dissuading patients
from coming to the emergency
department. That, the commenter said,
could lead patients to leave prior to
receiving a medical screening
examination and stabilizing treatment
without regard to financial means or
insurance status. The commenter
expressed concern that if the hospital
attempts to provide pricing information
to patients prior to stabilizing them, it
would not only constitute an EMTALA
violation, but it could also potentially
cause the patient’s health to deteriorate
since it could delay the patient from
receiving critical care. While the
commenter noted that the penalties for
violating EMTALA are steep, their larger
concern was that if price transparency
for emergency care is not approached
carefully, a hospital could inadvertently
put patients in the position of making
life-or-death healthcare decisions based
on costs.
Several other commenters stressed
how important it is that consumers
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know the cost of emergency services in
non-life threatening circumstances. One
commenter explained that he or she
might have used price data (if available)
to determine which hospital emergency
room to go to for treatment of a non-life
threatening condition. One commenter
noted that in the case of an emergency,
people would not have time for
comparison of shoppable healthcare
services.
Response: We appreciate the
comment expressing concern about
potential interaction between EMTALA,
or section 1867 of the SSA (42 U.S.C.
1395dd), and the requirements for
hospitals to make public standard
charges under section 2718(e) of the
PHS Act. However, we believe that the
policies we finalize here that require
hospitals to make public standard
charges online are distinct from
EMTALA’s requirements and
prohibitions and that the two bodies of
law are not inconsistent and can
harmoniously co-exist. To be clear, the
price transparency provisions that we
are finalizing do not require that
hospitals post any signage or make any
statement at the emergency department
regarding the cost of emergency care or
any hospital policies regarding
prepayment of fees or payment of copays and deductibles. But we do believe
that the policies we are finalizing, for
hospitals to make public standard
charges, offer consumers opportunities
for informed decision-making by
providing them with information about
the cost of care which, for example, they
might consider prior to visiting a
hospital emergency department for
treatment of a non-life threatening
condition.
Comment: One commenter believed
that there should be better patient
education to go along with the
requirements for listing standard
charges related to items and services
and service packages.
Response: We note that this rule does
not preclude hospitals from taking
additional measures to educate their
patient populations on the data they
make publicly available.
Final Action: We are finalizing, as
proposed, the meaning of ‘‘items and
services’’ at new 45 CFR 180.20. In the
CY 2020 OPPS/ASC proposed rule, we
had included several examples of items
and services within the definition; for
clarity, we are finalizing a technical
change to enumerate these examples at
45 CFR part 180.20.
Accordingly, items and services
means all items and services, including
individual items and services and
service packages, that could be provided
by a hospital to a patient in connection
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with an inpatient admission or an
outpatient department visit for which
the hospital has established a standard
charge. Examples include, but are not
limited to the following:
(1) Supplies and procedures.
(2) Room and board.
(3) Use of the facility and other items
(generally described as facility fees).
(4) Services of employed physicians
and non-physician practitioners
(generally reflected as professional
charges).
(5) Any other items or services for
which a hospital has established a
standard charge.
D. Definitions for Types of ‘‘Standard
Charges’’
1. Overview and Background
Under our current guidelines related
to section 2718(e) of the PHS Act (as
discussed in the FY 2019 IPPS/LTCH
PPS proposed rule and final rule (83 FR
20164 and 41144, respectively)), a
hospital may choose the format it uses
to make public a list of its standard
charges, so long as the information
represents the hospital’s current
standard charges as reflected in its
chargemaster.
As we explained in the CY 2020
OPPS/ASC proposed rule, we received
feedback from several commenters in
response to the 2018 requests for
information (RFIs), including hospitals
and patient advocacy organizations,
who indicated that gross charges as
reflected in hospital chargemasters may
only apply to a small subset of
consumers; for example, those who are
self-pay or who are being asked to pay
the chargemaster rate because the
hospital is not included in the patient’s
insurance network. We explained that
stakeholders also noted that the charges
listed in a hospital’s chargemaster are
typically not the amounts that hospitals
actually charge to consumers who have
health insurance because, for the
insured population, hospitals charge
amounts reflect discounts to the
chargemaster rates that the hospital has
negotiated with third party payers.
Further, with respect to patients who
qualify for financial assistance or who
pay in cash, commenters on the RFIs
pointed out that some hospitals will
charge lower amounts than the rates that
appear on the chargemaster. Adding to
the complexity, a few commenters noted
that hospitals often package items and
services and charge a single discounted
negotiated amount for the packaged
service. For example, as discussed in
II.C. of this final rule, instead of
itemizing and charging for each
individual hospital item or service
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found on the chargemaster, a hospital
may identify a primary common
condition or procedure and charge a
single negotiated or ‘‘cash’’ amount for
the primary common condition or
procedure that includes all associated
items and services that are necessary for
treatment of the common condition or to
perform the procedures. We stated that
we believed these comments illustrated
a fundamental challenge of making
healthcare prices transparent in general,
and specifically with respect to the
issue of how we should best implement
section 2718(e) of the PHS Act; simply
put, hospitals do not offer all consumers
a single ‘‘standard charge’’ for the items
and services they furnish. Rather, the
‘‘standard charge’’ for an item or service
(including service packages) varies
depending on the circumstances
particular to the consumer (84FR 39577
through 39578).
As discussed in the CY 2020 OPPS/
ASC proposed rule, in developing our
proposals in this rulemaking we took
into account the comments we received
from the 2018 RFIs responding to our
question about how ‘‘standard charges’’
should be defined. We indicated in the
CY 2020 OPPS/ASC proposed rule that
we believed the variety of suggested
definitions reflected and supported our
assessment that hospitals can have
different standard charges for various
groups of individuals. We stated that, in
general, for purposes of 2718(e) of the
PHS Act, we believed a standard charge
could be identified as a charge that is
the regular rate established by the
hospital for the items and services
provided to a specific group of paying
patients. Therefore, we considered what
types of standard charges may reflect
certain common and identifiable groups
of paying patients and we proposed to
define standard charges to mean ‘‘gross
charges’’ and ‘‘payer-specific negotiated
charges,’’ and to codify this definition in
proposed new 45 CFR 180.20. As
explained in the CY 2020 OPPS/ASC
proposed rule, our proposal to define
standard charges as gross charges and
payer-specific negotiated charges
reflects the fact that a hospital’s
standard charge for an item or service is
not typically a single fixed amount, but,
rather, depends on factors such as who
is being charged for the item or service,
and particular circumstances that apply
to an identifiable group of people,
including, for example, healthcare
consumers that are insured members of
third party insurance products and
plans that have negotiated a rate on its
members’ behalf.
Further, in the CY 2020 OPPS/ASC
proposed rule, we acknowledged that
the proposed definition of hospital
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65537
‘‘standard charges’’ would be limited to
only two of the many possibilities that
exist for defining types of hospital
‘‘standard charges,’’ and we discussed
other potential definitions that we
considered, and sought public input and
comment on the alternatives and
additional types of standard charges that
may be useful to consumers.
Comment: Many commenters, in
particular, individuals and those
representing independent medical
practices, expressed frustration related
to the opacity of healthcare prices,
stating that hospital charges are often
unreasonable. Commenters described
hospital billing practices as a ‘‘shell
game’’ and asserted that the use of
overly inflated chargemaster rates to
negotiate with payers is an unfair
practice that leads patients to get
‘‘gouged.’’ One commenter noted that
the ‘‘lack of price transparency
circumvents market forces that seek to
keep prices within reasonable limits
[which has] resulted in the creation of
a dysfunctional market with rapidly
increasing and excessive charges for
which the consumer is ultimately
responsible.’’ Others similarly asserted
that the lack of availability of healthcare
costs leads to ‘‘predatory pricing’’ on the
part of hospitals and insurance
companies, and noted that millions of
Americans have gone bankrupt because
they get ‘‘stuck with bills that are
beyond reasonable.’’
Many commenters asserted that
hospital disclosure of standard charges
would be critical to bring accountability
and increased value to the healthcare
industry; however, many other
commenters stated that they believed
the movement toward value-based care
could or would be harmed by hospital
disclosure of standard charges,
specifically, as a result of disclosure of
payer-specific negotiated charges.
Many commenters were highly
supportive of our proposals and, in
particular, of the proposals to require
hospitals to make public both gross and
payer-specific negotiated charges. Many
commenters asserted that such
disclosure is informative and necessary
for consumers and will improve the
value of healthcare for consumers. For
example, commenters indicated that
knowing the rate the insurer had
negotiated on their behalf would be
essential for patients with co-insurance
and HDHPs to help determine their outof-pocket cost estimates in advance.
Other commenters indicated that the
gross charge or cash rate was important
for self-pay patients (with or without
insurance) to compare facility prices.
Many other commenters, however,
disagreed with our proposals,
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questioning the legal authority for
requiring disclosure of more than one
type of hospital standard charge as
proposed, with objections focused
mainly on the proposed definition and
requirement to disclose payer-specific
negotiated charges.
Many commenters supported the
addition of, or offered alternative
suggestions for, necessary types of
standard charges such as the discounted
cash price and variations of the deidentified minimum, median, or
maximum negotiated charge.
Response: Hospital bills can be
mystifying, even to those who have been
in healthcare-related professions for
years; some hospital charges are marketbased, while others are not. There are
three broad types of hospital rates,
depending on the patient and payer: (1)
Medicaid and Medicare FFS rates; (2)
Negotiated rates with private insurers or
health plans; and (3) Uninsured or selfpay.
Medicaid FFS rates are dictated by
each State and tend to be at the lower
end of market rates. Medicare FFS rates
are determined by CMS and those rates
tend to be higher than Medicaid rates
within a state. Privately negotiated rates
vary with the competitive structure of
the geographic market and usually tend
to be somewhat higher than Medicare
rates, but in some areas of the country
the two sets of rates tend to converge.
Chargemaster (gross) rates charged to
self-pay individuals bear little
relationship to market rates, are usually
highly inflated,45 and tend to be an
artifact of the way in which Medicare
used to reimburse hospitals. Under the
old system, the more services a hospital
provided and longer a patient’s stay, the
greater the reimbursement. Congress,
recognizing that the reimbursement
system created disincentives to provide
efficient care, enacted in 1983 a
prospective payment system. The
primary objective of the prospective
payment system is to create incentives
for hospitals to operate efficiently and
minimize unnecessary costs while at the
same time ensuring that payments are
sufficient to adequately compensate
hospitals for their legitimate costs in
delivering necessary care to Medicare
beneficiaries.
To partly compensate hospitals for
certain overly costly hospitalizations,
hospitals may receive an ‘‘outlier’’
45 Richman
BD, et al. Battling the Chargemaster:
A Simple Remedy to Balance Billing for
Unavoidable Out-of-Network Care. Am J Manag
Care. 2017;23(4):e100–e105. Available at: https://
www.ajmc.com/journals/issue/2017/2017-vol23-n4/
battling-the-chargemaster-a-simple-remedy-tobalance-billing-for-unavoidable-out-of-networkcare.
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payment which is based on the
hospital’s billed charges, adjusted to
cost, in comparison to the payment that
would otherwise be received and an
outlier threshold. See 42 CFR 412.84. To
determine whether an individual case
would qualify for an outlier payment,
the hospital’s cost-to-charge ratio is
applied to the covered charges to
estimate the costs of the case. In the late
1990s, many hospitals began
manipulating or gaming that ratio to
make it easier to qualify for outlier
payments. The larger the charges, the
smaller the ratio, but it takes time for
the ratio to be updated. Thus, by way of
example, if a hospital had a cost-tocharge ratio 1 to 5, or 20 percent, then
a pill which cost the hospital $1 to
purchase might be billed to a patient at
$5. However if the hospital doubled the
charge to the patient to $10, the
corresponding change in its ratio would
take time to be updated. Its costs might
look like $2 instead of $1 in the interim.
Rule changes have reduced such
manipulation. Nevertheless, some
hospitals’ charges do not reflect market
rates, and these can come into play
when a hospital bills a self-pay patient.
Hospital bills that are generated off
these chargemaster rates can be
inherently unreasonable when judged
against prevailing market rates.
As premiums under the ACA have
become less affordable,46 many
individuals, both with and without
insurance, have large unpaid hospital
bills. Some hospitals, including some
that are categorized as charitable, have
responded by instituting collection
actions against those patients. As the
number of these suits have proliferated,
many states courts have had to grapple
with hospital charging systems in order
to judge whether a given set of charges
was reasonable. There are several
potential metrics for assessing
reasonableness of a hospital’s charge in
a given case as an alternative to the
chargemaster (gross) rates described
above. These include the rate Medicare
would have paid for those same
services, the amount hospitals are
supposed to charge needy patients who
lack insurance ‘‘not more than the
amounts generally billed to individuals
who have insurance covering such care’’
(see IRC 501(r)(5)(A) or the amounts
billed consistent with the financial
assistance policy each non-profit
hospital is requires to have (see IRC
501(r)(4)).
We continue to believe that the public
posting of hospital standard charge
46 NCSL website, Health Insurance: Premiums
and Increases, at https://www.ncsl.org/research/
health/health-insurance-premiums.aspx.
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information will be useful to the public,
including consumers who need to
obtain items and services from a
hospital, consumers who wish to view
hospital prices prior to selecting a
hospital, clinicians who use the data at
the point of care when making referrals,
and other members of the public who
may develop consumer-friendly price
transparency tools or perform analyses
and make policy to drive value-based
care. In the CY 2020 OPPS/ASC
proposed rule, we stated that we
believed these proposed requirements
would represent an important step
towards putting healthcare consumers at
the center of their healthcare and
ensuring they have access to the
hospital standard charge information
they need. Additionally, as stated in the
CY 2020 OPPS/ASC proposed rule, we
believe that requiring transparency of
hospital charges will drive competition,
which, in turn, may have the effect of
not only lowering hospital charges for
the most vulnerable consumers and
those with the least market power to
negotiate prices, but also for consumers
who have access to charges negotiated
on their behalf by a third party payer.
We also continue to believe that price
transparency will lead to lower costs for
consumers and better quality of care. As
stated in the CY 2020 OPPS/ASC
proposed rule, many empirical studies
have investigated the impact of price
transparency on markets, with most
research showing that price
transparency leads to lower and more
uniform prices, consistent with
predictions of standard economic
theory. Further, evidence shows that
healthcare quality is not often correlated
with price.47 Traditional economic
analysis suggests that if consumers have
better pricing information for healthcare
services, providers would face pressure
to either lower prices or to provide
better quality of care for the prices they
charge.48 Much of the research evidence
we considered in the development of
these requirements and in the CY 2020
OPPS/ASC proposed rule are reprised in
sections II.A, II.D.3, and in our
Regulatory Impact Analysis (RIA)
(section V). Because the drive towards
value depends on access to both quality
and cost information, we believe that
disclosure of hospital standard charges
fully aligns with and supports our drive
47 Hussey P, et al. The Association Between
Health Care Quality and Cost A Systematic Review.
Ann Intern Med. January 2013; 158(1): 27–34.
Available at: https://www.ncbi.nlm.nih.gov/pmc/
articles/PMC4863949/.
48 Ginsburg P. Shopping For Price In Medical
Care. Health Affairs. 2007. Available at: https://
www.healthaffairs.org/doi/10.1377/
hlthaff.26.2.w208.
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toward value care as one half of the
value proposition. In other words,
whereas hospital quality information is
readily available to the public,49 50
hospital standard charge information is
not. Disclosure of hospital standard
charge information will therefore
complement quality information so that
consumers can make high value
decisions about their care.
Section 2718 of the PHS Act provides
authority to require disclosure of
hospital standard charges. Specifically,
section 2718(e) of the PHS Act requires
each hospital operating within the
United States for each year to establish
(and update) and make public a list of
the hospital’s standard charges for items
and services provided by the hospital,
including for diagnosis-related groups
established under section 1886(d)(4) of
the SSA. In addition to section 2718(e)
and section 2718(b)(3) (regarding
enforcement), section 1102 of the SSA
supports the requirements in this rule.
Section 1102(a) of the SSA requires the
Secretary to ‘‘make and publish such
rules and regulations, not inconsistent
with this Act, as may be necessary to the
efficient administration of the functions
with which [he or she] is charged’’
under the SSA. By its terms, this
provision authorizes regulations that the
Secretary determines are necessary to
administer these programs. In our view,
as discussed further below, there is a
direct connection between transparency
in hospital standard charge information
and having more affordable healthcare
and lower healthcare coverage costs. In
addition, these requirements also
promote the efficient administration of
the Medicare and Medicaid programs.
Since the PHS Act does not define
‘‘standard charges’’ for purposes of
implementation of section 2718(e) of the
PHS Act, we proposed to define
standard charges by the regular rate
established by the hospital for an item
or service provided to a specific group
of paying patients. The term ‘‘rate’’ is
defined in the Oxford dictionary as ‘‘a
fixed price paid or charged for
something, especially goods or
services.’’ We therefore use the terms
‘‘rate’’ and ‘‘charge’’ interchangeably
throughout this final rule. We believe
that reading the statute to permit
disclosure of several types of charges (or
‘‘rates’’) that are standard for different
identifiable groups of people is
reasonable for several reasons. First,
while there is a definition of ‘‘charge’’
49 https://www.medicare.gov/hospitalcompare/
search.html.
50 AHRQ website, Comparative Reports on
Hospitals, at https://www.ahrq.gov/talkingquality/
resources/comparative-reports/hospitals.html.
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in the SSA that is used for purposes of
Medicare (as commenters noted and as
discussed in more detail in II.D.2), there
is not a definition of ‘standard charges’
in either the PHS Act or the SSA. We
believe that had Congress intended us to
use the SSA definition of ‘‘charges,’’
Congress would have referenced that
definition of ‘‘charges’’ and included
this provision in the SSA, as opposed to
the PHS Act. Alternatively, Congress
could have indicated that hospitals
make public their ‘‘charges’’ and not
qualified the term by inserting
‘‘standard’’ in front of it. Moreover, we
believe the statute contemplates
disclosure of changes other than the
hospital chargemaster rates because the
statute requires hospitals to disclose
their ‘‘standard charges’’ for items and
services, including for diagnosis related
groups (italicized for emphasis). This
suggests that the statute contemplates
disclosure of charges other than the list
prices as found in the hospital
chargemaster because the hospital
chargemaster contains only list prices
for individual items and services.
Hospital chargemasters do not include
list prices for service packages
represented by common billing codes
such as DRGs. Instead, ‘‘standard
charges’’ for service packages are
determined as a result of negotiations
with third party payers.51 For these
reasons and others articulated in the CY
2020 OPPS/ASC proposed rule, we
believe the term ‘‘standard charges’’ for
purposes of implementing section
2718(e) of the PHS Act may be defined
to mean the standard charges as they
relate to different identifiable groups of
people and to include charges other
than those found in the hospital
chargemaster.
As there are many different
identifiable groups of paying patients
(some that are self-pay and others that
are members of third party payer
insurance plans), in the CY 2020 OPPS/
ASC proposed rule, we defined two
types of standard charges, specifically,
the gross (chargemaster) charges and the
payer-specific negotiated charges. As
explained in section II.A. of this final
rule, we continue to believe that gross
charges found in the chargemaster as
well as negotiated charges are both
informative and necessary for
consumers to understand their potential
out-of-pocket cost obligations, but such
information is not readily available to
consumers. These two specific types of
51 Office of Attorney General, Commonwealth of
Massachusetts. Examination of Health Care Cost
Trends and Cost Drivers Pursuant to G.L. c. 12C,
§ 17. (October 11, 2018). Available at: https://
www.mass.gov/files/documents/2018/10/11/
AGO%20Cost%20Trends%20Report%202018.pdf.
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standard charges have the potential to
inform two large identifiable groups of
healthcare consumers who do not
currently have ready access to hospital
charge information, specifically those
who have limited power to negotiate
charges (for example, self-pay
individuals) and those who rely on third
party payers to negotiate charges on
their behalf. We also continue to believe
that hospital face only a limited burden
to make publicly available these types of
standard charges because good business
practices necessitate that these charges
be available, maintained, and in use in
hospital billing and accounting systems.
Section 2719 of the PHS Act requires
non-grandfathered plans and issuers to
provide a notice of adverse benefit
determination 52 (commonly referred to
as an explanation of benefits (EOB)) to
participants, beneficiaries, and enrollees
after healthcare items or services are
furnished and claims for benefits are
adjudicated. We note that presentation
of both gross charges and payer-specific
negotiated charges is consistent with the
standard charges found in a patient’s
EOB that health insurance plans are
required to provide to patients following
a healthcare service. EOBs include such
data points as: The type of service
provided; the amount the hospital billed
for the service (which we define as the
gross charge for purposes of
implementing section 2718(e) of the
PHS Act); any discount the patient
received for using an in-network
provider (which we define as the payerspecific negotiated charge for purposes
of implementing section 2718(e) of the
PHS Act) or the allowed amount for outof-network providers; the portion or
amount the plan paid the hospital; and
the remaining amount owed out-ofpocket and any portion of that amount
applied toward the deductible. It is
evident that while the first two sets of
charge data are necessary for a
consumer to understand their out-ofpocket obligations, that data are
insufficient as the consumer must
obtain additional information from his
or her third party payer related to the
circumstances of their particular
insurance plan (for example, what
portion of the payer-specific negotiated
charges would be paid by the plan and
52 An adverse benefit determination means an
adverse benefit determination as defined in 29 CFR
2560.503–1, as well as any rescission of coverage,
as described in 29 CFR 2590.715–2712(a)(2)
(whether or not, in connection with the rescission,
there is an adverse effect on any particular benefit
at that time). See 26 CFR 54.9815–2719, 29 CFR
2590.715–2719 and 45 CFR 147.136. Plans subject
to the requirements of ERISA (including
grandfathered health plans) are also subject to a
requirement to provide an adverse benefit
determination under 29 CFR 2560.503–1.
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other plan dependencies such as the
patient’s co-insurance obligations or
where the patient is in their deductible
for the year). Both gross charges and
payer-specific negotiated charges are
therefore necessary starting points for
patients with third party payer
insurance to understand their out-ofpocket cost obligations, and hospitals
have ready access to both. By making
these two important types of standard
charges public, consumers could have
the information necessary to create what
could be considered an EOB in advance
of a service, rather than having to wait
for months after services were rendered
to understand the extent of their
healthcare costs. We address the gross
charges as a type of standard charge in
section II.D.2 of this final rule. We
address the payer-specific negotiated
charge in section II.D.3 of this final rule.
Finally, we appreciate commenter
support and suggestions for alternative
types of standard charges and are
finalizing three additional types of
standard charges in response to
comments. Specifically, we are
finalizing the discounted cash price (as
discussed in section II.D.4.c of this final
rule), as well as the de-identified
minimum negotiated charge and the deidentified maximum negotiated charge
which are discussed in section II.D.4.d
of this final rule.
Final Action: After considering the
public comments, we are finalizing as
proposed our definition of standard
charges at 45 CFR 180.20 to mean the
regular rate established by the hospital
for an item or service provided to a
specific group of paying patients. We
are also finalizing two types of standard
charges, gross charges and payerspecific negotiated charges (as discussed
in more detail in sections II.D.2 and
II.D.3 of this final rule). Further, as a
result of broad stakeholder support for
the discounted cash price as an
alternative type of standard charge
because of its greater applicability to
self-pay individuals, we are adding the
discounted cash price as a third type of
standard charge (as discussed in more
detail in section II.D.4.c of this final
rule). In response to the many
commenters who supported variations
of the de-identified minimum, median
and maximum negotiated charges, we
are finalizing modifications to define
the de-identified minimum negotiated
charge, and de-identified maximum
negotiated charge as a fourth and fifth
type of standard charge (as discussed in
more detail in section II.D.4.d of this
final rule). Each of these types of
standard charges (the gross charge, the
payer-specific negotiated charge, the
discounted cash price, the de-identified
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minimum negotiated charge, and the deidentified maximum negotiated charge)
and the comments received are
discussed in more detail in sections
II.D.2, II.D.3, and II.D.4.c and II.D.4.d of
this final rule, respectively.
2. Definition of ‘‘Gross Charges’’ as a
Type of Standard Charge
We proposed that, for purposes of the
first type of ‘‘standard charge,’’ a ‘‘gross
charge’’ would be defined as the charge
for an individual item or service that is
reflected on a hospital’s chargemaster,
absent any discounts (at new 45 CFR
180.20). As we explained in the CY
2020 OPPS/ASC proposed rule (84 FR
39576 through 39577), the hospital
chargemaster contains a list of all
individual items and services the
hospital provides. The gross charges
reflected in the chargemaster often
apply to a specific group of individuals
who are self-pay, but do not reflect
charges negotiated by third party payers.
We also noted that the chargemaster
does not include charges that the
hospital may have negotiated for service
packages, such as per diem rates, DRGs
or other common payer service
packages, and therefore this type of
standard charge would not include
standard charges for service packages.
We proposed to require hospitals to
make public their gross charges because,
in addition to applying to a specific
group of individuals, based on research
and stakeholder input, we believe gross
charges are useful to the general public,
necessary to promote price
transparency, and necessary to drive
down premium and out-of-pocket costs
for consumers of healthcare services.
For example, studies suggest that the
gross charge plays an important role in
the negotiation of prices with third
party insurance products that are
subsequently sold to consumers.53
Specifically, as hospital executives and
others familiar with hospital billing
cycles often note, hospitals routinely
use gross charges as a starting point for
negotiating discounted rates with third
party payers, and higher gross charges
have been found to be associated with
both higher negotiated rates and, in
turn, higher premiums and out-ofpocket costs for insured individuals.54 55
53 Bai G and Anderson GF. Market Power: Price
Variation Among Commercial Insurers for Hospital
Services. Health Affairs. Oct 2018; 37(10): 1615–
1622. Available at: https://www.healthaffairs.org/
doi/10.1377/hlthaff.2018.0567.
54 Bai G and Anderson GF. Extreme Markup: The
Fifty US Hospitals With The Highest Charge-ToCost Ratios. Health Affairs. Jun 2015; 34(6): 922–
928. Available at: https://www.healthaffairs.org/
doi/10.1377/hlthaff.2014.1414.
55 Batty M and Ippolito B. Mystery of The
Chargemaster: Examining The Role Of Hospital List
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As such, gross charges are relevant to all
consumers, including those with
insurance coverage. We stated in the CY
2020 OPPS/ASC proposed rule that we
believe that requiring transparency of
hospital gross charges may drive
competition, which, in turn, might have
the effect of not only lowering hospital
charges for the most vulnerable
consumers and those with the least
market power to negotiate prices, but
also for consumers who have access to
charges negotiated on their behalf by a
third party payer.
Additionally, we indicated in the CY
2020 OPPS/ASC proposed rule that
third party developers of consumer
price transparency tools can use gross
charges in conjunction with additional
information (such as an individual’s
specific insurance and benefit
information and quality data) to develop
and make available consumer-friendly
out-of-pocket cost estimates that allow
consumers to compare healthcare
service prices across hospitals and other
nonhospital settings of care. Moreover,
we noted in the CY 2020 OPPS/ASC
proposed rule (84 FR 39572 through
39573) that research suggests that
making such consumer-friendly
information available to the public has
been demonstrated to reduce consumer
healthcare costs. As such, we concluded
that public access to hospital gross
charges is critical to inform all patients
(both self-pay and insured) of their
choices and drive transparency in prices
and proposed to codify the proposed
definition of ‘‘gross charges’’ at new 45
CFR 180.20. We invited public comment
on our proposal to define a type of
‘‘standard charge’’ as a ‘‘gross charge’’
and on our proposed definition of
‘‘gross charge.’’
Comment: Several commenters
specifically agreed with our proposal to
include gross charges as a type of
standard charges. A few commenters
also stated that they believed gross
charges should be the only definition of
‘‘standard charge.’’ Several commenters,
however, disagreed with the proposed
inclusion of gross charges as a type of
standard charge due to their belief that
the definition conflicts with the
definition of ‘‘charges’’ used in CMS’s
Provider Reimbursement Manual Part 1
(PRM1). Several commenters
emphasized the importance of CMS
remaining consistent with its definitions
of ‘‘charges’’ due to their belief that
deviating from these definitions would
undermine the accuracy of hospital cost
Prices in What Patients Actually Pay. Health
Affairs. April 2017; 36(4): 689–696. Available at:
https://www.healthaffairs.org/doi/10.1377/
hlthaff.2016.0986.
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reports which is fundamental to the
Medicare rate-setting process.
Response: We thank commenters for
their support of a definition of the first
type of standard charge to be the ‘‘gross
charge’’ and disagree with commenters
who state that the gross charge should
be the only standard charge. As further
explained in section II.D.1 of this final
rule, we believe the statute
contemplates standard charges other
than those found in the hospital
chargemaster. Additionally, we sought
comment last year on a definition of
‘‘standard charges’’ and, as a result of
comments, we were persuaded a
singular ‘‘standard’’ that applies to all
identifiable groups of patients is not
possible because groups of patients with
third party payer insurance have
different standard charges that apply to
them than do patients without third
party payer coverage. We therefore
decline to adopt the several
commenters’ suggestions that we
finalize the gross charge as the only type
of hospital standard charge.
Further, we do not believe our
proposed definition of ‘‘gross charges’’
for purposes of implementing section
2718(e) of the PHS Act conflicts with
definitions of ‘‘charges’’ found in the
PRM1, which states ‘‘Charges refer to
the regular rates established by the
provider for services rendered to both
beneficiaries and to other paying
patients. Charges should be related
consistently to the cost of the services
and uniformly applied to all patients
whether inpatient or outpatient. All
patients’ charges used in the
development of apportionment ratios
should be recorded at the gross value;
i.e., charges before the application of
allowances and discounts
deductions.’’ 56 In fact, we believe our
definition of ‘‘gross charge’’ as the
charge for an individual item or service
that is reflected on a hospital’s
chargemaster, absent any discounts, is
the same as the charges referenced in
the PRM1 and that hospitals use to
create cost reports for Medicare
purposes. We further do not believe that
the term ‘‘charges’’ as used in the PRM
is in conflict because the term is defined
for a specific purpose and use, that is,
for purposes of Medicare cost reporting.
For this reason, we disagree with
commenters that our definition of ‘‘gross
charges’’ as a type of standard charge in
any way undermines the accuracy of
hospital Medicare cost reports.
56 Part I, Chapter 22, Section 2202.4 of the
Medicare Provider Reimbursement Manual https://
www.cms.gov/Regulations-and-Guidance/
Guidance/Manuals/Paper-Based-Manuals-Items/
CMS021929.html.
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Additionally, gross charges may also
sometimes be referred to as ‘‘billed
charges’’ or ‘‘billed amounts’’ and
appear on a patient’s EOB as the first
charge listed, and are the first step in
explaining the patient’s out-of-pocket
obligations. When the consumer has no
insurance and is self-pay, there is no
EOB and the hospital often applies the
gross charges to the consumer if no
other pre-arrangement has been worked
out (for example, if the consumer has
not taken advantage of a discounted
cash price offered by the hospitals).
Comment: Regarding the need for and
usefulness of gross charges as a type of
standard charge, several commenters
asserted that gross charge data would be
meaningful to the public and necessary
for full price transparency. A few
commenters emphasized the positive
difference this information would make
if people had the ability to see
information, for example one
commenter stated that they would like
to see the different levels of room
charges on a list, stating that it would
make a big difference for most people.
A few commenters added that by seeing
costs up front they could make an
informed decision before receiving care,
in order to both anticipate their bill and
potentially shop around. A few
commenters also expressed that by
seeing all charges up front, consumers
could determine whether ‘‘self-pay’’
would be a better deal for them than
paying the insurance copay and
deductible. By contrast, several
commenters disagreed that gross charges
would be applicable or useful to the
public, because they believe that they
do not represent what most consumers
would actually pay (particularly those
with third party payer coverage) and
would not be meaningful to the public.
One commenter stated that even in the
hands of app developers, this data may
have little relevance to insured
individuals because the data wouldn’t
be presented in the context of the
individual’s health plan. One
commenter disagreed with hospitals
posting gross charges because they
believe that in rural areas, the
appearance of high prices may deter a
consumer from seeking care.
Response: We thank the commenters
for their input. We agree with
stakeholders who suggested that while
the gross charge may be applicable to
some self-paying patients, it is not the
standard charge that applies to groups of
insured patients. Even some self-paying
patients may find that some hospitals
offer a cash discounted price off their
chargemaster rates (as discussed in more
detail in section II.D.4.c of this final
rule). Because of this, we are finalizing
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65541
definitions for several types of standard
charges that would be applicable to both
self-pay patients as well as consumers
with third party payer coverage. As we
outlined in more detail in the CY 2020
OPPS/ASC proposed rule (84 FR 39578
through 39579), research suggests that
gross charges appear to play an
important role in prices paid by
consumers with third-party insurance
products because higher gross charges
are associated with higher negotiated
rates, premiums, and consumer out-ofpocket costs. For consumers who are
self-pay or who lack insurance, such
information can be useful in advance of
selecting a provider of healthcare
services to help patients determine
potential out-of-pocket cost obligations.
This information may also have high
value for researchers and other
academics who can assess regional and
national cost trends to determine the
effectiveness of price transparency
efforts, and for lawmakers to determine
policy improvements that are necessary
to drive toward value in healthcare. As
noted in II.D.1 in this final rule, the
presentation of gross charges is the
starting point for insured patient’s
EOBs, which contain multiple charge
and other data points necessary for
patients to understand their out-ofpocket cost obligations. We therefore
believe that disclosure of gross charges
are useful to the general public and
necessary to promote price transparency
and reduce premiums and out-of-pocket
costs for consumers of healthcare.
We recognize the unique challenges
that rural hospitals face, but disagree
that rural hospitals making standard
charges public would deter patients
from seeking necessary care, especially
where there is already minimal
competition with a CAH or sole
community hospital. We believe instead
that this information would allow
consumers to include price
considerations in their treatment plan
for elective procedures, which may
result in selecting the most appropriate
setting for their care and increased
patient satisfaction.
Final Action: At new 45 CFR 180.20,
we are finalizing as proposed a
definition of gross charge, as a type of
standard charge, to mean the charge for
an individual item or service that is
reflected on a hospital’s chargemaster,
absent any discounts.
3. Definition of ‘‘Payer-Specific
Negotiated Charge’’ as a Type of
Standard Charge
As noted in section II.D.1. of this final
rule, in general, for purposes of 2718(e),
we believe a standard charge can be
identified as a regular rate established
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by the hospital for the items and
services provided to a specific group of
paying patients. We proposed that, for
purposes of the second type of
‘‘standard charge,’’ the ‘‘payer-specific
negotiated charge’’ would be defined as
the charge that the hospital has
negotiated with a third party payer for
an item or service. We further proposed
to define ‘‘third party payer’’ for
purposes of section 2718(e) of the PHS
Act as an entity that, by statute,
contract, or agreement, is legally
responsible for payment of a claim for
a healthcare item or service, and to
codify this definition at new 45 CFR
180.20. As the reference to ‘‘third party’’
suggests, this definition excludes an
individual who pays for a healthcare
item or service that he or she receives
(such as self-pay patients).
We proposed to focus on a second
type of ‘‘standard charge’’ related to
negotiated rates because most
consumers (over 90 percent 57) rely on a
third party payer to cover a portion or
all of the cost of healthcare items and
services, including a portion or all of the
cost of items and services provided by
hospitals (in accordance with the terms
and conditions of the third party payer’s
contract agreement with that consumer).
Some third party payers (for example,
FFS Medicare and Medicaid) currently
make public the maximum rate they pay
for a hospital item or service. However,
many third party payers do not reveal
their negotiated rates, even to
individuals on behalf of whom they pay.
Additionally, many contracts between
third party payers and hospitals contain
so-called ‘‘gag clauses’’ that prohibit
hospitals from disclosing the rates they
have negotiated with third party
payers.58 Because consumers are not
generally part of the negotiations or
privy to the resulting negotiated rates,
consumers often find it difficult to learn
in advance of receiving a healthcare
service the rate their third party payers
may pay and subsequently what the
individual’s portion of the cost will be.
Having insight into the charges
negotiated on one’s behalf is necessary
for insured healthcare consumers to
determine and compare their potential
out-of-pocket obligations prior to receipt
of a healthcare service. For example, if
a healthcare consumer knows that he or
57 Berchick E, et al. Health Insurance Coverage in
the United States: 2017. United States Census
Bureau, September 2018. Available at: https://
www.census.gov/content/dam/Census/library/
publications/2018/demo/p60-264.pdf.
58 King JS, Muir MA, Alessi SA. Clarifying Costs
Can Increased Price Transparency Reduce
Healthcare Spending? 4 William & Mary Policy
Review 319 (2013). Available at: https://
pdfs.semanticscholar.org/f604/1a0484c65
c593525d0c07e040cf655697f2d.pdf.
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she will be responsible for a co-pay of
20 percent of the charges for a hospital
service, he or she can compare the
charges that the third party negotiated
with hospital A and hospital B and,
from that, the consumer can determine
his or her expected out-of-pocket costs
at hospital A versus hospital B.
In the CY 2020 OPPS/ASC proposed
rule, we explained that knowing a
negotiated charge is also important
because a growing number of insured
healthcare consumers are finding that
some services are more affordable if the
consumer chooses to forego utilizing
their insurance product and simply pays
out-of-pocket. For example,
stakeholders and reports indicate that
an increasing number of consumers are
discovering that sometimes providers’
cash discounts can mean paying lower
out-of-pocket costs than paying the outof-pocket costs calculated after taking
into account a third party payer’s higher
negotiated rate.59 60 61 62 However,
consumers cannot make such
determinations without knowing the
rate their third party payer has
negotiated.
For the reasons discussed above, we
indicated that we agreed with 2018 RFI
commenters that gross charges (as a type
of standard charge) could be applicable
to one identifiable group of consumers
(for example, self-pay) but are not
enough for another large and
identifiable group of consumers (for
example, those with third party
insurance) to know their charges for
hospital items. Thus, we proposed that
a type of ‘‘standard charge’’ is the
‘‘payer-specific negotiated charge’’ that
would be defined as the charge (or rate)
that a hospital has negotiated with a
third party payer for an item or service.
We stated that we decided to focus on
negotiated rates rather than all payer
rates because charges that are not
negotiated (for example, FFS Medicare
or Medicaid rates) are often already
publicly available.
59 Beck M. How to Cut Your Health-Care Bill: Pay
Cash. The Wall Street Journal. February 15, 2016.
Available at: https://www.wsj.com/articles/how-tocut-your-health-care-bill-pay-cash-1455592277.
60 Rosato D. How Paying Your Doctor in Cash
Could Save You Money. Consumer Reports. May 4,
2018. Available at: https://
www.consumerreports.org/healthcare-costs/howpaying-your-doctor-in-cash-could-save-you-money/.
61 Terhune C. Many hospitals, doctors offer cash
discount for medical bills. Los Angeles Times.
March 27, 2012. Available at: https://
www.latimes.com/business/healthcare/la-fimedical-prices-20120527-story.html.
62 Weissmann D. ‘An Arm And A Leg’: Can You
Shop Around For A Lower-Priced MRI? Kaiser
Health News. June 19, 2019. Available at: https://
khn.org/news/an-arm-and-a-leg-can-you-shoparound-for-a-lower-priced-mri/.
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In the CY 2020 OPPS/ASC proposed
rule, we stated that it is clear that such
data is necessary for consumers to be
able to determine their potential out-ofpocket costs in advance, and that we
believe the release of such data would
help drive down healthcare costs (as
discussed above and supported by
recent price transparency research).
However, we also stated we recognized
that the impact resulting from the
release of negotiated rates is largely
unknown and that some stakeholders
had expressed concern that the public
display of negotiated rates, at least
without additional legislative or
regulatory efforts, may have the
unintended consequence of increasing
healthcare costs of hospital services in
highly concentrated markets or as a
result of anticompetitive behaviors.63
Moreover, we recognized in the CY
2020 OPPS/ASC proposed rule that
requiring release of all payer-specific
negotiated charges for all hospital items
and services (both individual items and
services as well as service packages)
would mean releasing a large amount of
data. To get a sense for the number of
potential negotiated rates a hospital may
have, we conducted an internal analysis
of plans in the regulated individual and
small group insurance markets under
the ACA. Our analysis indicated that the
number of products or lines of service
per rating area ranges from
approximately 1 to 200 in the individual
market (averaging nearly 20 products or
lines of service in each rating area),
while in the small market group, the
number ranges from 1 to 400 (averaging
nearly 40 products or lines of service in
each rating area). We further noted our
belief that most, if not all, hospitals
maintain such data electronically
because these data are used routinely for
billing, and concluded that disclosure of
such large amounts of charge
information would present little burden
for a hospital to electronically pull and
display online in a machine-readable
format (as discussed in more detail in
the CY 2020 OPPS/ASC proposed rule
at 84 FR 39581 through 39585). We
went on to explain that ensuring display
of such a large amount of data in a
consumer-friendly manner may pose
greater challenges.
In the CY 2020 OPPS/ASC proposed
rule, we noted that, in displaying the
payer-specific negotiated charges,
hospitals would display all negotiated
charges, including, for example, charges
63 King JS, Muir MA, Alessi SA. Clarifying Costs
Can Increased Price Transparency Reduce
Healthcare Spending? 4 William & Mary Policy
Review 319 (2013). Available at: https://
pdfs.semanticscholar.org/f604/1a0484c65
c593525d0c07e040cf655697f2d.pdf.
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negotiated with Medicare Advantage
plans because such rates are negotiated.
Conversely, hospitals would not include
payment rates that are not negotiated,
such as rates set by certain healthcare
programs that are directly governmentfinanced, for example, those set by CMS
for FFS Medicare. We indicated,
however, that we believed the display of
a non-negotiated rate (for example,
display of a Medicare and Medicaid FFS
rate for an item or service) in
conjunction with the gross charge and
the payer-specific negotiated charges for
the same item or service could be
informative for the public and that the
proposals would not preclude hospitals
from displaying them.
Finally, we proposed to codify the
definition of ‘‘payer-specific negotiated
charge’’ and ‘‘third party payer’’ at new
45 CFR 180.20. We invited public
comment on our proposal to define a
type of ‘‘standard charge’’ as a ‘‘payerspecific negotiated charge.’’ We also
sought public comment on whether and
how the release of such specific charge
information could result in unintended
consequences and on whether and how
there may be different methods for
making such information available to
individuals who seek to understand
what their out-of-pocket cost obligations
may be in advance of receiving a
healthcare service.
Comment: Many individual
commenters and organizations,
including patient/consumer advocates,
IT and tool developers, medical
associations, and small business plan
entities, were strongly in favor of the
release of payer-specific negotiated
charges, indicating that such
information is essential for individual
decision-making. One commenter stated
that the Administration’s goal to
improve the value of care relies on the
disclosure of negotiated rates.
By contrast, many commenters,
including commenters from hospitals
and large insurers, indicated that the
release of gross charges or payer-specific
negotiated charges would not be helpful
or meaningful to consumers who want
to know their individual out-of-pocket
estimates. Many commenters noted that
the release of gross and payer-negotiated
charges is not sufficient by itself,
highlighting consumers’ need for
additional information (such as co-pay,
deductible, etc.) to get an individualized
out-of-pocket estimate. Several
commenters stated their belief that
identification of the payer was not
necessary for negotiated charges to be
useful to the public. Several
commenters raised concern related to
the potential for patient confusion over
the posting of negotiated charges,
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including if they try to determine how
it impacts their financial obligation or
over potential discrepancies between
the amount the hospital makes public
and the amount the insurer indicates to
the patient in EOBs sent after the fact.
Many commenters stated that they do
not believe consumers will use this
information.
Response: We appreciate the response
from stakeholders who expressed
support for our proposed definition of a
type of standard charge as the payerspecific negotiated charge. We agree for
the policy reasons indicated in the CY
2020 OPPS/ASC proposed rule (84 FR
39579 through 39580) and by
commenters that public disclosure of
payer-specific negotiated charge (also
known as negotiated rates) is essential
for insured individuals’ decisionmaking. For the reasons we have
indicated, we disagree with commenters
who indicated that payer-specific
negotiated charges are meaningless to
consumers, but we do agree that a
payer-specific negotiated charge does
not, in isolation, provide a patient with
an individualized out-of-pocket
estimate. As explained in the GAO
report we describe in section II.A. of
this final rule, payer-specific negotiated
charges are a critical piece of
information necessary for patients to
determine their potential out-of-pocket
cost estimates in advance of a service.
As explained in section II.D.1 of this
final rule, EOBs are designed to
communicate provider charges and
resulting patient cost obligations, taking
third party payer insurance into
account, and the payer-specific
negotiated charge is a standard and
critical data point found on patient’s
EOB. When a consumer has access to
payer-specific negotiated charge
information prior to receiving a
healthcare service (instead of sometimes
weeks or months after the fact when the
EOB arrives), in combination with
additional information from payers, it
can help him or her determine potential
out-of-pocket cost. Knowing a
negotiated charge is also important
because a growing number of insured
healthcare consumers are finding that
some services are more affordable when
they elect to forego utilizing their health
insurance product and, instead, pay outof-pocket. We further agree that
consumers may be able to get a general
sense of the cost of healthcare services
by viewing de-identified negotiated
rates, and we address this issue in more
detail in section II.D.4.d of this final
rule. However, we believe that having
hospitals disclose payer-specific
negotiated charges would provide
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consumers with more specific
information for their particular
circumstance and insurance plan.
We disagree that there will be
confusing discrepancies between the
posted hospital charges and the
patient’s EOB because payer-specific
negotiated rates are agreed upon, and,
therefore, known in advance by both
hospitals and third party payers. We
suggest that hospitals access and review
the rate sheets (also referred to as rate
tables or fee schedules) that are
typically included in the contracts
hospitals have with third party payers
in order to ensure the information they
make public is consistent with their
contracted rates.
Finally, based on the multitude of
comments we received from patient
advocates and individual consumers,
we believe that patients will use the
charge information that hospitals make
public. Additionally, hospital charge
information can inform shared decisionmaking and patient-centric referrals at
the point of care. Recent research
suggests that an increasing number of
patients are seeking information from
their providers about the anticipated
costs of healthcare services. For
example, in a recent national survey, a
majority of patients, physicians, and
employers are ready, or feel a
responsibility, to have cost of healthcare
conversations.64 Such conversations
depend on the availability of standard
charge information.
Comment: Many commenters,
including hospital associations and
large insurers, questioned CMS’ legal
authority to require disclosure of payerspecific negotiated charges. For
example, many commenters believed
that payer-specific negotiated rates are
proprietary and requiring their
disclosure would infringe upon
intellectual property rights recognized
by Congress through the Defend Trade
Secrets Act of 2016 (DTSA).65 A few
commenters indicated that disclosure of
payer-specific negotiated charges was
likely limited under the Freedom of
Information Act (FOIA). Commenters
argued that the FOIA protects trade
secrets and confidential commercial or
financial information against broad
public disclosure. These commenters
further asserted that the requirement to
disclose payer-specific negotiated
charges would violate the First
Amendment, and, therefore, compelling
disclosure would be unconstitutional.
Several commenters pointed out that
64 University of Utah Health website, Let’s Talk
About Money, https://uofuhealth.utah.edu/value/
lets-talk-about-money.php.
65 18 U.S.C. 1836.
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some contracts between hospitals and
payers include non-disclosure clauses,
prohibiting the hospital from disclosing
the rates they negotiated with third
party payers.
Response: We believe that we have
authority to define ‘‘standard charges’’
to mean the regular rate established by
the hospital for an item or service
provided to a specific group of paying
patients, and that one type of standard
charges is payer-specific negotiated
charges. As explained in section II.D.2
of this final rule, the term ‘‘standard
charges’’ is not defined in either the
SSA or the PHS Act. We are also not
aware of any historical usage of the term
by the industry, and note that its
association with the rates in a hospital
chargemaster appears to have originated
with our guidelines that took effect on
January 1, 2019. Additionally, we note
that many stakeholders (including
hospitals) have provided feedback that
our current guidelines are neither
sufficient to inform consumers
(particularly those with insurance) what
their charges for a hospital item or
service will be, nor reflective of the
financial liability that they will actually
incur. We therefore concluded it would
be reasonable to define payer-specific
negotiated charges as a type of
‘‘standard charge.’’
We do not believe that the payerspecific negotiated charges hospitals
would be required to disclose are
proprietary or would constitute trade
secrets. To the contrary, this
information is already generally
disclosed to the public in a variety of
ways, for example, through State
databases and patient EOBs. For
example, New Hampshire has released
payer and provider specific negotiated
rates in its state operated HealthCost
database. Maine has also been releasing
negotiated rate information for over a
decade. Additionally, the rates are
routinely available to patients through
EOBs. As noted elsewhere, that
presentation of both gross charges and
payer-specific negotiated charges is
consistent with the standard charges
found in a patient’s EOBs that health
insurance plans are required to provide
to patients following a healthcare
service. EOBs include such data points
as: The type of service provided; the
amount the hospital billed for the
service (which we define as the gross
charge for purposes of these
requirements); any in-network discount
an insured patient received (which we
define as the payer-specific negotiated
charge for purposes of these
requirements); and the remaining
amount owed out-of-pocket and any
portion of that amount applied toward
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the patient’s deductible. Additionally,
negotiated rates are relatively easy to
access, for example, by competitors in a
local market, by price transparency
vendors who use reverse engineering to
determine negotiated rates for their
tools, and by private entities that use
crowdsourcing efforts to collect the
standard charge information found on
EOBs and display them online to assist
the public in price shopping.66
With respect to the Defend Trade
Secrets Act of 2016, we do not believe
it is applicable here, as it applies only
to trade secrets that are
‘‘misappropriated,’’ which is defined by
reference to, among other things,
‘‘improper means,’’ where there was a
‘‘duty to maintain the secrecy,’’ or
‘‘accident or mistake.’’ We do not
believe any of the meanings of the term
‘‘misappropriation’’ under the Defend
Trade Secrets Act apply to a
circumstance where an agency rule
requires disclosure of certain
information. 18 U.S.C. 1836 et seq.
Finally, to the extent commenters
intended to cite the Trade Secrets Act,
we note that it applies only to
disclosures ‘‘not authorized by law,’’ in
contrast to the circumstance here, where
this final rule requires disclosure of
certain information. 18 U.S.C. 1905. We
would also note that, as a threshold
matter, the Trade Secrets Act
contemplates disclosure by a federal
actor (‘‘an officer or employee of the
United States or of any department or
agency thereof . . . ’’), and not
disclosures by private entities, as
contemplated by this final rule.
Consistent with price transparency
and economics research (discussed in
section II.D.1 and elsewhere in this final
rule), we believe that the disclosure of
payer-specific negotiated charges would
serve a greater public interest and that
‘‘concealing negotiated price
information serves little purpose other
than protecting dominant providers’
ability to charge above-market prices
and insurers’ ability to avoid paying
other providers those same elevated
rates.’’ 67 For Maine, one State official
indicated that ‘‘to date, there is no
evidence that the release of [Maine
Health Data Organization] claims data
has resulted in an anticompetitive
market. In fact, quite the opposite.
Transparency is what fosters a
66 https://clearhealthcosts.com/pricecheck-shareform/.
67 Catalyst for Payment Reform. ‘‘Report Card on
State Price Transparency Laws,’’ July 2015.
Available at: https://www.catalyze.org/wp-content/
uploads/woocommerce_uploads/2017/04/2015Report-Card-on-State-Price-Transparency-Laws.pdf.
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competitive market.’’ 68 Similarly,
disclosure of claims data in New
Hampshire has resulted in increased
competition and reduced prices for
healthcare services.69 Additionally,
even if a contract between a hospital
and a payer contained a provision
prohibiting the public disclosure of its
terms, it is our understanding that such
contracts typically include exceptions
where a particular disclosure is required
by Federal law.
With respect to FOIA, while
Exemption 4 does protect confidential
trade secrets or confidential commercial
information, it does not apply to
disclosures by private entities such as
hospitals as contemplated by this rule.
Finally, requiring hospitals to make
public standard charges is consistent
with First Amendment jurisprudence.
Rules, such as this one, that require
certain factual commercial disclosures
pass muster under the First Amendment
where the disclosure advances a
government interest and does not
unduly burden speech. When the
government requires accurate
disclosures in the marketing of
regulated products under appropriate
circumstances, it does not infringe on
protected First Amendment interests. As
the United States Supreme Court
recognized in Zauderer v. Office of
Disciplinary Counsel, 471 U.S. 626
(1985) and recently confirmed in Nat’l
Inst. of Family and Life Advocates v.
Becerra, 138 S. Ct. 2361, 2372, 2376
(2018) (‘‘NIFLA’’), required disclosures
of factual, noncontroversial information
in commercial speech may be subject to
more deferential First Amendment
scrutiny. Under the approach
articulated in Zauderer, courts have
upheld required disclosures of factual
information in the realm of commercial
speech where the disclosure
requirement reasonably relates to a
government interest and is not
unjustified or unduly burdensome such
that it would chill protected speech.70
As further discussed below, and cited
elsewhere in this final rule, the required
disclosures here advance the
68 Gudiksen KL, et al. The Secret of Health Care
Prices: Why Transparency Is in the Public Interest.
California Health Care Foundation. July 2019.
Available at: https://www.chcf.org/wp-content/
uploads/2019/06/SecretHealthCarePrices.pdf.
69 Brown ZY. Equilibrium Effects of Health Care
Price Information. The Review of Economics and
Statistics. Published October 2019; 101:4, 699–712.
Available at: https://www-personal.umich.edu/
∼zachb/zbrown_eqm_effects_price_
transparency.pdf.
70 See Zauderer, 471 U.S. at 651; Milavetz v.
United States, 559 U.S. 229, 250, 252–53 (2010);
NIFLA, 138 S. Ct. at 2376 (‘‘[W]e do not question
the legality of . . . purely factual and
uncontroversial disclosures about commercial
products.’’).
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government’s substantial interest in
providing consumers with factual price
information to facilitate more informed
health care decisions, as well as the
government’s substantial interest in
lowering healthcare costs, as further
discussed below.71 As discussed
elsewhere in this final rule, each of the
standard charges we have chosen
specifically because they are relevant to
a specific group of consumers. For
example, the negotiated charges are
directly relevant to patients covered by
a payer’s specific insurance product. We
note that hospitals regularly use their
payer-specific negotiated charges to
determine insured patient out-of-pocket
costs, and payer-specific negotiated
charges are also regularly supplied to
consumers on EOBs.
Furthermore, these disclosures would
neither ‘‘drown[ ] out the [speaker’s]
own message’’ or ‘‘effectively rule[ ]
out’’ a mode of communication.72
Indeed, the requirement to provide
standard charge information is not
unduly burdensome where, as here, the
hospital has the ability to convey other
information of its choosing in the
remainder of the website and other
interactions with the public.
Some comments assert that the rule
should be evaluated under the
intermediate scrutiny test for
commercial speech articulated in
Central Hudson Gas & Elec. Corp. v.
Pub. Serv. Comm’n, 447 U.S. 557 (1980).
Under that test, agencies can regulate
speech where the regulation advances a
substantial government interest and the
regulation is no more extensive than
necessary to serve that interest.
Although many of these comments
failed to offer any explanation as to why
the more deferential review under
Zauderer would not apply, one
comment asserted that the Zauderer test
is limited to disclosures that appear in
advertising. We disagree. ‘‘Although the
Court in Zauderer may have referred
repeatedly to advertising . . . , these
references were contextual and not the
sine qua non of Zauderer’s reasoning.
Zauderer did not base its holding on
any notion of estoppel or equity, but on
the lack of a significant constitutional
interest in not disclosing factual and
noncontroversial information to
consumers.’’ CTIA—Wireless Ass’n v.
71 See generally, Pharm. Care Mgmt. Ass’n v.
Rowe, 429 .3d 294, 310 (1st Cir. 2005) (recognizing
that the government interest in cost-effective health
care justified disclosure of financial interests of
pharmacy benefit managers); N.Y. State Rest. Ass’n
v. N.Y. City Bd. Of Health, 556 F.3d 114, 134 (2d
Cir. 2009) (recognizing that the government interest
in ‘‘promot[ing] informed consumer decisionmaking’’ justified posting of calories on menus in
chain restaurants).
72 NIFLA, 138 S. Ct. at 2378.
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City of Berkeley, 158 F. Supp. 3d 897,
903 (N.D. Cal. 2016), aff’d, 928 F.3d 832,
842 (9th Cir. 2019).
In any event, although we believe that
Zauderer provides the appropriate
framework for review, the rule also
satisfies the elements of the Central
Hudson test. The government interest
here is clear. As discussed above, the
required disclosures here advance the
government’s substantial interest in
providing consumers with factual price
information to facilitate more informed
health care decisions. In addition, these
disclosures advance the government’s
substantial interest in lowering
healthcare costs. Healthcare costs
continue to rise, and healthcare
spending is projected to consume
almost 20 percent of the economy by
2027.73 Hospital spending accounts for
a substantial share of overall healthcare
spending, and hospital charges for
similar procedures can vary
significantly from hospital to hospital. It
is well-documented that the lack of
transparency in hospital prices is a
barrier that prevents consumers from
understanding what their financial
liability will be for hospital items and
services, and that lack of knowledge not
only affects their ability to shop for
value, but also gives them no ability to
proactively make decisions that could
impact that financial liability.
Additionally, as discussed in section
II.D.1, these rising costs impact the
Medicare Trust Funds and the amount
paid to hospitals by Medicare.
We note further that public comments
received for this rule, healthcare
consumers resoundingly expressed
support for having access to hospital
pricing information. This public
sentiment is echoed in numerous
studies and surveys show that
consumers are concerned about the high
cost of healthcare, want to be able to
know prices prior to purchasing a
healthcare service, and are frustrated by
the lack of access to information on
medical costs before receiving medical
services.74 75 76 77 78 Employers are also
73 CMS. National Health Expenditures
Projections, 2018–2027: Forecast Summary.
Available at: https://www.cms.gov/ResearchStatistics-Data-and-Systems/Statistics-Trends-andReports/NationalHealthExpendData/Downloads/
ForecastSummary.pdf.
74 Sinha SL, et al. ‘‘The Demographics of
Healthcare Price Transparency.’’ Accenture
Consulting, 2017. Available at: https://
www.accenture.com/_acnmedia/pdf-69/accenturehealth-the-demographics-of-healthcare-pricetransparency-infographic.pdf.
75 Foundation for Government Accountability.
‘‘Poll: Voters Want The Right To Shop For Health
Care.’’ January 29, 2018. Available at: https://thefga.
org/poll/right-to-shop-poll/.
76 Schleifer D, et al. ‘‘Still Searching: How People
Use Health Care Price Information in the United
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actively seeking healthcare pricing
information for initiatives that drive
reductions in healthcare costs79 80 81 and
once they have access, they are able to
drive healthcare value.82
The rule is also narrowly tailored to
achieve the government’s interest
because there is a direct connection
between the disclosure of hospital
standard charge information and
reduced healthcare costs and increased
patient satisfaction. As we have
described elsewhere in this final rule,
we believe the regulations we are
establishing are an important first step
in providing information to consumers
to support their healthcare decisionmaking. Although some States have
made progress in promoting price
transparency, most State efforts fall
short. Further, existing hospital
initiatives to make public their gross
charges are not sufficient to provide
insured consumers with the information
applicable to them. Specifically, insured
consumers need to understand the rates
third party payers have negotiated
(payer-specific negotiated charges) on
their behalf for hospital items and
services. There is emerging evidence
that when healthcare consumers use
healthcare pricing information, cost
savings results for both inpatient and
outpatient care without sacrificing
States.’’ Public Agenda, April 2017. Available at:
https://www.publicagenda.org/wp-content/uploads/
2019/09/PublicAgenda_StillSearching_Brief_
2017.pdf.
77 ‘‘News Reports about a Weakening Economy
Impacting How Some Patients Seek Medical
Treatment.’’ TransUnion. September 17, 2019.
Available at: https://newsroom.transunion.com/
news-reports-about-a-weakening-economyimpacting-how-some-patients-seek-medicaltreatment/.
78 Shih YT, and Chien C. A review of cost
communication in oncology: Patient attitude,
provider acceptance, and outcome assessment.
Cancer, 123: 928–39. Available at: https://online
library.wiley.com/doi/full/10.1002/cncr.30423.
79 Livingston S. Setting the bar for hospital prices:
NC aims to tie reimbursement to Medicare for state
employees. Modern Healthcare. March 2, 2019.
Available at: https://www.modernhealthcare.com/
hospitals/setting-bar-hospital-prices.
80 Prager E. Consumer Responsiveness to Simple
Health Care Prices: Evidence from Tiered Hospital
Networks. September 21, 2017. Available at: https://
pdfs.semanticscholar.org/053e/218f13dcd7f21002
c623268151918fa708f0.pdf?_ga=2.190709035.
1212076034.1563994376-1742025875.1563994376.
81 Wu S, et al. Price Transparency for MRIs
Increased Use Of Less Costly Providers And
Triggered Provider Competition. Health Affairs.
August 2014; 33(8). Available at: https://doi.org/
10.1377/hlthaff.2014.0168.
82 Sachdev G, et al. Self-Insured Employers Are
Using Price Transparency To Improve Contracting
With Health Care Providers: The Indiana
Experience. Health Affairs. October 7, 2019.
Available at: https://www.healthaffairs.org/do/
10.1377/hblog20191003.778513/full/.
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Federal Register / Vol. 84, No. 229 / Wednesday, November 27, 2019 / Rules and Regulations
quality.83 84 85 86 87 Moreover, cost
savings drive competition 88 89 and
create a ‘spillover’ effect benefitting all
regional consumers.90 91 92 Additionally,
providers are discovering that providing
price estimates ahead of a healthcare
service results in fewer billing-related
complaints, decreased revenue losses
for the provider, and overall increased
patient satisfaction.93 94 Finally, we are
not aware of any alternatives to the
83 Robinson JC and Brown TT. Increases In
Consumer Cost Sharing Redirect Patient Volumes
And Reduce Hospital Prices For Orthopedic
Surgery. Health Affairs. August 2013; 32(8).
Available at: https://www.healthaffairs.org/doi/full/
10.1377/hlthaff.2013.0188.
84 Blase B. ‘‘How Price Transparency Would
Revolutionize Healthcare.’’ New York Post. October
12, 2019. Available at: https://nypost.com/2019/10/
12/how-price-transparency-would-revolutionizehealthcare/.
85 Rhoads J. Right to Shop for Public Employees:
How Health Care Incentives are Saving Money in
Kentucky. Foundation for Government
Accountability. March 8, 2019. Available at: https://
thefga.org/wp-content/uploads/2019/03/RTSKentucky-HealthCareIncentivesSavingMoneyDRAFT8.pdf
86 Lieber EMJ. ‘‘Does It Pay to Know Prices in
Health Care?’’ American Economic Journal. 2017,
9(1): 154–179. Available at: https://
pubs.aeaweb.org/doi/pdfplus/10.1257/
pol.20150124.
87 Whaley C, et al. ‘‘Association Between
Availability of Health Service Prices and Payments
for These Services.’’ JAMA. 2014; 312(16):1670–
1676. Available at https://jamanetwork.com/
journals/jama/fullarticle/1917438.
88 Boynton A, and Robinson JC. Appropriate Use
Of Reference Pricing Can Increase Value. Health
Affairs. July 7, 2015. Available at: https://
www.healthaffairs.org/do/10.1377/hblog20150707.
049155/full/.
89 Wu S, et al. Price Transparency for MRIs
Increased Use Of Less Costly Providers And
Triggered Provider Competition. Health Affairs.
August 2014; 33(8). Available at: https://doi.org/
10.1377/hlthaff.2014.0168.
90 Brown ZY. Equilibrium Effects of Health Care
Price Information. The Review of Economics and
Statistics. Published October 2019; 101:4, 699–712.
Available at: https://www-personal.umich.edu/
∼zachb/zbrown_eqm_effects_price_
transparency.pdf.
91 Wu S, et al. Price Transparency for MRIs
Increased Use Of Less Costly Providers And
Triggered Provider Competition. Health Affairs.
August 2014; 33(8). Available at: https://doi.org/
10.1377/hlthaff.2014.0168.
92 Blase B. ‘‘How Price Transparency Would
Revolutionize Healthcare.’’ New York Post. October
12, 2019. Available at: https://nypost.com/2019/10/
12/how-price-transparency-would-revolutionizehealthcare/.
93 Otero HJ, et al. The Cost-Estimation
Department: A Step Toward Cost Transparency in
Radiology. JACR. February 2019; 16(2): 194–95.
Available at: https://www.jacr.org/article/S15461440(18)30981-5/fulltext.
94 Hammer DC. ‘‘Adapting customer service to
consumer-directed health care: by implementing
new tools that provide greater transparency in
billing, hospitals can decrease collection costs
while improving consumer satisfaction.’’
Healthcare Financial Management. September
2006; 60(9). Available at: https://go.galegroup.com/
ps/anonymous?id=GALE%7CA151440927&sid=
googleScholar&v=2.1&it=r&linkaccess=abs&issn=
07350732&p=AONE&sw=w.
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policies in this final rule that would be
as effective in achieving these results.
As discussed above and elsewhere in
this final rule, hospital chargemaster
disclosures do not include the charges
applicable to insured consumers; and
relying on individual hospitals for
voluntary disclosures may not allow
consumers to make comparisons
between hospitals or sufficiently drive
competition or create ‘‘spillover’’
effects. Similarly, relying on state-bystate initiatives would only benefit
consumers in some states.
Comment: Many commenters
expressed confusion related to the term
payer-specific negotiated charge,
indicating that such a hospital charge
does not exist, or that the term is in
conflict with terminology used within
the healthcare industry, such as
‘‘negotiated rates’’ or the ‘‘allowed
amount.’’ Several commenters asserted
that hospitals do not negotiate
‘‘payment rates,’’ ‘‘methodologies’’ or
‘‘allowed amounts’’ with third party
payers. Additionally, many commenters
suggested in general usage (and
according to one commenter, as defined
by dictionary.com), the definition of
‘‘standard’’ means ‘‘usual, common, or
customary’’ and asserted that payerspecific negotiated charges are not
usual, common, or customary because
they vary from payer to payer.
Other commenters seemed to suggest
that payer-specific charges could not be
identified because, as one commenter
noted, rates associated with DRGs can
have three levels of payments based on
the types of co-morbidities and can
change based on change in a patient’s
condition or treatment plan.
Response: As explained in the CY
2020 OPPS/ASC proposed rule, we
could not identify an existing definition
of ‘‘standard charges,’’ nor do we
believe that a single ‘‘standard charge’’
can be identified for purposes of
implementing section 2718(e) of the
PHS Act, since factors such as insured
status and the particular third-party
payer plan drive the hospital charges
borne by consumers. Therefore, we
proposed a new definition for ‘‘standard
charges’’ (which can also be called
‘‘rates’’) that could apply to certain
identifiable groups of individuals—
specifically, individuals that are selfpay and individuals that have third
party payer coverage. Thus, the charges
the hospital has negotiated with a
specific payer for a hospital item or
service are the standard charges that
apply to consumers with a specific plan
through a specific insurer—in other
words, the rate is the usual or common
rate for the members of that plan.
Therefore, one type of ‘‘standard
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charge’’ is the gross rate or charge found
in the hospital chargemaster (which
aligns with the PRM1’s definition of
‘‘charges’’) while another ‘‘standard
charge’’ is the charge or rate that the
hospital has negotiated with a third
party payer for an item or service.
When hospitals contract with a third
party payer to be included in the plan’s
network, the hospital and insurer agree
to specific, often discounted, prices that
will apply to items or services furnished
by the hospital. Best practice according
to healthcare financial management
experts and revenue cycle managers
dictates that these payer-specific
negotiated charges should be included
in hospital contracts and listed in
associated rate sheets (also called rate
tables or fee schedules). Rate sheets
include a list of all hospital items and
services for which the hospital and
payer have established regular rates (for
example, the payer-specific negotiated
charges that apply to hospital items and
services). Hospitals also routinely keep
and maintain such rate sheets to police
and validate their reimbursements from
payers as part of their revenue
management cycle, holding payers
accountable for the rates they have
negotiated with the hospital. Such rates
tables are also used by hospitals to
compare against benchmarks (such as
Medicare FFS rates) to determine where
it is advantageous to renegotiate for
higher amounts at the next opportunity.
The contracted rate, sometimes called
the ‘‘negotiated rate,’’ ‘‘in-network
amount,’’ ‘‘allowed charges’’ or
‘‘negotiated discount’’ can be
significantly lower than what the
hospital would charge an individual
who did not have an insurance
company negotiating discounts on his or
her behalf, and this contracted rate is
reflected in the patient’s EOB after the
healthcare service has been provided.
As such, we do not believe the term
‘‘payer-specific negotiated charges’’
conflicts with any particular defined
industry term or with the term
‘‘charges’’ as defined by Medicare. We
further clarify that the payer-specific
negotiated charge is the charge the
hospital has negotiated with a third
party for an item or service and does not
refer to the amount the hospital is
ultimately paid by the insurer or patient
for an item or service. We believe that
it is unlikely such amounts could be
considered hospital standard charges
and that it would prove very difficult for
a hospital to make such amounts public
in advance, given that, as commenters
point out, the actual paid amounts are
dependent on information that the
hospital does not have without
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contacting the insurer to determine the
specifics of the patient’s obligations
under the patient’s contract with the
insurer.
We note that the payer-specific
negotiated charge for a DRG is the rate
the hospital has negotiated for the DRG
as a service package. We clarify that the
requirement to make public the payerspecific negotiated charge for a DRG
would mean the base rate that is
negotiated by the hospital with the third
party payer, and not the adjusted or
final payment received by the hospital
for a packaged service.
Comment: In response to CMS’
request for comment on the potential
unintended consequences of releasing
payer-specific charge information, many
commenters asserted such disclosure
would be confusing or even harmful to
patients. For example, many
commenters raised patient-specific
concerns that the policy would impact
patients negatively by creating reliance
on published rates when they could
potentially be required to pay a higher
out-of-pocket amount after the service,
or could impact their health by
confusing them or causing them to seek
out cheaper care rather than the most
effective or best quality care. One
commenter expressed concern that
display of payer-specific negotiated
charges would shift the burden of
understanding the costs of care from the
hospitals/payers to consumers.
Response: We thank the commenters
for their input. We continue to believe
that the public posting of hospital
standard charge information will be
beneficial to healthcare consumers who
need to obtain items and services from
a hospital, healthcare consumers who
wish to view hospital prices prior to
selecting a hospital, clinicians who use
the data at the point of care when
making referrals, and other members of
the public who may develop consumerfriendly price transparency tools. This
belief is supported by the many
commenters who asserted the desire to
have better access to, and understanding
of, hospital charges. While we cannot
discount the possibility that some
consumers may find required hospital
data disclosures confusing, we believe
that the vast majority will find the
increased availability of data, especially
as it may be reformatted in consumerfriendly price transparency tools,
overwhelmingly beneficial.
Additionally as noted in section II.D.1
of this final rule, patients already
receive this information in the form of
EOBs, so we do not believe that advance
notice of such standard charges would
cause confusion beyond the confusion
and frustration that currently exists for
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lack of such knowledge as expressed by
commenters who feel they are ‘‘flying
blind.’’ We also note that nothing in this
final rule would prevent a hospital from
engaging in patient education or
otherwise assisting patients in
understanding potential hospital
charges in advance of receiving a
hospital service, including articulating
factors that may influence ultimate
patient out-of-pocket costs or displaying
quality information along with hospital
charge information.
Moreover, we strongly disagree that
the display of payer-specific negotiated
charges would effect some shift from
hospitals/payers to consumers of the
burden of understanding the costs of
care, and we pointedly note that
research,95 vast amounts of media
reports,96 as well as many commenters
to the CY 2020 OPPS/ASC proposed
rule make clear that consumers already
bear, and are exceptionally frustrated at
the lack of publicly available data to
help ease, that burden. We believe that
requiring disclosure of hospital standard
charges is a necessary first step to begin
to alleviate consumers’ frustration in
understanding their potential cost of
care in advance of the receipt of
services.
Finally, as noted by commenters,
knowing the payer-specific negotiated
charges can be highly beneficial for
consumers in HDHPs and in plans
where the consumer is responsible for a
percentage (that is, co-insurance) of the
negotiated rate. The most common
coinsurance arrangement is 20/80 where
the consumer is responsible for 20
percent of the payer-negotiated charges
and the insurer covers the remaining 80
percent. Both HDHPs and co-pays are
becoming more common 97 98 and create
a great deal of uncertainty for
consumers who can’t access the rates
hospitals and insurers have negotiated.
95 Aliferis L. Variation in Prices for Common
Medical Tests and Procedures. JAMA Intern Med.
2015; 175(1):11–12. Available at: https://
jamanetwork.com/journals/jamainternalmedicine/
article-abstract/1935935.
96 CBS News, Medical Price Roulette: CBS News
investigates the lack of transparency in America’s
health care system. September 20, 2019. Available
at: https://www.cbsnews.com/news/medical-priceroulette-cbs-news-investigates-the-lack-oftransparency-in-americas-health-care-system/.
97 Cohen RA, et al. Health Insurance Coverage:
Early Release of Estimates From the National Health
Interview Survey, January–March 2018. National
Center For Health Statistics. Available at: https://
www.cdc.gov/nchs/data/nhis/earlyrelease/
Insur201808.pdf.
98 Miller EG, et al. High-Deductible Health Plan
Enrollment Increased From 2006 To 2016,
Employer-Funded Accounts Grew In Largest Firms.
Health Affairs. August 2018. Available at: https://
www.healthaffairs.org/doi/full/10.1377/
hlthaff.2018.0188.
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Comment: Many commenters
cautioned that disclosure of payerspecific negotiated charges would
increase, not decrease, healthcare costs
in certain markets due to
anticompetitive behaviors or increases
in prices as a result of hospital
knowledge of better rates negotiated by
neighboring hospitals. Specifically,
many commenters stated that disclosure
of payer-specific negotiated charges
could encourage price fixing and
facilitate hospital collusion, causing
prices to rise and thus harming
consumers. Others raised concerns that
publicly displaying insurer contract
information would make it easier for
insurers to circumvent antitrust
safeguards, negatively affecting
competition. Several commenters also
argued that the inclusion of payerspecific negotiated charges as a standard
charge would result in adverse market
impacts on published rates and hamper
hospitals’ ability to negotiate fair and
competitive payment rates with payers.
One commenter more specifically
argued that if all payer rates are
disclosed, then every payer paying
above the lowest rate would renegotiate
to the lowest rate for every service,
leaving hospitals with very little power
to object. One commenter specifically
suggested that CMS conduct a pilot
study in only a few markets to
determine the impact of the policy on
negotiated prices before finalizing.
Response: As indicated in our
literature review and Economic
Analyses (84 FR 39630 through 84 FR
39634), we concluded that
implementing our proposals, most of
which we are finalizing in this final
rule, would yield many benefits with
particular benefits for consumers who
we believe have a right to know the cost
of hospital services before committing to
them and to be able to shop for the best
value care and for employers who
purchase healthcare for their employees.
In general, our belief that accessible
pricing information would reduce
healthcare costs by encouraging
providers to offer more competitive
rates is consistent with predictions of
standard economic theory.99 Economists
have long concluded that markets work
best when consumer prices reflect the
actual cost to create and deliver the
product.100 And a number of empirical
99 CRS Report for Congress: Does Price
Transparency Improve Market Efficiency?
Implications of Empirical Evidence in Other
Markets for the Healthcare Sector. July 24, 2007.
Available at: https://fas.org/sgp/crs/secrecy/
RL34101.pdf.
100 Murray R. Setting Hospital Rates to Control
Costs and Boost Quality: The Maryland Experience.
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studies on price transparency in other
markets shows that transparency
initiatives tend to lead to more
consistent, lower prices.101 102 However,
some economists do not believe that
healthcare price transparency will
prevent rising costs due to the unique
characteristics of the healthcare
market.103
In our discussion of available research
and market impacts (84 FR 39579
through 84 FR 39580, we took into
account the potential for unintended
consequences. Specifically, we noted
that at minimum, our policy to require
disclosure of payer-specific negotiated
charges would release data necessary to
better understand how the level of price
dispersion in various healthcare markets
impacts healthcare spending and
consumer out-of-pocket costs. As noted
in the CY 2020 OPPS/ASC proposed
rule, negotiated charges for various
procedures varies widely within and
across geographic regions on the United
States.104 Some factors associated with
the level of hospital price dispersion in
a geographic area are the hospital’s size,
healthcare demand, labor costs, and
technology, although it was the
hospital’s market power (level of
competition) that was most positively
associated with high price
dispersion.105 106 One researcher found
that variation in prices across hospital
referral regions is the primary driver of
variation in spending per enrollee for
those privately insured, while the
Health Affairs. September/October 2009; 28(5).
Available at: https://www.healthaffairs.org/doi/
10.1377/hlthaff.28.5.1395.
101 CRS Report for Congress: Does Price
Transparency Improve Market Efficiency?
Implications of Empirical Evidence in Other
Markets for the Healthcare Sector. July 24, 2007.
Available at: https://fas.org/sgp/crs/secrecy/
RL34101.pdf.
102 Kim M. The Effect of Hospital Price
Transparency in Health Care Markets. 2011.
Available at: https://repository.upenn.edu/
dissertations/AAI3475926/.
103 King JS, Muir MA, Alessi SA. Clarifying Costs
Can Increased Price Transparency Reduce
Healthcare Spending? 4 William & Mary Policy
Review 319 (2013). Available at: https://
pdfs.semanticscholar.org/f604/1a0484c65
c593525d0c07e040cf655697f2d.pdf.
104 Kennedy K, et al. Health Care Cost Institute.
Past the Price Index: Exploring Actual Prices Paid
for Specific Services by Metro Area. Healthy
Marketplace Index. April 30, 2019. Available at:
https://www.healthcostinstitute.org/blog/entry/hmi2019-service-prices.
105 Cooper Z, et al. The Price Ain’t Right?
Hospital Prices and Health Spending on the
Privately Insured. The Quarterly Journal of
Economics. December 2015. Available at: https://
pdfs.semanticscholar.org/cb9c/f90786cc39ddac6
d88f3ba1074a7c2d5f0a5.pdf.
106 Bai G and Anderson GF. Market Power: Price
Variation Among Commercial Insurers For Hospital
Services. Health Affairs. Oct 2018; 37(10): 1615–
1622. Available at: https://www.healthaffairs.org/
doi/10.1377/hlthaff.2018.0567.
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quantity of care provided across
hospital referral regions is the primary
driver of variation in spending per
beneficiary for Medicare.107 One major
barrier to fully understanding healthcare
price variation (and understanding the
impact of transparency of healthcare
pricing in general) is the lack of
availability of negotiated charges to
researchers and the public.108 We noted
that our proposals would make hospital
charge information available, which
would generate a better understanding
of (1) hospital price dispersion, and (2)
the relationship between hospital price
dispersion and healthcare spending.
Understanding these relationships
through release of pricing data could
lead to downward price pressure on
healthcare prices and reductions in
overall spending system-wide,
particularly in markets where there is
insurer and hospital competition,109 or
to considerable spending reductions and
reduction of price dispersion.110
In their comprehensive analysis of the
impact of regulations across more than
30 States requiring public access to the
prices of hospital procedures, some
researchers found that regulations
lowered the price of shoppable
procedures such as hip replacements by
approximately five percent overall
compared to prices for non-shoppable
procedures such as appendectomies.
They further found that half of the
observed price reduction in charges was
due to hospitals lowering their prices to
remain competitive. This was
particularly true for high priced
hospitals and for hospitals in
competitive urban areas.111 Research
has also indicated that price
transparency initiatives can decrease
prices paid by consumers and insurers.
One study found that following the
introduction of a State-run website
providing out-of-pocket costs for a
subset of shoppable outpatient services
reduced the charges for these
107 Cooper Z, et al. The Price Ain’t Right?
Hospital Prices and Health Spending on the
Privately Insured. The Quarterly Journal of
Economics. December 2015. Available at: https://
pdfs.semanticscholar.org/cb9c/f90786cc39ddac
6d88f3ba1074a7c2d5f0a5.pdf.
108 Ibid.
109 Ho K and Lee RS. Insurer Competition and
Negotiated Hospital Prices. August 2013. Available
at: https://pdfs.semanticscholar.org/b6e9/
11d7e171d3074b473439f93d377f4a4202bf.pdf.
110 Brown ZY. An Empirical Model of Price
Transparency and Markups in Health Care. August
2019. Available at: https://www-personal.umich.edu/
∼zachb/zbrown_empirical_model_price_
transparency.pdf.
111 Christensen HB, Floyd E, and Maffett M. ‘‘The
Effects of Price Transparency Regulation on Prices
in the Healthcare Industry.’’ Available at: https://
www.bakerinstitute.org/media/files/event/
01ce2e80/HPF-paper-AHEC-Floyd.pdf.
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procedures by approximately 5 percent
for consumers, in part by shifting
demand to lower cost providers.112 In
addition, the study found that,
following the introduction of the
website, insurers over time experienced
a 4-percent reduction in administrative
costs for imaging services.
Another possibility we considered
was that transparency in payer-specific
negotiated charges could narrow the
dispersion of prices in a market,
meaning that knowledge of payerspecific charges may not only result in
lowering prices for payers currently
paying rates above the median, but
could also increase prices for payers
that are currently paying rates below the
median. We considered whether making
payer-specific negotiated prices public
could risk disrupting the ability for
certain payers to extract aggressive
discounts in the future, especially from
providers in markets with limited
competition. For example, a hospital
providing an aggressive discount to a
particular payer may become motivated
to withdraw such discount to avoid
divulging such information to other
payers with whom they contract.
Several studies of mandated price
transparency in non-healthcare
commodity markets have shown
suppliers can use the information to
their advantage in maximizing the
prices they can charge in markets with
limited competition or where
commodities are not easily transferable
across geographies.113 We noted that
although there are no definitive
conclusions on the effects of price
transparency on markets, one study
found that it can either increase or
decrease prices depending on the
strength of the bargainers and the size
of the market.114 While price
transparency gives buyers and sellers
important information about the value
of items and services, the effect may
result in price increases by changing the
incentives for buyers and sellers may
also enable traders to observe deviations
112 Brown ZY. Equilibrium Effects of Health Care
Price Information. The Review of Economics and
Statistics. Published October 2019; 101:4, 699–712.
Available at: https://www-personal.umich.edu/
∼zachb/zbrown_eqm_effects_price_
transparency.pdf.
113 See for example, Congressional Research
Service Report for Congress: Does Price
Transparency Improve Market Efficiency?
Implications of Empirical Evidence in Other
Markets for the Health Sector. July 24, 2007.
Available at: https://fas.org/sgp/crs/secrecy/
RL34101.pdf.
114 Congressional Research Service Report for
Congress: Does Price Transparency Improve Market
Efficiency? Implications of Empirical Evidence in
Other Markets for the Health Sector. July 24, 2007.
Available at: https://fas.org/sgp/crs/secrecy/
RL34101.pdf.
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Federal Register / Vol. 84, No. 229 / Wednesday, November 27, 2019 / Rules and Regulations
from collusive practices. Allowing
weaker bargainers to see prices
negotiated by stronger bargainers will
change incentives facing buyers and
sellers, and can lead to price increases.
In the absence of a national model, we
looked to two States that previously
enacted price transparency laws,
California and New Hampshire.
California enacted a requirement for
hospitals to post their CDM in 2004, and
in 2003, New Hampshire created an allpayer claims database, later publishing
the data in 2007 in a statewide, webbased price transparency comparison
tool. Studies assessing the impact of the
New Hampshire State law have found
that the efforts focused on the wide
variation of provider prices, which in
turn created opportunities for new
benefit design that incentivized
consumer choice of lower costs
providers and sites of service.115 In
California, the link between hospital
chargemaster data and patient cost was
validated through a 10-year study of the
chargemaster data which found that
each dollar in a hospital’s list price was
associated with an additional 15 cents
in payment to a hospital for privately
insured patients (versus publicly
insured patients).116 We indicated that
this effort to improve the availability of
charge data could open up the
possibility to States to further regulate
hospital charges—examples seen in both
California and New Hampshire that took
further legislative action to reduce price
dispersion, reduce surprise billing and
to place limits on charges for the
uninsured and for out-of-network
providers.
In addition to economic effects
described above, we analyzed consumer
impact and concluded that consumers
may feel more satisfied with their care
when they are empowered to make
decisions about their treatment. A
recent survey 117 indicated a strong
desire for price transparency and
openness. Eighty-eight percent of the
population polled, demanded improved
115 Tu
H, and Gourevitch R. California HealthCare
Foundation and Robert Wood Johnson Foundation.
Moving Markets, Lessons from the New Hampshire
Price Transparency Experiment. April 2014.
Available at: https://www.chcf.org/wp-content/
uploads/2017/12/PDF-MovingMarkets
NewHampshire.pdf.
116 Batty M and Ippolito B. Mystery Of The
Chargemaster: Examining The Role Of Hospital List
Prices In What Patients Actually Pay. Health
Affairs. April, 2017; 36(4): 689–696. Available at:
https://www.healthaffairs.org/doi/10.1377/
hlthaff.2016.0986.
117 See Gruessner V. Consumer Satisfaction Dips
When Payers Lack Price Transparency. Private
Payers News (October 3, 2016). Available at: https://
healthpayerintelligence.com/news/consumersatisfaction-dips-when-payers-lack-pricetransparency.
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transparency with respect to their total
financial responsibility, including copays and deductibles. Another study
suggests that improving a patient’s
financial experience served as the
biggest area to improve overall customer
satisfaction.118 According to a 2011
GAO report, transparent healthcare
price information may help consumers
anticipate their healthcare costs, reduce
the possibility of unexpected expenses,
and make more informed choices about
their care, including for both shoppable
services as defined in this rule and other
hospital items and services in both
outpatient and inpatient settings.119
A large part of the literature on
consumer use of price information
comes from studies of price
transparency tools, particularly those
offered by third party payers and for
shoppable services. Some studies of
consumer use of price information
through web-based tools, such as those
offered by self-insured employers or
plans, indicate that they may help
consumers save money on shoppable
services. One study examined consumer
use of an employer-sponsored, private
price transparency tool and its impact
on claims payments for three common
medical services: Laboratory tests;
advanced imaging services; and
clinician office visits.120 That study
found that those who used the tool had
lower claims payments by
approximately 14 percent for laboratory
tests; 13 percent for advanced imaging
services; and approximately 1 percent
for office visits compared to those who
did not use the tool. Another study
found that those employed by a large
corporation who used a healthcare price
transparency tool were able to reduce
their costs by 10 to 17 percent compared
to nonusers.121 Those using the tool
mainly searched for information on
shoppable services and also tended to
have more limited insurance coverage.
However, one study of the use of price
transparency tools by consumers with
118 Experian Health, Improve the healthcare
financial journey. Patient Engagement (June 21,
2018). Available at: https://www.experian.com/
blogs/healthcare/2018/06/healthcare-financialjourney/.
119 Government Accountability Office. September
2011. Health Care Price Transparency: Meaningful
Price Information Is Difficult for Consumers to
Obtain Prior to Receiving Care. Available at: https://
www.gao.gov/assets/590/585400.pdf.
120 Whaley C, et al. ‘‘Association Between
Availability of Health Service Prices and Payments
for These Services.’’ JAMA. 2014; 312(16):1670–
1676. Available at https://jamanetwork.com/
journals/jama/fullarticle/1917438.
121 Lieber EMJ. ‘‘Does It Pay to Know Prices in
Health Care?’’ American Economic Journal. 2017,
9(1): 154–179. Available at: https://
pubs.aeaweb.org/doi/pdfplus/10.1257/
pol.20150124.
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65549
an employer-based, high deductible
health plan found that consumers’ likely
perception that higher price is a proxy
for higher quality care may lead them to
select higher-cost options.122 This study
found a spending drop between 11.8
and 13.8 percent occurring across the
spectrum of healthcare service
categories at the health plan level; the
majority of spending reductions were
due to consumer quantity reductions
across a broad range of services,
including both high and low value care.
Another study of the use of price
transparency tools by consumers found
that only 10 percent of consumers who
were offered a tool with price
information utilized it, and that there
was a slight relative increase in their
out-of-pocket health spending on
outpatient services compared to the
patient group that was not offered the
tool.123
Although we are not requiring that
hospitals develop a price comparison
tool, we encourage innovation in this
area by making standard charges
available in a machine-readable format
to third-party tool developers as well as
the general public. We continue to
believe that the use of a third-party tool
would enhance public access to pricing
data, but we do not believe the absence
of one would cause confusion among
consumers on how to use the available
standard charge data made public by the
hospital because we are also proposing
requirements for hospitals to make
public their payer-specific charges for a
set of shoppable services in a consumerfriendly manner. A large part of
consumer buy-in and understanding
may depend on providers’ willingness
and ability to make public, and to have
conversations with consumers about,
their standard charge data to allow for
price comparison and decisions about
upcoming medical treatment. As
consumers’ healthcare costs continue to
rise, clinicians are in a unique position
to discuss the financial impacts of
healthcare decisions with their patients.
One study found that patients will often
choose services based on clinician
referral rather than consideration of
122 Brot-Goldberg ZC, et al. What Does a
Deductible Do? The Impact of Cost-Sharing on
Health Care Prices, Quantities, and Spending
Dynamics. Cambridge, MA: National Bureau of
Economic Research; Working Paper, October 2015.
Available at: https://www.nber.org/papers/
w21632.pdf.
123 Desai S, et al. Association between availability
of a price transparency tool and outpatient
spending. JAMA. 2016;315(17):1874–1881.
doi:10.1001/jama.2016.4288. Available at: https://
jamanetwork.com/journals/jama/fullarticle/
2518264.
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Federal Register / Vol. 84, No. 229 / Wednesday, November 27, 2019 / Rules and Regulations
cost.124 We believe that the pricing
information made available as a result of
this final rule will help ensure that
clinicians have relevant pricing data to
counsel patients on financial options. A
systematic review found that clinicians
and their patients believe
communication about healthcare costs
is important and that they have the
potential to influence health and
financial outcomes, but that discussions
between clinicians and patients about
costs are not common,125 even though a
majority of patients and physicians
express a desire to have such cost-ofcare conversations.126 In our review, we
found evidence that physicians were
open to having these conversations, and
that they were occurring more
frequently, but providers have also
identified the need for price information
as a barrier to discussing costs with
patients.127 128 In addition, a literature
review of 18 studies measuring the
effects of charge display on cost and
practice patterns found that having
prospective access to prices for
radiology and laboratory services
changed physician’s ordering behavior,
and in 7 of the 9 studies on cost
reported statistically significant cost
reduction when charges were
displayed.129
Employers can also benefit from
transparency in provider pricing and
disclosure of payer-specific negotiated
charges in particular. Some employers
are seeking and implementing
innovative ways using transparency in
healthcare pricing to reduce healthcare
costs and are using healthcare pricing
124 Chernew M, et al. ‘‘Are Health Care Services
Shoppable? Evidence from the Consumption of
Lower-Limb MRI Scans.’’ National Bureau of
Economic Research, Working Paper No. 24869.
Issued July 2018, revised January 2019. Available
at: https://www.nber.org/papers/w24869.
125 Meluch AL, and Oglesby WH. (2015).
Physician-patient communication regarding
patients’ healthcare costs in the US: A systematic
review of the literature. Journal of Communication
in Healthcare, 8(2), 151–160. Available at: https://
www.tandfonline.com/doi/full/10.1179/
1753807615Y.0000000010?scroll=top&needAccess=
true.
126 University of Utah: The State of Value in U.S.
Healthcare. Available at: https://uofuhealth.
utah.edu/value/.
127 Schiavoni KH, et al. How Primary Care
Physicians Integrate Price Information into Clinical
Decision-Making, J Gen Intern Medicine. 2017
January; 32(1): 81–87. Available at: https://
www.ncbi.nlm.nih.gov/pmc/articles/PMC5215149/.
128 Alexander GC, et al. Barriers to Patientphysician Communication About Out-of-pocket
Costs, J Gen Intern Med. 2004 August; 19(8): 856–
860. Available at: https://www.ncbi.nlm.nih.gov/
pmc/articles/PMC1492500/.
129 Goetz C, et al. The effect of charge display on
cost of care and physician practice behaviors: a
systematic review, Journal Gen Intern Med. 2015
Jun; 30(6):835–42. Available at: https://
www.ncbi.nlm.nih.gov/pubmed/25691240.
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information effectively to do so.130
Some employers, particularly selfinsured employers, are using knowledge
of payer-specific negotiated charges in
their discussions with providers and
health plans to drive referrals to high
value care settings which is driving
down the cost of healthcare for both
employer and employee. For example,
self-insured employers in Indiana are
effectively using knowledge of hospital
charges to improve contracting with
providers.131 132 Additionally, based on
our review of economics research, we
believe the healthcare market will
become more effective and efficient as a
result of transparency in healthcare
pricing. For example, one study found
that when the State of California
adopted a reference pricing model for
their employees, usage of lower priced
facilities increased by 9 to 14 percent
and facilities in California responded by
reducing their prices by 17 to 21
percent.133 The California and the New
Hampshire initiatives (described earlier)
were both demonstrated to produce
‘‘spillover’’ effects, meaning that
changing market prices as a result of
consumer shopping benefited even
those who were not actively
shopping.134
In summary, we concluded that
transparency in pricing is necessary and
can be effective to help bring down the
cost of healthcare services, reduce price
dispersion, and benefit consumers of
healthcare services, including patients
and employers. In light of this, we do
not believe additional testing needs to
be done prior to finalizing this rule. We
further note that the federal government
has laws and processes to investigate
and act when entities engage in
collusive or other anticompetitive
practices.
130 Woods L, et al. Employers are fixing health
care. Harvard Business Review. March 2019.
Available at: https://hbr.org/cover-story/2019/03/
how-employers-are-fixing-health-care.
131 Sachdev G. Using RAND 2.0 Hospital Pricing
Report to Achieve High Value. Employers’ Forum
of Indiana. July 31, 2019. Available at: https://
employersforumindiana.org/media/2019/07/UsingRAND-2.0-Hospital-Prices-to-Achieve-Valuepresented-by-Gloria-Sachdev-7-31-19.pdf.
132 Sachdev G, et al. Self-Insured Employers Are
Using Price Transparency To Improve Contracting
With Health Care Providers: The Indiana
Experience. Health Affairs. October 7, 2019.
Available at: https://www.healthaffairs.org/do/
10.1377/hblog20191003.778513/full/
133 Robinson JC and Brown TT. Increases In
Consumer Cost Sharing Redirect Patient Volumes
And Reduce Hospital Prices For Orthopedic
Surgery. Health Affairs. August 2013; 32(8).
Available at: https://www.healthaffairs.org/doi/full/
10.1377/hlthaff.2013.0188.
134 Blase B. Transparent Prices Will Help
Consumers and Employers Reduce Health
Spending. Galen Institute. September 27, 2019.
Available at: https://galen.org/assets/Blase_
Transparency_Paper_092719.pdf.
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Comment: Many commenters
indicated that it would be a challenge
and burden for hospitals to access and
display their payer-specific negotiated
charges. For example, many
commenters asserted that such
information is either ‘‘non-existent’’
(specifically that it does not exist in
hospital accounting systems) or is not
available to be reported by hospitals
without significant manual effort, while
several others indicated that consumers
should pursue information on out-ofpocket obligations from insurers as
opposed to hospitals. Several others
indicated that the data is not available
electronically and would require
manual entry or require hospitals to
purchase prohibitively expensive
software. Several commenters stated
that charges on the chargemaster are not
always associated with negotiated
charges due to billing complexities such
as per diem rates and bundled payment
arrangements and that the CY 2020
OPPS/ASC proposed rule relied on the
mistaken assumption that payer-specific
rates can be expressed in a static matrix.
One commenter explained that hospital
managed care agreements do not
typically set forth simple dollar
amounts for each service; instead, they
specify payment methodologies, which
are in essence negotiated payment
algorithms rather than static matrices.
The commenter also noted that the
appropriate payment amount for a
particular service package cannot be
calculated until the delivery of care, and
the assignment of any dollar amount
prior to the delivery of care would risk
overstating or understating the
applicable payment amount for that
case.
Response: As noted above, hospital
payer-specific negotiated charges or
rates can be found within the innetwork contracts that hospitals have
signed with third party payers. Such
contracts often include rates sheets that
contain a list of hospital items and
services (including service packages)
and the corresponding negotiated rates.
If the rate sheets are not in electronic
form, we suggest that the hospital
request an electronic copy of their
contract and corresponding rate sheet
from the third party payer. Additionally,
we note that we are concurrently issuing
a proposed rule entitled Transparency
in Coverage (file code CMS–9915–P)
that would require most issuers of
individual and group market health
insurance and group health plans to
make public, in an electronic machinereadable format, negotiated rate and
unique out-of-network allowed amount
information that hospitals, including
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CAHs, and others could use. Access to
these data may be a benefit to less
resourced hospitals which indicated
that payers may take advantage of small
hospitals that don’t diligently maintain
their contracts or contracted rates.
We agree that payer-specific
negotiated charges are not found in a
hospital’s chargemaster because such
charges are typically found in other
parts of the hospital’s billing and
accounting systems or in their payer
contracts. We also agree that such
charges are often negotiated for service
packages rather than for individualized
items and services as listed in the
hospital chargemaster, and that
negotiated contracts often include
methodologies that would apply to
payment rates, often leading to
payments to hospitals that are different
than the base rates negotiated with
insurers for hospital items and services.
However, we do not agree that these
issues represent barriers to making
public payer-specific negotiated charges
because as clarified above, the
negotiated rates we are requiring to be
made public are the base rates, not the
payment received. Additionally, we
offer suggestions for developing the
comprehensive machine-readable file in
section II.E of this final rule and the
display of payer-specific charges for the
set of shoppable services in a low-cost
consumer-friendly format in section II.F
of this final rule.
Finally, we recognize that some
hospitals may have negotiated charges
with many payers representing
hundreds of plans. We believe the
burden to hospitals for making public
all payer-specific negotiated charges is
outweighed by the public’s need for
access to such information. However,
after consideration of the comments
received, we are responding to concerns
about burden by finalizing a policy to
delay the effective date of these final
rules to January 1, 2021 (see section
II.G.3 of this final rule for more details).
We believe that by extending this final
rule effective date, hospitals will have
sufficient time to collect and display the
standard charge information as required
under this rule. Additionally, we are
finalizing a policy to regard hospitals
that offer internet-based price estimator
tools as having met the requirements for
making public their consumer-friendly
list of shoppable services (section II.F.5
of this final rule) which will relieve
some burden for hospitals that are
already displaying consumer-friendly
charge information.
Comment: Several commenters
specifically noted that although the CY
2020 OPPS/ASC proposed rule exempts
the publication of Medicaid FFS
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arrangements, payer-specific negotiated
charges would include Medicaid
managed care organizations (MCOs) and
the information published would have
little value to Medicaid beneficiaries
since their out-of-pocket obligations are
limited by federal and state cost-sharing
requirements and the information may
intimidate families from seeking
necessary care due to the confusion
caused by the charges.
Response: Under this final rule,
hospitals would be required to make
public their standard charges for payerspecific negotiated charges. As noted by
commenters and as we explained in the
proposed rule, such payer-specific
negotiated charges would not include
non-negotiated payment rates (such as
those payment rates for FFS Medicare or
Medicaid). However, hospitals will be
required to make public the payerspecific negotiated charges that they
have negotiated with third party payers,
including charges negotiated by third
party payer managed care plans such as
Medicare Advantage plans, Medicaid
MCOs, and other Medicaid managed
care plans. Based on research cited
previously, as well as patient and
patient advocate comments, we disagree
that the display of payer-specific
negotiated rates will have little value to
individuals enrolled in Medicaid MCOs
or other Medicaid managed care plans
in which third parties negotiate charges
with hospitals. We believe that all
consumers, including, for example,
beneficiaries enrolled in Medicaid
MCOs, should have the advantage of a
full line of sight into their healthcare
pricing. We are therefore finalizing as
proposed our definition of payerspecific negotiated charges which
would include Medicare and Medicaid
plans managed by third party payers
who negotiate charges with providers.
Final Action: We are finalizing as
proposed a definition of payer-specific
negotiated charge as a type of standard
charge at new 45 CFR 180.20 to mean
the charge that a hospital has negotiated
with a third party payer for an item or
service. We are also finalizing as
proposed a definition of ‘‘third party
payer’’ for purposes of section 2718(e) of
the PHS Act as an entity that, by statute,
contract, or agreement, is legally
responsible for payment of a claim for
a healthcare item or service.
4. Alternative Definitions for Types of
Standard Charges That We Considered
In addition to the two types of
standard charges (gross charges and
payer-specific negotiated charges) that
we proposed and are finalizing for
purposes of section 2718(e) of the PHS
Act, we sought public comment on
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whether we should instead, or
additionally, require the disclosure of
other types of charges as standard
charges. We considered several
alternatives for types of standard
charges related to groups of individuals
with third party payer coverage and also
for types of standard charges that could
be useful to groups of individuals who
are self-pay.
a. Volume-Driven Negotiated Charge
As a variant of the definition of the
‘‘payer-specific negotiated charge,’’ we
considered defining a type of ‘‘standard
charge’’ based on the volume of patients
to whom the hospital applies the
standard charge. Specifically, we
considered defining a type of ‘‘standard
charge’’ as the ‘‘modal negotiated
charge.’’ The mode of a distribution
represents the number that occurs most
frequently in a set of numbers. Here, we
considered defining ‘‘modal negotiated
charge’’ as the most frequently charged
rate across all rates the hospital has
negotiated with third party payers for an
item or service. We indicated that we
believed that this definition could
provide a useful and reasonable proxy
for payer-specific negotiated charges
and decrease burden for the amount of
data the hospital would have to make
public and display in a consumerfriendly format. We sought public
comment on whether the modal
negotiated charge would be as
informative to consumers with
insurance and whether it should be
required as an alternative or in addition
to the payer-specific negotiated charges.
Comment: A few commenters
supported volume-driven negotiated
charges, such as the modal-negotiated
charge, or a similar variation of such a
charge based on volume, as a type of
standard charge, stating that hospitals
should publish chargemaster and
negotiated amounts based on the billing
volume. One commenter noted that
developing and communicating a
volume-driven average charge could be
challenging, given that hospitals and
insurers often negotiate charges for nonstandardized bundled services and
service packages. A few commenters
disagreed with further defining
negotiated charges based on volume,
stating that they believe the information
would be both incorrect and confusing
to consumers and onerous for hospitals
required to report the information.
Additionally, one commenter strongly
objected to use of a volume-driven
charge, stating that they believe such an
alternative standard charge would
perpetuate the idea that insurers have
been able to drive prices lower based on
volume-driven negotiations.
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Response: After consideration of the
comments received, we agree with the
commenters who stated that volumedriven charge information could be
confusing to consumers, and we believe
it is less useful than the types of
standard charges we are finalizing.
Because the modal negotiated rate, or
similar volume-driven variations, would
combine rates the hospital has
negotiated with all third party payers for
all items or services and weigh that
number based on the volume of patients
(a number unknown to the public), we
agree it could be misleading for
consumers who are trying to combine
the volume-driven rate with their
specific benefit information to
determine their potential out-of-pocket
obligations in advance, as it does not
represent what their specific payer has
negotiated. This type of standard charge
may have utility in certain
circumstances, however, after
consideration of the public comments
we received, we are not defining ‘‘modal
negotiated charges’’ as a type of volumedriven ‘‘standard charge’’ at this time.
b. All Allowed Charges
We also considered defining a type of
‘‘standard charge’’ as the charges for all
items and services for all third party
payer plans and products, including
charges that are non-negotiated (such as
FFS Medicare rates), which we would
call ‘‘all allowed charges.’’ As we
explained in the CY 2020 OPPS/ASC
proposed rule, this option would have
required hospitals to provide the
broadest set of charge information for all
individuals with health insurance
coverage because it would have the
advantage of including all identified
third party payer charges (including
third party payer rates that are not
negotiated). Additionally, every
consumer would have access to charge
information specific to his or her
insurance plan. We considered, but did
not propose, this alternative because we
stated we believed consumers with nonnegotiated healthcare coverage already
have adequate and centralized access to
non-negotiated charges for hospital
items and services and are largely
protected from out-of-pocket costs
which may make them less sensitive to
price shopping. However, we sought
public comment on whether increasing
the data hospital would be required to
make public would pose a burden,
particularly for smaller or rural
hospitals that may not keep such data
electronically available.
Comment: We received a few
comments related to all allowed
charges. One commenter supported the
inclusion of the ‘‘Medicare allowable’’
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charge in particular as a type of
standard charge in order to provide a
meaningful benchmark using existing
data. One commenter objected to
including all allowed charges as a type
of standard charges due to their belief
that consumers whose insurance plans
are non-negotiated already have access
to the information that would be
required.
Response: We agree with commenters
who indicated there is no need to
include all allowed charges because the
allowed amounts of plans that are not
negotiated (for example, FFS Medicare
and Medicaid) are already publicly
disclosed. Moreover, such publicly
disclosed allowed amounts make a
benchmark available to those who wish
to use it; nothing in this final rule
would prevent a hospital or third party
payer from displaying a Medicare FFS
rate as a benchmark. However, we
believe it would be redundant to require
hospitals to re-disclose already public
rates and create an unnecessary burden.
After consideration of the public
comments we received, we are not
finalizing a requirement for hospitals to
re-disclose ‘‘all allowed charges’’ at this
time.
c. Definition of Discounted Cash Price
as a Type of ‘‘Standard Charge’’
As discussed in the CY 2020 OPPS/
ASC proposed rule (84 FR 39577
through 39579), hospital gross charge
information may be most directly
relevant to a group of self-pay
consumers who do not have third party
payer insurance coverage or who seek
care out-of-network. Such consumers
would not need information in addition
to hospital gross charges in order to
determine their potential out-of-pocket
cost obligations because the gross charge
would represent the totality of their outof-pocket cost estimate. However,
stakeholders have indicated that
hospitals often offer discounts off the
gross charge or make other concessions
to individuals who are self-pay. Thus,
we considered defining a type of
‘‘standard charge’’ as the ‘‘discounted
cash price,’’ defined as the price the
hospital would charge individuals who
pay cash (or cash equivalent) for an
individual item or service or service
package. We considered this alternative
definition because there are many
consumers who pay in cash (or cash
equivalent) for hospital items and
services.
As we explained in the CY 2020
OPPS/ASC proposed rule, the first
subgroup of self-pay consumers that we
believed could benefit from knowing the
discount cash price would be those who
are uninsured. The number of
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uninsured individuals in the United
States rose to 27.4 million in 2017.135
These individuals’ need for hospital
price transparency differs from patients
with insurance who generally are
otherwise shielded from the full cost of
hospitalization and hospital items and
services. Uninsured individuals do not
have the advantage of having access to
a discounted group rate that has been
negotiated by a third party payer.
Therefore, individuals without
insurance may face higher out-of-pocket
costs for healthcare services.
The second subgroup of self-pay
consumers we indicated may benefit
from knowing the discounted cash price
are those who may have some
healthcare coverage but who still bear
the full cost of at least certain healthcare
services. For example, these may be
individuals who: Have insurance but
who go out of network; have exceeded
their insurance coverage limits; have
high deductible plans but have not yet
met their deductible; prefer to pay
through a health savings account or
similar vehicle; or seek non-covered
and/or elective items or services. We
noted that many hospitals offer
discounts to these groups of individuals,
either as a flat percentage discount off
the chargemaster rate or at the insurer’s
negotiated rate, while some hospitals
offer consumers a cash discount if they
pay in full on the day of the service.136
Other hospitals have developed and
offer standardized cash prices for
service packages for certain segments of
the population that traditionally pay in
cash for healthcare services.137 We
recognized that currently, it is difficult
for most consumers to determine in
advance of receiving a service what
discount(s) the hospital may offer an
individual because cash and financial
need discounts and policies can vary
widely among hospitals.
We therefore specifically considered
an option that would require hospitals
to make public the cash discount that
would apply for shoppable services and
service packages that would include all
ancillary services, similar to our
proposals for consumer-friendly display
135 Kaiser Family Foundation. The Number of
Uninsured People Rose in 2017, Reversing Some of
the Coverage Gains Under the Affordable Care Act.
December 2018. Available at: https://www.kff.org/
uninsured/press-release/the-number-of-uninsuredpeople-rose-in-2017-reversing-some-of-thecoverage-gains-under-the-affordable-care-act/.
136 Beck M. How to Cut Your Health-Care Bill:
Pay Cash. The Wall Street Journal. February 15,
2016. Available at: https://www.wsj.com/articles/
how-to-cut-your-health-care-bill-pay-cash1455592277.
137 Hempstead K and White C. Plain Talk about
Price Transparency. Health Affairs. March 25, 2019.
Available at: https://www.healthaffairs.org/do/
10.1377/hblog20190319.99794/full/.
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of payer-specific negotiated charges (84
FR 39585 through 39591). In this case,
the discounted cash price would
represent the amount a hospital would
accept as payment in full for the
shoppable service package from an
individual. Such charges could be lower
than the rate the hospital negotiates
with third party payers because it would
not require many of the administrative
functions that exist for hospitals to seek
payment from third party payers (for
example, prior authorization and billing
functions). However, we recognized that
many hospitals have not determined or
maintain, a standard cash discount that
would apply uniformly to all self-pay
consumers for each of the items and
services provided by the hospital or for
service packages, unlike they do for
negotiated charges. We sought comment
on this option, specifically, how many
shoppable services for which it would
be reasonable to require hospitals to
develop and maintain, and make public
a discounted cash price.
In addition, in the CY 2020 OPPS/
ASC proposed rule we noted that many
hospitals offer cash discounts on a
sliding scale according to financial
need. In such instances, we
acknowledged that it may be difficult
for a hospital to establish and make
public a single standardized cash rate
for such groups of consumers. For this
reason, we also considered a different
definition that would take sliding scale
cash discounts into account by defining
a standard charge as the median cash
price. The median cash price would be
the midpoint of all cash discounts
offered to consumers, including prices
for self-pay patients and those
qualifying for financial assistance. We
indicated that for uninsured patients
who may qualify for financial
assistance, the value of making a
median cash price public could raise
awareness of their available options,
including the ability to apply for
financial assistance, however, we also
stated that we believed such a rate
would be less useful to the public than
a single standard cash price that the
hospital would accept as payment in
full as discussed above.
Comment: Many commenters,
including individual consumers, patient
advocates, clinicians, and insurers,
strongly supported including a
definition of standard charges to reflect
the discounted cash price that would be
offered to a self-pay consumer because
they believe this information would be
beneficial and relevant to consumers,
including consumers with third party
payer coverage. A few commenters
suggested that CMS redefine this type of
‘‘standard charge’’ as hospital walk-in
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rates, meaning the rates a hospital will
typically charge to a patient without
insurance, and one commenter
suggested that hospitals post the
‘‘Amounts Generally Billed,’’ an IRSdefined term for the maximum amount
individuals under a hospital’s financial
assistance plan would pay.
By contrast, several commenters,
mostly hospital representatives,
disagreed with defining standard
charges as the discounted cash price
due to their belief that the cash price is
often reflective of after-the-fact charity
discounts due to the patient’s inability
to pay or as a result of lack of insurance.
One commenter disagreed with defining
a cash rate as a type of standard charge
because they believe CMS cannot
require or force hospitals to have
discounted cash prices, and therefore
cannot require their disclosure.
Response: We thank the commenters
for their strong support and their input
on the utility of the discounted cash
price for all consumers. We considered
this alternative definition because there
are many consumers who may wish to
pay in cash (or cash equivalent) for
hospital items and services, whether
insured or uninsured, for a variety of
reasons. We agree with commenters
who indicated that the discounted cash
price is important for many self-pay
consumers. Many hospitals have already
developed and offer standardized cash
prices for service packages for certain
segments of the population who
traditionally pay in cash for healthcare
services and who pay cash (or cash
equivalent) in advance of receiving a
healthcare service.138 Such prices and
services are typically offered as a
consumer-friendly packaged service that
negates the need for hospitals to expend
administrative time and resources
billing third party payers and
resubmitting charges when payment is
denied.139 Moreover, we agree with
commenters who indicated that up-front
knowledge of pricing can increase
patient satisfaction and reduce bad debt
and could help mitigate ‘‘surprise
billing.’’
As discussed in the CY 2020 OPPS/
ASC proposed rule, we made a
distinction between the discounted cash
price (the price a hospital agrees to
accept from a self-pay consumer as
payment in full) versus a median cash
138 Hempstead K and White C. Plain Talk about
Price Transparency. Health Affairs. March 25, 2019.
Available at: https://www.healthaffairs.org/do/
10.1377/hblog20190319.99794/full/.
139 Bai G, et al. Providing Useful Hospital Pricing
Information To Patients: Lessons From Voluntary
Price Disclosure. Health Affairs. April 2019.
Available at: https://www.healthaffairs.org/do/
10.1377/hblog20190416.853636/full/.
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price that would take into account any
and all cash prices accepted by
hospitals, including cash payments
accepted following sliding scale
discounts as a result of charity care. We
clarify that the ‘‘discounted cash price’’
would reflect the discounted rate
published by the hospital, unrelated to
any charity care or bill forgiveness that
a hospital may choose or be required to
apply to a particular individual’s bill.
Thus, the discounted cash price is a
standard charge offered by the hospital
to a group of individuals who are selfpay. The discounted cash price may be
generally analogous to the ‘‘walk-in’’
rate referred to by commenters,
however, we do not want to take a
position as to whether it is the same as
the cash discount price because the cash
discounted price would apply to all selfpay individuals, regardless of insurance
status.
We are therefore finalizing a
definition of discounted cash price as a
type of standard charge. We note that
we agree with commenters who indicate
that some hospitals may not have
determined a discounted cash price for
self-pay consumers. For some hospitals,
the cash price is the undiscounted gross
charges as reflected in the hospital
chargemaster as previously discussed.
In that case, under our definition of
discounted cash price, the hospital’s
discounted cash price would simply be
its gross charges as reflected in the
chargemaster.
Final Action: We are finalizing the
definition of discounted cash price that
we discussed in the CY 2020 OPPS/ASC
proposed rule. Specifically, we are
finalizing a definition of cash
discounted price to mean the charge
that applies to an individual who pays
cash (or cash equivalent) for a hospital
item or service. Hospitals that do not
offer self-pay discounts may display the
hospital’s undiscounted gross charges as
found in the hospital chargemaster. We
are finalizing this definition at 45 CFR
180.20.
d. Definitions of ‘‘De-Identified
Minimum Negotiated Charge’’ and ‘‘DeIdentified Maximum Negotiated
Charge’’ as Two Types of Standard
Charges
In the CY 2020 OPPS/ASC proposed
rule, we also considered defining a type
of ‘‘standard charge’’ as the deidentified minimum, median, and
maximum negotiated charge. Under this
definition, the hospital would be
required to make public the lowest,
median, and highest charges of the
distribution of all negotiated charges
across all third party payer plans and
products. We indicated that this
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information could provide healthcare
consumers with an estimate of what a
hospital may charge, because it conveys
the range of charges negotiated by all
third party payers. We also indicated
that as a replacement for the payerspecific negotiated charge, this
definition had the advantage of lowering
reporting burden and could relieve
some concerns by stakeholders related
to the potential for increased healthcare
costs in some markets as a result of the
disclosure of third party payer
negotiated charges. At the time, we did
not propose to define the de-identified
minimum, median, and maximum
negotiated charges as types of standard
charges because we believed the payerspecific negotiated charges would
provide much more useful and specific
information for consumers. However,
we sought comment on this issue as an
alternative type of standard charge.
Comment: Many commenters
supported a definition of standard
charges to require hospitals to post a deidentified range of negotiated rates,
including the minimum, median, and
maximum negotiated rates or allinclusive range, quartiles or a median
range (that is, the 25th and 75th
percentile or the 25th through the 75th
percentiles), another specific percentile
within the range of negotiated charges,
‘‘usual and customary’’ (which are
based on a regional percentile), or
average rate. Commenters supported
these alternatives in addition to payerspecific negotiated charges because they
believe de-identified negotiated rate
information would be relevant and
beneficial to consumers. Commenters
noted that many consumer-facing price
transparency tools display the minimum
and maximum negotiated charges for
healthcare services already, or display
regional average charges. One
commenter stated that providing such
alternative charges in addition to
providing the payer-specific negotiated
charges can be helpful as it provides a
‘‘meaningful anchor’’ for the patient
when they are comparing options. Other
commenters echoed this sentiment,
indicating that such charges, in addition
to payer-specific negotiated charges, are
useful for consumers such as patients
and employers.
Several commenters indicated they
believed these types of standard charges
could provide a suitable substitute for
the payer-specific negotiated charges. A
few commenters indicated that the
substitution could protect the
identification of individual payers in
smaller markets which they said would
reduce any legal or market risk that
could be associated with compelling the
release of negotiated rates, although one
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commenter expressed concern that
display of a de-identified maximum
may have an adverse effect on the
ability to negotiate lower rates. By
contrast, patient advocates and
consumers strongly opposed the
substitution of any type of de-identified
negotiated charge, stating such charges
would provide a far less accurate
indicator of a patient’s potential
financial obligations compared to
knowledge of the consumer’s own
payer-specific negotiated charges. For
example, one commenter said that
substitution for payer-specific
negotiated charges for a more general or
informational charge may leave patients
feeling misled and delays the country
from moving closer to a patient-focused
system. Another indicated that limiting
standard charge information to a median
or range would reduce utility of the
information and serve to frustrate
innovators who seek to provide
consumers with an unbiased view of
provider cost and quality.
Several commenters specifically
indicated that a range (for example, the
minimum and maximum negotiated
charges) of de-identified charges would
be useful to the public because it would
make it easier for consumers to quickly
understand the range of prices across all
insurance plans that might apply. One
commenter noted that requiring
hospitals to make public a range instead
of all payer-specific negotiated charges
would not likely reduce burden.
Additionally, a few commenters
recommended the use of regional or
market averages or median rates, or the
‘‘usual and customary’’ which stated
that displaying a market (not hospital)
median, or the ‘‘usual and customary’’
which is defined by the National
Council of Insurance Legislators (NCIL)
as the 80th percentile of physician
charges in a geographic region based on
an independent unbiased benchmarking
charge database. One commenter noted
that such rates would serve as a basic
benchmark for vendors and prevent the
prices paid by insurers from being
known.
A few commenters, however,
disagreed with defining a standard
charge based on the hospital’s
minimum, median, and maximum
negotiated rate (or a variation of these)
due to their belief that this data would
be of limited value or not be beneficial
to consumers and may cause confusion.
One commenter specifically requested
that the median cash price not be
finalized as a type of standard charge.
Response: We thank commenters for
their support and innovative
suggestions on variations of the
potential definition of a type of
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‘‘standard charge’’ as the de-identified
minimum, median, and maximum
negotiated charge. We agree with
commenters that information related to
several types of de-identified negotiated
rates could be useful and beneficial to
consumers in conjunction with payerspecific negotiated charges, together as
a range, or as separate types of standard
charges.
First, we agree with commenters who
suggested that the de-identified
minimum negotiated charge and the deidentified maximum negotiated charge
could each provide a benchmark for
determining the value of a hospital item
or service for referring providers or
employers. For example, for a consumer
with insurance who is obligated to pay
a percentage of the negotiated charge,
knowing the maximum would be more
helpful and informative than not having
any reference point at all and would
relieve consumers of the fear and
uncertainty due to the lack of
knowledge. Disclosure of the minimum
de-identified negotiated charge by itself
could also provide a benchmark that
could have an impact on market forces,
as some commenters suggested.
Therefore, we believe that each value,
independent of the other, could be
helpful in providing some standard
hospital charge information to
consumers.
We further agree with commenters
who asserted that knowing both the
minimum and the maximum (that is, the
range) of negotiated rates could benefit
consumers. As noted by commenters,
many consumer facing pricing tools
make use of ranges in their displays. For
example, consumers without third party
payer coverage could use the range to
negotiate a charge with the hospital that
is more reasonable than the gross
charges a hospital might otherwise bill
them. The range would also be useful
for consumers with insurance, for
example, someone obligated to pay a
percentage of the negotiated rate would
be able to determine both their
minimum and maximum financial
obligation for an item or service to
compare across hospital settings.
Finally, however, we agree with
commenters who indicated that the
most beneficial hospital standard charge
information for consumers (including
patients and employers) would include
requiring disclosure of payer-specific
negotiated charges along with disclosure
of the de-identified minimum
negotiated charges and de-identified
maximum negotiated charges. We agree
with commenters who indicated that
this set of information, taken together,
can provide consumers with an even
more complete picture of hospital
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standard charges and drive value. For
example, by knowing one’s payerspecific negotiated charges in addition
to the minimum and maximum
negotiated charges for a hospital item or
service, consumers with third party
payer coverage could determine
whether their insurer has negotiated
well on their behalf by assessing where
their payer-specific negotiated charge
falls along the range. Such information
would serve to promote value choices in
obtaining a healthcare services, and may
also promote value choices in obtaining
a healthcare insurance product.
Additionally, we agree with
commenters that presenting such
information aligns with current
consumer-friendly tools and displays
and supports innovation.
We are therefore finalizing with
modification to define a fourth type of
standard charge as the ‘‘de-identified
minimum negotiated charge’’ to mean
the lowest charge that a hospital has
negotiated with all third party payers for
an item or service. We are also finalizing
with modification to define a fifth type
of standard charge as the ‘‘de-identified
maximum negotiated charge’’ to mean
the highest charge that a hospital has
negotiated with all third party payers for
an item or service. To identify the
minimum negotiated charge and the
maximum negotiated charge, the
hospital considers the distribution of all
negotiated charges across all third party
payer plans and products for each
hospital item or service. We note that
this distribution would not include nonnegotiated charges with third party
payers. The hospital must then select
and display the lowest and highest deidentified negotiated charge for each
item or service the hospital provides.
We appreciate the many additional
innovative suggestions for how a range
of de-identified negotiated charges
could be displayed by a hospital. We
note that we have interpreted section
2718(e) of the PHS Act to require each
hospital to disclose its own standard
charges, and not the charges that are
standard in a particular region or market
as some commenters suggested.
However, if commenters believe such
data to be valuable, nothing would
prevent hospitals or other users of the
information to include such ranges
when presenting it to consumers.
Final Action: We are therefore
finalizing with modification to define a
fourth and fifth type of standard charge
as the ‘‘de-identified minimum
negotiated charge’’ to mean the lowest
charge that a hospital has negotiated
with all third party payers for an item
or service. We are also finalizing with
modification to define a fifth type of
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standard charge as the ‘‘de-identified
maximum negotiated charge’’ to mean
the highest charge that a hospital has
negotiated with all third party payers for
an item or service. In response to
comments and in the interest of
minimizing hospital burden, we are not
finalizing the inclusion of the median
negotiated charge as a type of standard
charge. We are finalizing these
definitions at 45 CFR 180.20. As
discussed above, we believe these
additional types of standard charges
could be useful and beneficial to
consumers.
We intend for the de-identified
minimum negotiated charge and deidentified maximum negotiated charge
to be severable, one from the other, and
from payer-specific negotiated charge,
such that each of these three types of
standard charges could stand-alone as a
type of standard charge.
We believe it is reasonable to consider
the de-identified minimum negotiated
charge and the de-identified maximum
negotiated charge as severable from
payer-specific negotiated charge because
these values represent the lowest or
highest charge (along a distribution) that
a hospital has negotiated across all third
party payers for an item or service, and
do not identify the third party payer
with which these rates are negotiated.
We also believe these types of standard
charges are severable from each other
because the de-identified minimum
negotiated charge and the de-identified
maximum negotiated charge are
separate values in the distribution.
Further, we believe it is feasible for
hospitals to separately identify each
type of ‘‘standard charge’’, which
according to the definition we are
finalizing in 45 CFR 180.20 includes:
Gross charge, payer-specific negotiated
charge, de-identified minimum
negotiated charge, de-identified
maximum negotiated charge, and
discounted cash price. As discussed
elsewhere in section II.D of this final
rule, we believe each type of standard
charge is a reasonable, and necessary
aspect of hospital price transparency, to
ensure consumers have as complete
information as possible to inform their
healthcare decision-making. We
therefore believe that all five charges
(gross charge, payer-specific negotiated
charge, de-identified minimum
negotiated, charge, de-identified
maximum negotiated charge, and
discounted cash price) provide value to
consumers for the reasons discussed in
this section. Accordingly, we intended
for all five definitions to be severable,
such that if a court were to invalidate
the inclusion of an individual
definition, the remaining definitions
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65555
would remain defined as types of
standard charges.
We believe, when made public in
combination (according to the
requirements we are finalizing), these
types of standard charges will be most
effective in achieving meaningful
transparency in prices of hospital items
and services. We also recognize that
each type of standard charge alone, if
made public nationwide, could also
further hospital price transparency in
the United States.
E. Requirements for Public Disclosure of
All Hospital Standard Charges for All
Items and Services in a Comprehensive
Machine-Readable File
1. Overview
Section 2718(e) of the PHS Act
requires hospitals to make their
standard charges public in accordance
with guidelines developed by the
Secretary. Therefore, we proposed that
hospitals make public their standard
charges in two ways: (1) A
comprehensive machine-readable file
that makes public all standard charge
information for all hospital items and
services (84 FR 39581 through 39585),
and (2) a consumer-friendly display of
common ‘‘shoppable’’ services derived
from the machine-readable file (84 FR
39585 through 39591). In the CY 2020
OPPS/ASC proposed rule, we explained
our belief that these two different
methods of making hospital standard
charges public are necessary to ensure
that such data is available to consumers
where and when it is needed (for
example, via integration into price
transparency tools, electronic health
records (EHRs), and consumer apps),
and also directly available and useful to
consumers that search for hospitalspecific charge information without use
of a developed price transparency tool.
For purposes of displaying all
standard charges for all items and
services in a comprehensive machinereadable file, we proposed requirements
for the file format, the content of the
data in the file, and how to ensure the
public could easily access and find the
file. We agree with commenters who
indicate that the machine-readable file
would contain a large amount of data,
however, we believe that a single data
file would be highly useable by the
public because all the data would be in
one place. By ensuring accessibility to
all hospital standard charge data for all
items and services, these data will be
available for use by the public in price
transparency tools, to be integrated into
EHRs for purposes of clinical decisionmaking and referrals, or to be used by
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researchers and policy officials to help
bring more value to healthcare.
Comment: A few commenters
(particularly hospitals) noted concerns
that the chargemaster data they already
make public online appears to be
accessed less by consumers and more by
insurance brokers, competitors, and
reporters. Additionally, many
commenters believed that the proposed
data to be made public would be too
complex, voluminous, and time
consuming for consumers to navigate
and understand. Specifically,
commenters expressed concern that:
The data files would be comprised of
thousands of lines of data that
consumers would have to sift through;
the volume of files could crash personal
computers; the information could add to
confusion for consumer who may not
understand a chargemaster, coding, or
the differences between ancillary
services, gross charges, and payerspecific negotiated charges; providing
large and complex datasets (even if
standardized) would not achieve CMS’s
stated goal of transparency; and
consumers may not be able to derive
actual costs from standard charge
information. Some commenters
indicated that the machine-readable file
should be made consumer-friendly and
searchable.
Response: We believe that requiring
hospitals to make public all standard
charges for all items and services they
provide is consistent with the mandate
of section 2718(e) of the PHS Act. We
agree with commenters who indicate
that the machine-readable file would
contain a large amount of data, however,
we believe that a single data file would
be highly useable by the public because
all the data would be in one place. By
ensuring accessibility to all hospital
standard charge data for all items and
services, these data will be available for
use by the public in price transparency
tools, to be integrated into EHRs for
purposes of clinical decision-making
and referrals, or to be used by
researchers and policy officials to help
bring more value to healthcare. In order
to ensure hospital standard charge data
is more directly useful to the average
patient, we proposed and are finalizing
an additional requirement for hospitals
to make a public standard charges for a
set of shoppable services in a consumerfriendly manner (see section II.F of this
final rule). We believe the shorter data
set presented in a consumer-friendly
manner is more likely to be directly
useful to consumers who seek to
compare costs for common shoppable
services hospital-by-hospital.
We note that many machine-readable
data sets that are made available for
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public use can be quite large. For
example, Medicare Provider Utilization
and Payment Data files include
information for common inpatient and
outpatient services, all physician and
other supplier procedures and services,
and all Part D prescriptions.140 These
files are freely available to the public
and contain hundreds of thousands of
data points in .xlsx and .csv format. We
therefore believe it is possible for
hospitals to make public all their
standard charges for all the items and
services they provided in a similar
manner. Additionally, we have not
heard that large Medicare data files of
data derived from claims causes any
confusion for healthcare consumers, and
healthcare consumers do not typically
use the information in the data files
directly. Instead, voluminous Medicare
data is used by a variety of stakeholders,
some of whom take the information and
present it to users in a consumerfriendly manner.141 Similarly, we do not
believe that making public a
comprehensive machine-readable file
with all standard charges for all items
and services would create patient
confusion. Finally, we note that by
definition, machine-readable files are
searchable.
2. Standardized Data Elements for the
Comprehensive Machine-Readable File
In the CY 2020 OPPS/ASC proposed
rule (84 FR 39582 through 39583), we
proposed that hospitals disclose their
list of standard charges for all items and
services online in a single digital file
that is machine-readable. Without
specifying a minimum reporting
standard for the machine-readable file,
the standard charges data made publicly
available by each hospital could vary,
making it difficult for the users of the
data to compare items and services. For
example, some hospitals currently post
a single column of gross charges without
any associations to CPT or HCPCS codes
or other identifying descriptions of the
items and services to which the gross
charge applies. A similar example
would be a hospital that displays a list
of gross charges that is correlated with
a list of item numbers that are
meaningful to the hospital billing
personnel, but not understandable to the
general public. By contrast, some
hospitals list their gross charges along
with a brief description of the item or
140 CMS.gov website, Medicare Provider
Utilization and Payment Data. Available at: https://
www.cms.gov/Research-Statistics-Data-andSystems/Statistics-Trends-and-Reports/MedicareProvider-Charge-Data/.
141 Wei S, et al. Surgeon Scorecard. ProPublica.
Updated July 15, 2015. Available at: https://
projects.propublica.org/surgeons/.
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service to which each gross charge
applies and the corresponding
standardized identifying codes
(typically HCPCS or CPT codes).
We expressed our concern that the
lack of uniformity leaves the public
unable to meaningfully use, understand,
and compare standard charge
information across hospitals. Therefore,
for the comprehensive machinereadable file of all standard charges for
all items and services, we made
proposals to ensure uniformity of the
data made publicly available by each
hospital. To inform these proposals, we
considered the data elements that are
typically included in a hospital’s billing
system and which of those elements
would result in hospital standard charge
data being most transparent,
identifiable, meaningful, and
comparable. Specifically, we proposed
that the list of hospital items and
services include the following
corresponding information, as
applicable, for each item and service:
• Description of each item or service
(including both individual items and
services and service packages).
• The corresponding gross charge that
applies to each individual item or
service when provided in, as applicable,
the hospital inpatient setting and
outpatient department setting.
• The corresponding payer-specific
negotiated charge that applies to each
item or service (including charges for
both individual items and services as
well as service packages) when
provided in, as applicable, the hospital
inpatient setting and outpatient
department setting. Each list of payerspecific charges must be clearly
associated with the name of the third
party payer.
• Any code used by the hospital for
purposes of accounting or billing for the
item or service, including, but not
limited to, the CPT code, HCPCS code,
DRG, NDC, or other common payer
identifier.
• Revenue code, as applicable.
We proposed to codify these
requirements at proposed new 45 CFR
180.50(b). We stated that we believe that
these elements would be necessary to
ensure that the public would be able to
compare standard charges for the same
or similar items and services provided
by different hospitals.
We proposed that hospitals associate
each standard charge with a CPT or
HCPCS code, DRG, NDC, or other
common payer identifier, as applicable,
because hospitals uniformly understand
them and commonly use them for
billing items and services (including
both individual items and services and
service packages). We also proposed
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that hospitals include item descriptions
for each item or service. In the case of
items and services that are associated
with common billing codes (such as
HCPCS codes), the hospital could use
the code’s associated short text
description.
In addition, based on stakeholder
feedback suggesting hospital charge
information should include revenue
codes to be comparable, we proposed to
require that the hospital include a
revenue code where applicable and
appropriate. Hospitals use revenue
codes to associate items and services to
various hospital departments. When a
hospital charges differently for the same
item or service in a different
department, we proposed that the
hospital associate the charge with the
department represented by the revenue
code, providing the public some
additional detail about the charges they
may expect for hospital services
provided in different hospital
departments.
In developing this proposal, we also
considered whether the following data
elements, which are commonly
included in hospital billing systems,
might be useful to the public:
• Numeric designation for hospital
department.
• General ledger number for
accounting purposes.
• Long text description.
• Other identifying elements.
However, we determined that, for
various reasons, these data elements
may not be as useful as the data
elements that we proposed to require
hospitals to make public. For example,
data elements such as general ledger
numbers are generally relevant to the
hospital for accounting purposes but
may not add value for the public, while
data elements such as alternative code
sets (such as International Statistical
Classification of Diseases and Related
Health Problems, 10th revision (ICD–10)
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codes) or long text descriptions
associated with CPT codes, while
useful, might be difficult to associate
with a single item or service or be
otherwise difficult to display in a file
that is intended mainly for further
computer processing. Because of this,
we stated that while long text
descriptions might benefit healthcare
consumers and be appropriate for the
consumer-friendly display of shoppable
services (as discussed in the CY 2020
OPPS/ASC proposed rule, 84 FR 39585
through 39591), we believe they may
add unnecessary burden for hospitals
when such descriptions are not readily
electronically available, or when the
display of such data is not easily
formatted into a machine-readable file.
Therefore, we did not propose to require
these additional elements for the
machine-readable data file that contains
a list of all standard charges for all
hospital items and services. We invited
public comment on the proposed data
elements for the comprehensive
machine-readable file of all standard
charges for all items and services that
hospitals would be required to make
public. We also sought public comment
on the other data elements that, as we
detail above, we considered but did not
propose to require, and on any other
standard charge data elements that CMS
should consider requiring hospitals to
make public.
Comment: A few commenters sought
clarification on how to make public
charges for various hospital items and
services. For example, one commenter
stated that gross charges are not
established for several codes using
surgical procedure codes, but rather are
listed as unit of time. Others pointed out
that charges for hospitals and
physicians may be maintained
separately, with some indicating that
employed physician charges are not
included in their hospital chargemaster.
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65557
Response: In its comprehensive
machine-readable file, the hospital must
include all standard charges for all
items and services for which it has
established a charge, which includes
time-based gross charges. For items and
services and associated gross charges
found in the hospital chargemaster, the
hospital could list, for example, the
gross charge associated with supplies or
amount charges per unit of time. An
example of how a hospital could list its
time-based gross charges for various
items and services can be viewed in
Table 1.
We understand that some hospitals
may have several locations operating
under a consolidated hospital license,
and each location may have its own
chargemaster. Some hospitals may have
a chargemaster for hospital items and
services (for example, supplies,
procedures, or room and board charges)
and one for hospital services provided
by employed professionals, although
more often all gross charges for all items
and services provided by the hospital
(including services of employed
practitioners) are kept in a single
hospital chargemaster. Moreover, we
agree with commenters that often the
charges for employed practitioners are
not associated with specific CPT/HCPCS
codes until after a service has been
provided to a patient. However, the
gross charge for the employed
professional would still be present in
the chargemaster. The last several rows
of Table 1 illustrates one way a hospital
could incorporate standard charges for
professional services into their
comprehensive machine-readable file.
Additionally, we note that gross charges
for some supplies, such as gauze pads,
found in the hospital chargemaster may
not have a corresponding common
billing code. Therefore, we clarify that
that common billing codes as a required
data element be included as applicable.
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TABLE 1—SAMPLE DISPLAY OF GROSS CHARGES 142
Hospital XYZ Medical Center
Prices Posted and Effective [month/day/year]
Notes: [insert any clarifying notes]
Description
CPT/HCPCS
code
NDC
OP/Default
gross charge
IP/ER
gross charge
HB IV INFUS HYDRATION 31–60 MIN ..............................
HB IV INFUSION HYDRATION ADDL HR .........................
HB IV INFUSION THERAPY 1ST HR ................................
HB ROOM CHARGE 1:5 SEMI PRIV .................................
HB ROOM CHG 1:5 OB PRIV DELX .................................
HB ROOM CHG 1:5 OB DELX 1 ROOM ...........................
HB ROOM CHG 1:5 OB DELX 2 ROOMS .........................
SURG LEVEL 1 1ST HR 04 ...............................................
SURG LEVEL 1 ADDL 30M 04 ..........................................
SURG LEVEL 2 1ST HR 04 ...............................................
PROMETHAZINE 50 MG PR SUPP ...................................
PHENYLEPHRINE HCL 10% OP DROP ...........................
MULTIVITAMIN PO TABS ..................................................
DIABETIC MGMT PROG, F/UP VISIT TO MD ..................
GENETIC COUNSEL 15 MINS ...........................................
DIALYSIS TRAINING/COMPLETE .....................................
ANESTH, PROCEDURE ON MOUTH ................................
96360 .............
96361 .............
96365 .............
........................
........................
........................
........................
Z7506 .............
Z7508 .............
Z7506 .............
J8498 .............
........................
........................
S9141 ............
S0265 ............
90989 .............
170 .................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
00713013212
17478020605
10135011501
........................
........................
........................
........................
$1,000.13
251.13
1,061.85
........................
........................
........................
........................
........................
........................
........................
251.13
926.40
0.00
185.00
94.00
988.00
87.00
$1,394.45
383.97
1,681.80
2,534.00
2,534.00
2,534.00
2,534.00
3,497.16
1,325.20
6,994.32
383.97
1,264.33
0.00
........................
........................
........................
........................
Comment: One commenter provided a
chart as an example of how to disclose
price transparency information broken
down by Medicare, Medicaid,
commercial non-contracted in-network
and commercial non-contracted out-ofnetwork providers. Another commenter
recommended that any publiclyavailable report of hospital negotiated
prices be preceded by efforts to create
standardized data definitions and
formats across hospitals and ensure
alignment with insurer reporting
standards, which is critical to achieving
consumer-friendly, useful, ‘‘apples-toapples’’ information.
Response: We appreciate these
comments and agree that
standardization is important to ensure
that hospital charge information can be
compared across and between hospitals.
Based on a review of state requirements
and a sampling of hospitals that are
currently making their charges public,
we chose the specific data elements we
are finalizing, which are included in
hospital billing and accounting systems,
as the ones that would result in hospital
standard charge data being transparent,
identifiable, meaningful, and
comparable. For example, we believe
that the billing codes present a common
data element that provides an adequate
142 Note that this example shows only one type
of standard charge (specifically the gross charges)
that a hospital would be required to make public
in the comprehensive machine-readable file.
Hospitals must also make public the payer-specific
negotiated charges, the de-identified minimum
negotiated charges, the de-identified maximum
negotiated charges, and the discounted cash prices
for all items and services.
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cross-walk between hospitals for their
items and services. Such codes serve as
a common language between providers
and payers to describe the medical,
surgical and diagnostic services
provided by the healthcare community.
We agree that defining elements in a
data dictionary or more specificity in
data file formats could make it easier for
IT personnel to use hospital charge data
and will take it under consideration for
future rulemaking.
For reasons we discussed earlier in
section II.D.3. of this final rule, data on
FFS Medicare and Medicaid is not
included as a type of standard charge
and would not be required to be
included in the comprehensive
machine-readable file. Because such
data is publicly available, however, it
could readily be included by a hospital
that so chooses, or it could be added by
those who use the hospital standard
charge information. We further agree
that additional data related to
commercial non-contracted in-network
and commercial non-contracted out-ofnetwork providers could be useful for
consumers and note that we are
concurrently publishing a price
transparency proposed rule entitled
Transparency in Coverage (file code
CMS–9915–P) focused on disclosure of
negotiated rates and unique out-ofnetwork allowed amounts from most
individual and group market health
insurance issuers and group health
plans. We believe that by doing so we
are aligning expectations and incentives
across the healthcare system and
helping to ensure alignment with
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ERx Charge
quantity
12 Each.
5 mL.
100 Each.
reporting standards applicable to issuers
and group health plans.
Comment: A few commenters
expressed concern that this proposal
falls short of achieving its goal of
informing patients about the cost of care
in a meaningful way to choose among
hospital providers. One commenter
asserted that even when hospitals use
the same or similar terminology to
describe specific services, some services
can be very specific in ways that
patients may not understand and
associated out-of-pocket costs can vary
a great deal, and that unless patients are
familiar with coding and standard
descriptors, it is likely that many will
compare cost estimates for services that
are substantially different from what
they will receive. Several commenters
asserted that hospitals do not have
adequate, timely health plan
information related to patient benefit
plans, bundled payments, and
adjudication rules to provide patients
with accurate out-of-pocket cost
estimates prior to services. One
commenter expressed concern with the
ability for an accurate estimate to be
‘‘published in a file’’ due to the myriad
ways that payers structure and
adjudicate providers’ claims. The
commenter noted that third-party payers
have processing systems that determine
‘‘allowables’’, adjustments, payments,
patient responsibility, etc., and that
address unique plan design constructs
(at the employer’s discretion) based on
each unique contract. Another
commenter asserted that there is
significant complexity in negotiated
contracts and many other nuances in
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contract arrangements that would means
that each hospital would need to
provide data on literally thousands of
service bundle combinations.
Response: We are clarifying the
requirements for making public all
standard charges for all items and
services in a comprehensive machinereadable file and have included an
example of the format and structure the
list of gross charges could take (see
Table 1). We agree that standardization
in some form is important to ensure
high utility for users of the hospital
standard charge information, and we
have proposed and are finalizing certain
requirements (such as the data elements
and file formats) that would be
standardized across hospitals. We
decline at this time to be more
prescriptive in our approach; however,
we may revisit these requirements in
future rulemaking should we find it is
necessary to make improvements in the
display and accessibility of hospital
standard charge information for the
public. Regarding the display of payerspecific negotiated charges, we
recommend hospitals consult their rate
sheets or rate tables within which the
payer-specific negotiated charges are
often found. Such rate sheets typically
contain a list of common billing codes
for items and services provided by the
hospital along with the associated
payer-specific negotiated charge or rate.
We believe it is possible to make this
information public in a single
comprehensive machine-readable file
by, for example, using multiple tabs in
an XML format. For example, one tab
could show a list of individualized
items and services and associated gross
charges derived from the hospital’s
chargemaster while another tab could
display the individualized items and
services and service packages for a
specific payer’s plan based on the rate
sheet derived from the hospital’s
contract with the payer. We also note
that service packages can often be
associated with a common billing code
such as a DRG or APC or other payer
modifier that is identified on the rate
sheet. We clarify that for service
packages, we do not intend each and
every individual item or service within
the service package to be separately
listed. For example, if a hospital has a
payer-specific negotiated charge (base
charge) for a DRG code, the hospital
would list that payer-specific negotiated
charge and associated DRG code as a
single line-item on its machine-readable
file.
Further, as described in more detail in
section II.D.1 of this final rule, we
disagree with commenters who
indicated that standard charges are
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meaningless to consumers. We agree,
however, that for insured patients, the
payer-specific negotiated charge does
not in isolation provide a patient with
an individualized out-of-pocket
estimate. Because the additional details
of a consumer’s benefit structure (for
example, the copay or deductible) are
not standard charges maintained by
hospitals, we did not propose that
hospitals would be required to make
these data elements public. However, as
we explained, the hospital standard
charges, specifically, the gross charge
and the payer-specific negotiated
charges, are critical data points found
on patient EOBs which are designed to
communicate provider charges and
resulting patient cost obligations, taking
third party payer insurance into
account. When a patient has access to
payer-specific negotiated charge
information prior to obtaining a
healthcare service (instead of sometimes
weeks or months after the fact when the
EOB arrives), combined with additional
information the patient can get from
payers, it can help the individual
determine his or her potential out-ofpocket information for a hospital item or
service in advance. As previously noted,
we agree with commenters who indicate
that the machine-readable file would
contain a large amount of data, however,
we believe that a single data file would
be highly useable by the public because
all the data would be in one place. By
ensuring accessibility to all hospital
standard charge data for all items and
services, these data will be available for
use by the public in price transparency
tools, to be integrated into EHRs for
purposes of clinical decision-making
and referrals, or to be used by
researchers and policy officials to help
bring more value to healthcare.
Comment: One commenter suggested
that the machine-readable file include
the ‘‘claim allowable,’’ which is
comprised of the sum of the co-pay,
coinsurance, deductible and health
insurance company payment. A few
commenters indicated CPT codes and
ICD procedure codes should be
included to facilitate apples-to-apples
comparisons and ensure so inpatient
facilities do not have a way to extend
charges to cash-pay patients and inflate
patient charges.
Response: We thank the commenters
for their input. We believe the ‘‘claim
allowable’’ referred to by the commenter
is analogous to the payer-specific
negotiated charge, which is the rate
negotiated by hospitals that includes
both the payer and patient portion. In
other words, as explained in section
II.D.3 of this final rule, the payerspecific negotiated charge is the
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discounted rate that the hospital has
negotiated with the third party payer
and is typically displayed as the second
charge listed on the patient’s EOB. As
expressed by commenters, additional
information from the payer is necessary
to determine how the ‘‘negotiated rate’’
or ‘‘allowed amount’’ is apportioned
between the payer and the patient. As
explained in the CY 2020 OPPS/ASC
proposed rule, we do not believe that
ICD procedure codes should be
included because, while useful, such
information might be difficult to
associate with a single item or service or
be otherwise difficult to display in a file
that is intended mainly for further
computer processing. In summary, we
believe the proposed data elements
represent the necessary elements
(standard charges, service description,
and code) to ensure hospital charge
information is relevant to consumers,
usable, and comparable, so we are
finalizing as proposed.
Comment: Several commenters stated
that there can be multiple revenue codes
for a single service, leading to consumer
confusion and repetitive information.
One commenter recommended that
CMS eliminate revenue code as a
standardized data element because some
procedures have the same charge, but
the revenue code differs.
Response: We believe the revenue
code is an important data element for
the reasons described in the CY 2020
OPPS/ASC proposed rule, but we are
sympathetic to commenters who
indicated that including such a code
may exponentially increase the number
of fields in the comprehensive machinereadable file and make the file difficult
to manage. We believe the commenter
indicated this because the revenue
center code is specific to each hospital
department which may offer the same or
similar items and services to other
hospital departments. If a hospital were
to list out each item or service provided
in each revenue center separately, the
list of items and services could be
replicated many times over. We are
therefore not finalizing this data
element as a requirement, but continue
to encourage its inclusion and use by
hospitals where appropriate to improve
the public’s understanding of hospital
standard charges. For example, if an
item or service has a different charge
when provided in a different revenue
center (that is, department), the hospital
could list just that one item twice—once
for the revenue center that has the
different standard charge and once for
the standard charge that applies to all
other revenue centers.
Comment: Several commenters
suggested alternatives to the standard
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data elements for reporting all items and
services. For example, some suggested
including ICD–10 procedure codes, one
suggested posting separate charges for
administrative cost of government and
insurance regulations, and another
suggested hospitals make public the
costs related to cost-shifting and
uncompensated care, the availability of
providers, whether the provider takes
all forms of payment. One commenter
suggested leveraging a group of various
stakeholders to develop and validate
these standards. One commenter also
suggested that a healthcare consumer
should have the right to view a line
itemized medical bill before and after
the time of service, which would
contain the full name (no abbreviations)
of each medical test as spelled out in the
AMA CPT manual for which a medical
provider wants paid accompanied by
the five (5) digit CPT billing code as per
the AMA CPT manual. Two commenters
asserted that failure to provide an easy
to understand fee schedule in advance,
combined with hospitals failure to
provide an itemized bill, results in the
unfair and unethical practice known as
surprise medical billing.
Response: We appreciate the
commenters’ alternative suggestions and
interest in reducing the risk of surprise
billing by providing consumers with an
advance itemized bill of each medical
service. We note that this final rule
would not constrain hospitals from
providing an itemized bill in advance,
ICD–10 codes, or other information that
consumers may find helpful to
understand the cost of their care. At this
time, however, we believe that the
common data requirements we are
finalizing provide sufficient information
for consumers to compare hospital
standard charges.
Final Action: We are finalizing with
modifications our proposals for
common data elements that must be
included in the comprehensive
machine-readable file that contains all
standard charges for all items and
services provided by the hospital.
Specifically, we are finalizing a
requirement that the machine-readable
list of hospital items and services
include the following corresponding
information, as applicable, for each item
and service:
• Description of each item or service
(including both individual items and
services and service packages).
• The corresponding gross charge that
applies to each individual item or
service when provided in, as applicable,
the hospital inpatient setting and
outpatient department setting.
• The corresponding payer-specific
negotiated charge that applies to each
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item or service (including charges for
both individual items and services as
well as service packages) when
provided in, as applicable, the hospital
inpatient setting and outpatient
department setting. Each payer-specific
negotiated charge must be clearly
associated with the name of the third
party payer and plan.
• The corresponding de-identified
minimum negotiated charge that applies
to each item or service (including
charges for both individual items and
services as well as service packages)
when provided in, as applicable, the
hospital inpatient setting and outpatient
department setting.
• The corresponding de-identified
maximum negotiated charge that applies
to each item or service (including
charges for both individual items and
services as well as service packages)
when provided in, as applicable, the
hospital inpatient setting and outpatient
department setting.
• The corresponding discounted cash
price that applies to each item or service
(including charges for both individual
items and services as well as service
packages) when provided in, as
applicable, the hospital inpatient setting
and outpatient department setting.
• Any code used by the hospital for
purposes of accounting or billing for the
item or service, including, but not
limited to, the CPT code, HCPCS code,
DRG, NDC, or other common payer
identifier.
We are codifying these requirements
at new 45 CFR 180.50(b). We believe
that these elements are necessary to
ensure that the public can compare
standard charges for similar or the same
items and services provided by different
hospitals. We are not finalizing the
revenue center code as a required data
element, but we continue to encourage
its inclusion and use by hospitals where
appropriate to improve the public’s
understanding of hospital standard
charges.
3. Machine-Readable File Format
Requirements
To make public their standard charges
for all hospital items and services, we
proposed to require that hospitals post
the charge information in a single digital
file in a machine-readable format. We
proposed to define a machine-readable
format as a digital representation of data
or information in a file that can be
imported or read into a computer
system for further processing. Examples
of machine-readable formats include,
but are not limited to, .XML, .JSON and
.CSV formats. A Portable Document
Format (PDF) would not meet this
definition because the data contained
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within the PDF file cannot be easily
extracted without further processing or
formatting. We proposed to codify these
format requirements at proposed new 45
CFR 180.50(c) and the definition of
machine-readable at proposed new 45
CFR 180.20. We explained our belief
that making public such data in a
machine-readable format would pose
little burden on hospitals because many,
if not all, hospitals already keep these
data in electronic format in their
accounting systems for purposes of, for
example, ensuring accurate billing.
However, we sought comment on this
assumption and the burden associated
with transferring hospital charge data
into a machine-readable format.
As an alternative, we considered
proposing to require that hospitals post
their list of all standard charges for all
items and services using a single
standardized file format, specifically
.XML only, because this format is
generally easily downloadable and
readable for many healthcare
consumers, and it could simplify the
ability of price transparency tool
developers to access the data. However,
we did not want to be overly
prescriptive in our requirements for
formatting. We sought public comments
on whether we should require that
hospitals use a specific machinereadable format, and if so, which
format(s). Specifically, we sought public
comment on whether we should require
hospitals to make all standard charge
data for all items and services available
as an .XML file only.
In addition, we considered formats
that could allow direct public access to
hospital standard charge information
and we sought public comment from all
stakeholders, particularly hospitals and
innovative IT vendors, regarding such
technologies or standards that could
facilitate public access to real-time
updates in a format to make it easier for
information to be available when and
where consumers want to use it. We
specifically sought public comment on
adopting a requirement that hospitals
make public their standard charges
through an open standards-based
Application Programming Interface
(API) (sometimes referred to as an
‘‘open’’ API) through which they would
disclose the standard charges and
associated data elements discussed in
section XVI.E.2 of the CY 2020 OPPS/
ASC proposed rule (84 FR 39582
through 39583). We also sought public
comment on the additional burden that
may be associated with a requirement
that hospitals make public their
standard charges through a standardsbased API.
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Comment: Several commenters
supported the use of API-based methods
to access pricing information, noting
that APIs are largely efficient and not
burdensome to implement. A few
commenters believed this would also
encourage the development of an
innovative health ecosystem that would
facilitate the most user-friendly
interface for consuming and presenting
the information to patients. A few
commenters supported the development
of industry-wide API standard or
requiring a standards-based API, which
would leverage widely-recognized,
national standards. One commenter
suggested that CMS require all
stakeholders in the healthcare industry
to adopt standardized data exchange
methods for pricing information to
allow the primary care or other referring
physician to be able to have the price
conversation with the patient as
decisions are made. Another commenter
urged the use of APIs to be able to
export a complete health record with
both price and clinical information. One
commenter recommended that CMS use
consensus-based data standards for the
posting of machine-readable files, as
stated in the June 24, 2019 Executive
Order on Improving Price and Quality
Transparency in American Healthcare to
Put Patients First.
Response: We appreciate comments
on this issue. We believe that
standardizing exchange of hospital
standard charge and other data is an
important goal, but we believe that
finalizing our requirement that hospitals
make their standard charge information
available to the public online in a
machine-readable format is a good
initial step. We continue to work on
policies designed to advance the use of
APIs to support interoperability in
collaboration with other federal
partners, such as the Office of the
National Coordinator (ONC). As hospital
disclosure of standard charges matures,
and Fast Healthcare Interoperability
Resources (FHIR) or other consensusbased standards for data pricing
endpoints develop, we may revisit the
issue and consider proposing in future
rulemaking approaches using API or
other technology.
Final Action: We are finalizing as
proposed the requirement that hospitals
post their standard charge information
in a single digital file in a machinereadable format. We are finalizing our
definition of machine-readable format as
a digital representation of data or
information in a file that can be
imported or read into a computer
system for further processing. Examples
of machine-readable formats include,
but are not limited to, .XML, .JSON and
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65561
.CSV formats. A PDF would not meet
this definition because the data
contained within the PDF file cannot be
easily extracted without further
processing or formatting. We are
finalizing these format requirements at
new 45 CFR 180.50(c) and the definition
of machine-readable at new 45 CFR
180.20.
page; 146 (2) ‘‘easily accessible’’ would
mean that standard charge data are
presented in a single machine-readable
file that is searchable and that the
standard charges file posted on a
website can be accessed with the fewest
number of clicks; 147 and (3) ‘‘without
barriers’’ would mean the data can be
accessed free of charge, users would not
have to input information (such as their
4. Location and Accessibility
name, email address, or other personally
Requirements for the Comprehensive
identifying information (PII)) or register
Machine-Readable File
to access or use the standard charge data
file. We proposed to codify this
In the CY 2020 OPPS/ASC proposed
requirement at proposed new 45 CFR
rule, we explained that we reviewed
180.50(d).
how hospitals are currently
We encouraged hospitals to review
implementing our updated guidelines,
the HHS Web Standards and Usability
which took effect on January 1, 2019,
Guidelines (available at: https://
and we expressed concern that some
webstandards.hhs.gov/), which are
charge information made public by
hospitals may be difficult for the public research-based and are intended to
to locate. For example, information may provide best practices over a broad
range of web design and digital
be difficult to locate if the public is
communications issues.
required to click down several levels in
We also requested public comments
order to find the information. We also
on an alternative we considered, which
expressed our concern about barriers
would have required hospitals to submit
that could inhibit the public’s ability to
access the information once located. For a link to the standard charges file to a
CMS-specified central website, or
example, we indicated that we were
submit a link to the standard charge file
aware that some hospitals require
to CMS that would be made public on
consumers to set up a username and
a CMS web page. Such a method could
password, or require consumers to
have allowed the public to access
submit various types of other
standard charge information for their
information, including, but not limited
purposes in one centralized location.
to, their email address, in order to
We stated that we believed this could
access the data. We expressed concern
reduce potential confusion about where
that these requirements might deter the
to find standard charge information and
public from accessing hospital charge
potentially allow standard charge
information.
information to be posted alongside CMS
Accordingly, we proposed that a
hospital quality information. It could
hospital would have discretion to
also assist in the assessment of hospital
choose the internet location it uses to
compliance with section 2718(e) of the
post its file containing the list of
PHS Act. In spite of these possible
standard charges so long as the
benefits, we did not propose to require
comprehensive machine-readable file is
hospitals to submit or upload a link to
displayed on a publicly-available web
their standard charge information to a
page, it is displayed prominently and
CMS-specified centralized website
clearly identifies the hospital location
because we believed such an effort
with which the standard charges
could be unnecessarily duplicative of
information is associated, and the
ongoing State and private sector efforts
standard charge data are easily
to centralize hospital pricing
accessible, without barriers, and the
information and potentially confuse
data can be digitally searched. For
consumers who may reasonably look to
purposes of these proposed
a hospital website directly for charge
requirements: (1) ‘‘displayed
information. However, we stated that
prominently’’ would mean that the
because we appreciate the advantages of
143
value and purpose of the web page
having all data available through a
and its content 144 is clearly
single site, we considered this
communicated, there is no reliance on
alternative and sought public
breadcrumbs 145 to help with navigation,
comments. We sought comment on this
and the link to the standard charge file
alternative option, specifically, whether
is visually distinguished on the web
the burden outweighs the advantages.
Finally, we sought public comments
143 https://webstandards.hhs.gov/guidelines/49.
on
potential additional requirements,
144 Nielsen J. (2003, November 9). The ten most
including easily-searchable file naming
violated homepage design guidelines. Alertbox.
Available at: https://www.useit.com/alertbox/
20031110.html.
145 https://webstandards.hhs.gov/guidelines/78.
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146 https://webstandards.hhs.gov/guidelines/88.
147 https://webstandards.hhs.gov/guidelines/181.
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conventions and whether we should
specify the website location for posting
rather than our proposed requirement
that would permit hospitals some
flexibility in choosing an appropriate
website. Current instances of machinereadable charge files posted on hospital
websites contain variable file types, file
names, and locations on each website.
Standardizing file name or website
location information could provide
consumers with a standard pathway to
find the information and would provide
uniformity, making it easier for
potential software to review information
on each website. Specific requirements
for file naming conventions and
locations for posting on websites could
also facilitate the monitoring and
enforcement of the requirement.
Therefore, we sought public comments
on whether we should propose to adopt
these additional requirements or other
requirements related to these issues.
Comment: A few commenters
supported the development and use
centralized price transparency websites.
For example, two commenters noted
that the use of a centralized posting
repository would aid in monitoring to
ensure hospital compliance. One
commenter agreed that the information
should be required to be placed in a
standardized location, such as a
standardized ‘‘pricing’’ uniform
resource locator (URL), expressing a
belief that it would go a long way
toward simplifying the presently timeconsuming and confusing process when
attempting to comparison shop for
healthcare. The commenter indicated
that, when combined with the machinereadability requirements, such a
standardized location would enable a
wide variety of benchmarking and
comparison-shopping services that are
not possible today. One commenter
supported the alternative concept for
centralizing the standard charge data
from each hospital into a CMS website
to which hospitals would link from
their respective websites, and quality
data would be posted alongside the
charge information. Another commenter
did not support a central location that
would contain all the links, expressing
a belief that the requirement to make the
charge information ‘‘displayed
prominently’’ on the hospitals website
would be sufficient. A few commenters
suggested that CMS host a centralized
list of machine-readable pricing
websites and recommended that these
websites be incorporated into the
existing CMS National Plan and
Provider Enumeration System (NPPES).
Another commenter suggested that CMS
launch and maintain a centralized data
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portal, similar to CMS’ Hospital
Compare website, with tightly defined
file constructs in order to ensure the
submission of consistent information by
providers so that comparisons could be
made. A few commenters suggested that
CMS leverage existing price
transparency efforts by states, including
requirements to report pricing
information or publish instructions on
hospital websites to facilitate consumer
access to pricing information. One
commenter noted that states with
APCDs and price transparency websites
centralize and compare costs/prices and
other attributes across providers and
payers, providing a platform for
disseminating standardized information.
The commenter suggested that CMS
leverage this experience, invest in
interoperability, and advance this work
across states to support consumers.
Several commenters suggested
alternative approaches to enable public
access to price transparency
information. One commenter
recommended the development of a
transparency website that incorporates a
radius-distance search tool to view and
compare hospital charges. The
commenters noted that CMS shares the
contents of the NPPES database on a
regular basis as public use files due to
the inevitability of FOIA requests. A few
commenters supported the use of an
independent third-party online
database, with one commenter noting
that this approach would not increase
burden on hospitals or clinicians, in
alignment with CMS’ stated policy
goals.
Response: We appreciate the many
suggestions from stakeholders related to
ensuring public access to hospital
standard charge information. We agree
with stakeholders that centralizing the
standard charges information disclosed
by hospitals could have many
advantages for finding the files and for
monitoring to ensure compliance. We
decline to finalize such a policy at this
time, however, we will continue to
consider a requirement for hospitals to
submit to CMS their files, or a link to
where such files may be located on the
internet, for future rulemaking. We
agree with commenters that a naming
convention could assist in locating
hospital charge data files and are
therefore finalizing a requirement that
hospitals use a CMS-specified naming
convention, which, as discussed in the
CY 2020 OPPS/ASC proposed rule, we
believe will help stakeholders more
easily locate the comprehensive
machine-readable file that contains all
hospital standard charge information.
We are finalizing the following naming
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convention that must be used for the
file: <ein>_<hospital-name>_
standardcharges.[json|xml|csv] in which
the EIN is the Employer Identification
Number of the hospital, followed by the
hospital name, followed by
‘‘standardcharges’’ followed by the
hospital’s chosen file format.
CMS thanks the commenters for their
input on the use of APCDs. We note that
this rule does not require hospitals to
contribute data to an APCD, but
recognize that States with APCDs may
seek to integrate the publication of
hospital standard charge data and
negotiated charges with ongoing price
transparency and interoperability
efforts. Moreover, we are finalizing our
policy to permit hospitals to choose an
appropriate public facing website and
web page on which to make public its
comprehensive machine-readable list of
all standard charges for all items and
services.
Comment: A few commenters agreed
with our proposals for data accessibility,
specifically that accessing the hospital
charge information would not require
consumers to input information (such as
their name, email address, or other
personal identifying information) or
register. One commenter suggested,
however, that this requirement does not
appear to be in alignment with
Medicare.gov, which the commenter
notes requires visitors to provide
personal, identifying information (such
as date of birth) when reviewing options
for Medicare health plans.
Response: We thank commenters for
their support for barrier free access to
consumer cost comparison information
and are finalizing as proposed the
requirement hospitals provide barrierfree access to their machine-readable
file of hospital standard charges for all
items and services provided by the
hospital. The comment about access to
Medicare.gov is inaccurate; the public
may review and compare plans and
pricing anonymously—with or without
a drug list—without signing into
anything or providing personal
information. The website requires only
a zip code entry in order to narrow
down the available plans. Even if the
website did require submission of some
personal information, we do not believe
it is a good analogy for access to a data
file. A better analogy might be access to
CMS public use file data. Such data is
also made public online in a machinereadable format and does not require
users to create an account or enter PII
to download. In contrast, beneficiary
access to a personalized online portal
containing or using personalized
information (such as would allow a
patient to review and select a Medicare
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Advantage health plan or to access one’s
own claims data) would seem to us to
be very different. We are therefore
finalizing our proposals for barrier-free
access as proposed.
Final Action: We are finalizing, with
modifications, our proposals related to
location and accessibility of the
comprehensive machine-readable file of
all hospital standard charges for all
items and services it provides.
Specifically, we are finalizing that a
hospital would have discretion to
choose the internet location it uses to
post its file containing the list of
standard charges so long as the
comprehensive machine-readable file is
displayed on a publicly-available
website, it is displayed prominently and
clearly identifies the hospital location
with which the standard charges
information is associated (§ 180.50(d)(1)
and (2)). We are finalizing as proposed
that the hospital must ensure the
standard charge data are easily
accessible and without barriers,
including but not limited to that the
data can be accessed free of charge,
without having to establish a user
account or password, and without
having to submit PII (§ 180.50(d)(3)). We
are also finalizing our policy that the
data must be able to be digitally
searched (§ 180.50(d)(4)). Finally, we are
finalizing a modification to also require
that the hospital must use a CMSspecified naming convention for the file
(§ 180.50(d)(5)). The naming convention
for the file must be: <ein>_<hospitalname>_standardcharges.[json|xml|csv].
5. Frequency of Machine-Readable File
Updates
The statute requires hospitals to
establish, update, and make public their
standard charges for each year.
Therefore, we proposed to require
hospitals to make public and update
their file containing the list of all
standard charges for all items and
services at least once annually
(proposed new 45 CFR 180.50(e)). As
explained in the CY 2020 OPPS/ASC
proposed rule, we recognize that
hospital charges may change more
frequently and therefore we encouraged,
but did not propose to require, that
hospitals update this file more often, as
appropriate, so that the public could
access the most up-to-date charge
information. We also recognized that
hospitals may update their charges at
different times during the year and may
also have various State price
transparency reporting requirements
that require updates. For purposes of
these proposed requirements, we
explained that updates that would occur
at least once in a 12-month period
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would satisfy our proposed requirement
to update at least once annually, and
also serve to reduce reporting burden for
hospitals. In other words, we indicated
that the hospital could make public and
update its list of standard charges at any
point in time during the year, so long as
the update to the charge data would
occur no more than 12 months after
posting.
We also proposed to require hospitals
to clearly indicate the date of the last
update they made to the standard charge
data, and permitted some discretion as
to where the hospital indicated the date
of the last update. For example, we
stated that if a hospital chose to make
public its list of standard charges in
.XML format, the first row of the
spreadsheet could indicate the date the
file was last updated. We also stated
that the hospital could alternatively
choose to indicate the date the file was
last updated in text associated with the
file on the web page on which it was
posted, or could indicate the date in
some other way, as long as that date was
clearly indicated and associated with
the file or location containing the
standard charge information.
Comment: A few commenters
expressed concern that requiring
updates to the data only once every 12
months may mean the data posted will
not be useful to consumers because the
information posted may be outdated
depending on the frequency and timing
of contract renegotiation. A few
commenters also noted that updating
the database on a continual basis during
the year would be a significant burden
to hospitals, while another commenter
suggested that price information should
be updated more frequently, whenever
the prices are changed. One commenter
specifically supported the requirement
to update the standard charge
information annually. A few
commenters recommended that the web
page indicate the date of last update.
One commenter asked for clarification
regarding the process for price
disclosure when new medical
information is discovered that ‘‘changes
the care plan’’ and whether hospitals
need to update patients if pricing
information has already been provided.
Response: We thank commenters for
their support and recommendations.
The statute requires hospitals to
annually update its list of standard
charges, and we believe our proposed
requirement for hospitals to update their
comprehensive machine-readable list of
standard charges at least once in a 12
month period (which we are finalizing)
is consistent with its plain language. We
recognize the challenges inherent in
annual posting of a flat file containing
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all hospital standard charges for all
items in services. Specifically, we
recognize that such data may, for
various reasons, become outdated over
the course of a 12 month period, but we
also recognize that it may be
burdensome for a hospital to
continually update its standard charge
information. We believe our final policy
strikes a balance between consumer
need to plan and compare prices when
seeking care with hospital disclosure
burden. We note that in the CY 2020
OPPS/ASC proposed rule we sought
comment on alternative mechanisms
(such as requiring data to be presented
in an API format) that could allow for
access to continuously updated hospital
charge information. As noted in section
II.E.3 of this final rule, we will continue
to consider this option for future
rulemaking. We encourage hospitals to
make more frequent updates, at their
discretion and commend hospitals that
choose to go beyond these requirements
to more frequently update the standard
charge information they make online, or
that provide additional consumerspecific estimates based on consumer
care plans.
Final Action: At a new 45 CFR
180.50(e), we are finalizing as proposed
the requirement for hospitals to make
public and update their file containing
the list of all standard charges for all
items and services at least once
annually. For purposes of assessing
compliance, such updates must occur at
least once in a 12-month period. We are
also finalizing the requirement for
hospitals to clearly indicate the date of
the last update they have made to the
standard charge data, with some
discretion as to where the date of the
last update is indicated, so long as that
date is clearly indicated either within
the file or otherwise clearly associated
with the file.
6. Requirements for Making Public
Separate Machine-Readable Files for
Different Hospital Locations
As explained in the CY 2020 OPPS/
ASC proposed rule, we indicated our
understanding that some hospitals may
have different locations operating under
a consolidated or single State license,
and that different hospital locations may
offer different services that have
different associated standard charges.
To address this circumstance, we
proposed at new 45 CFR 180.50(a)(2)
that the requirements for making public
the machine-readable file containing all
standard charges for all items and
services would separately apply to each
hospital location such that each hospital
location would be required to make
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public a separate identifiable list of
standard charges.
Comment: One commenter supported
clearly indicating which hospital
location is covered if the hospital is part
of a health system. One commenter
expressed concern that because
academic and teaching institutions have
expansive campuses, requiring each
health system to fulfill the requirements
separately for each hospital location
would increase their burden
significantly.
Response: We clarify that a hospital
need not post separate files for each
clinic operating under a consolidated
state hospital license; it would be
sufficient for a hospital to post a single
file of standard charges for a single
campus location, if the file includes
charges for all items and services offered
at the single campus location.
In cases where such off-campus and
affiliated sites operate under the same
license (or approval) as a main location
but have different standard charges or
offer different items and services, these
locations would separately make public
the standard charges for such locations.
Final Action: We are finalizing as
proposed at new 45 CFR 180.50(a)(2)
(with technical edits for clarity) that the
requirements for making public the
machine-readable file containing all
standard charges for all items and
services apply to each hospital location
such that a separate identifiable list of
all standard charges applicable to each
hospital location would also would
have to be made public.
F. Requirements for Displaying
Shoppable Services in a ConsumerFriendly Manner
1. Background and Overview
In the CY 2020 OPPS/ASC proposed
rule we indicated our belief that
requiring hospitals to post on the
internet a machine-readable file
containing a list of all standard charges
for all items and services would be a
good first step for driving transparency
in healthcare pricing because the access
to such data would allow integration
into price transparency tools or into
EHR systems for use at the point of care
or otherwise where and when the
information is necessary to help inform
patients. As a result of the January 1,
2019 update to our guidance, we
received feedback that long lists of
charges in a file posted online in a
machine-readable format may not be
immediately or directly useful for many
healthcare consumers because the
amount of data could be overwhelming
or not easily understood by consumers.
Because of this, we considered ways of
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requiring or encouraging hospitals to
make public standard charges for
frequently provided services in a form
and manner that would be more directly
accessible and consumer friendly.
Therefore, in addition to including all
their standard charges for all items and
services in the machine-readable file,
we proposed that hospitals must make
public their payer-specific negotiated
charges for common services for which
consumers may have the opportunity to
shop, in a consumer-friendly manner.
First, we proposed requirements for
hospitals to display a list of payerspecific negotiated charges for a
specified set and number of
‘‘shoppable’’ services. We stated that we
believed doing so would enable
consumers to make comparisons across
hospital sites of care. Second, we made
proposals intended to ensure the charge
information for ‘‘shoppable’’ services
would be presented in a way that is
consumer-friendly, including presenting
the information as a service package.
Third, we made proposals related to
location, accessibility, and timing for
updates.
We explained our belief that the
proposals related to consumer-friendly
display of hospital charge information
would align with and enhance many
ongoing State and hospital efforts. We
sought comment from hospitals
regarding the extent to which our
proposals are duplicative of such
ongoing efforts, and how best to ensure
consistency of consumer-friendly data
display across hospital settings. We
further sought comment from
consumers regarding their potential
engagement with a list of ‘‘shoppable’’
hospital items and services, including
whether our proposals would provide
for a useful amount of data and data
elements that allow for actionable
comparisons of ‘‘shoppable’’ hospital
provided items and services.
2. Definition of ‘‘Shoppable Service’’
We proposed that for purposes of this
requirement, a ‘‘shoppable service’’
would be defined as a service package
that can be scheduled by a healthcare
consumer in advance. Shoppable
services are typically those that are
routinely provided in non-urgent
situations that do not require immediate
action or attention to the patient, thus
allowing patients to price shop and
schedule a service at a time that is
convenient for them. We proposed this
definition because it is consistent with
definitions proposed by policy experts
or used by researchers who identify a
service as ‘‘shoppable’’ if a patient is
able to determine where and when they
will receive services and can compare
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charges for multiple providers.148 Since
hospitals may not have insight into
whether a particular service is available
across multiple providers or where a
consumer will ultimately determine
where to receive a particular service, we
focused our proposed definition on the
first aspect, that is, whether or not a
service offered by the hospital could be
scheduled by the consumer in advance.
Additionally, we proposed that the
charges for such services be displayed
as a grouping of related services,
meaning that the charge for the primary
shoppable service would be displayed
along with charges for ancillary items
and services the hospital customarily
provides as part of or in addition to the
primary shoppable service. We
proposed that hospitals would make
public the payer-specific negotiated
charge for a primary shoppable service
that is grouped together with charges for
associated ancillary services because we
believe charge information displayed in
such a way is consumer-friendly and
patient-focused. In other words, we
believe that consumers want to see and
shop for healthcare services in the way
they experience the service. We
proposed to define an ‘‘ancillary
service’’ as an item or service a hospital
customarily provides as part of or in
conjunction with a shoppable primary
service (proposed new 45 CFR 180.20).
Ancillary items and services may
include laboratory, radiology, drugs,
delivery room (including maternity
labor room), operating room (including
post-anesthesia and postoperative
recovery rooms), therapy services
(physical, speech, occupational),
hospital fees, room and board charges,
and charges for employed professional
services. Ancillary services may also
include other special items and services
for which charges are customarily made
in addition to a routine service charge.
For example, an outpatient procedure
may include many services that are
provided by the hospital, for example,
local and/or global anesthesia, services
of employed professionals, supplies,
facility and/or ancillary facility fees,
imaging services, lab services and preand post-op follow up. To the extent
that a hospital customarily provides
(and bills for) such ancillary services as
a part of or in conjunction with the
primary service, we stated the hospital
should group the ancillary service
148 White C, and Eguchi M. Reference Pricing: A
Small Piece of the Health Care Price and Quality
Puzzle. National Institute for Health Care Reform
Research Brief Number 18 (2014). Available at:
https://www.mathematica.org/our-publicationsand-findings/publications/reference-pricing-asmall-piece-of-the-health-care-price-and-qualitypuzzle.
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charges along with the other payerspecific negotiated charges that are
displayed for the shoppable service. We
indicated that we believed such a
practice would be consumer-friendly by
presenting standard charge information
in a way that reflects how a patient
experiences the service.
Examples of primary shoppable
services may include certain imaging
and laboratory services, medical and
surgical procedures, and outpatient
clinic visits. The emphasis on
shoppable services aligns with various
State price transparency efforts and is
consistent with stakeholder feedback.
Further, this emphasis is consistent
with research demonstrating that
improving price transparency for
shoppable services can have an impact
on driving down the cost of healthcare.
We proposed to add this definition to
our regulations at proposed new 45 CFR
180.20.
Comment: Many commenters
generally supported the requirement for
hospitals to make public their standard
charges for shoppable services, stating
that consumers need the ability to shop
and compare common hospital services
prior to purchase. In particular, one
commenter commended CMS for the
focus on non-emergency services, for
which patients have an opportunity to
shop in advance.
Some commenters indicated that the
ability to schedule a service in advance
alone is not enough to ensure the
healthcare service is shoppable. For
example, one commenter stated that
patients need to have multiple providers
available in their insurer’s network that
provide the service. One commenter
argued that there are no healthcare
services that could be considered
shoppable because beneficiaries are
limited to the coverage options in their
health plan.
Additionally, commenters suggesting
limiting the scope of shoppable services
based on individual consumer
circumstances, for example, one
commenter suggested that the definition
of shoppable services be limited to noncovered, non-medically necessary
services such as elective cosmetic
surgery; otherwise, patients may believe
that a shoppable service is not a
necessary service. One commenter
urged CMS to ensure that the definition
of ‘‘shoppable services’’ will always
clearly exclude emergency department
services and that CMS never introduce
a definitional change that could in any
way be misconstrued to include them so
that patients would not be deterred from
seeking emergency care. One
commenter suggested that CMS focus
price transparency efforts on some
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prescription drugs and diagnostic
imaging only. A few commenters argued
that certain service such as vaginal
delivery and cancer treatments would
be excluded from being posted as
shoppable services because they believe
such services are unpredictable and
unable to be scheduled in advance.
Response: Our proposed definition for
a shoppable service aligns with
scholarly sources indicating that the
ability to schedule in advance is a key
concept for determining the
shoppability of a healthcare service. As
we explained in the CY 2020 OPPS/ASC
proposed rule, we believe it is
reasonable to define a service as
‘‘shoppable’’ when a consumer can
schedule it in advance and not by
additional criteria or concepts that
could enhance or reduce the
shoppability of a particular service in an
individual circumstance. For example, a
service may be medically necessary for
some patients but not others. A service
may be provided in an emergency
situation for some patients but not
others. A patient may or may not have
a plan or insurance network that
permits them to receive a service from
more than one provider in their region
or insurance network. However, such
issues are specific to individual
circumstances, and are not necessarily
the case for all individuals who may
have the opportunity to schedule a
particular healthcare service from a
hospital in advance. We therefore think
it is reasonable to use only the first
commonly used criterion for the
definition of a shoppable service (that
the service can be scheduled in
advance), as using additional criteria
may unduly limit the types of services
that may be shoppable for some
patients. Moreover, as we noted in the
CY 2020 OPPS/ASC proposed rule, we
limited the definition of shoppable
service to the first commonly used
definition (that the service can be
scheduled in advance) and did not
expand to other commonly used
definitions (such as whether or not there
is more than one provider in a market)
because we are finalizing requirements
that apply to hospitals, and hospitals
may not be able to determine whether
a service is shoppable under other
criteria, for example, a hospital may not
be aware of whether or not there are
other providers of the service available
to their patients.
We disagree with stakeholders who
asserted that services provided for
delivery of babies or that cancer
treatments are not able to be scheduled
in advance and therefore not shoppable.
In most instances, the location for the
delivery of a baby is planned well in
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advance; at least one analysis of a price
transparency tool for non-elderly
patients found that vaginal deliveries
are one of the most commonly shopped
healthcare services.149 Similarly,
patients who receive a cancer diagnosis
often seek information about providers
that are available to treat them before
committing to a treatment course by a
particular provider. By ensuring the
release of hospital standard charge
information, we seek to improve
consumer knowledge for the cost side of
the value proposition. Nothing in this
rule would prohibit hospitals from
displaying quality information along
with standard charge information, and
we encourage hospitals to provide
consumers with both cost and quality
information in a consumer-friendly
manner.
Comment: One commenter disagreed
with the focus on shoppable services
entirely, citing a study that found that
no more than 43 percent of hospital
spending is attributable to items and
services that can reasonably be
scheduled in advance, and suggested
CMS focus on other hospital services to
impact consumer shopping behavior.
Response: Our research has shown
that there is great interest among
consumers in taking price into
consideration when deciding on
treatment options and choice of
provider. For example, studies have
found that more than 40 percent of
healthcare services are potentially
shoppable by consumers 150 151 but such
services are typically lower cost services
such as laboratory tests, imaging, and
office visits, along with some highercost procedures such as joint
replacements. Researchers estimate that
approximately $36 billion could be
saved when consumers are given the
ability to shop and compare prices for
common shoppable services.152 As the
149 Sinaiko AD, and Rosenthal MB. Examining A
Health Care Price Transparency Tool: Who Uses It,
And How They Shop For Care. Health Affairs. April
2016. Available at: https://www.healthaffairs.org/
doi/full/10.1377/hlthaff.2015.0746.
150 White C, and Eguchi M. Reference Pricing: A
Small Piece of the Health Care Price and Quality
Puzzle. National Institute for Health Care Reform
Research Brief Number 18 (2014). Available at:
https://www.mathematica.org/our-publicationsand-findings/publications/reference-pricing-asmall-piece-of-the-health-care-price-and-qualitypuzzle.
151 Frost A, and Newman D. Spending on
Shoppable Services in Health Care. Health Care
Cost Institute Issue Brief No. 11 (2016). Available
at https://www.healthcostinstitute.org/files/
Shoppable%20Services%20IB%203.2.16_0.pdf.
152 Coluni B. White Paper: Save $36 Billion in
U.S. Healthcare Spending Through Price
Transparency. Truven Health Analytics, 2012.
Available at: https://www.akleg.gov/basis/get_
documents.asp?session=30&docid=14495.
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commenter notes, at least one study
indicates that approximately 43 percent
of the $524 billion spend on healthcare
by individuals with employersponsored insurance in 2011 was spent
on shoppable services.153 We believe
these studies taken together support our
focus on shoppable services; however,
we agree that many non-shoppable
hospital and emergency services can be
very expensive and account for much of
the healthcare spending in the United
States.
Comment: One commenter agreed
with the necessity of displaying
ancillary items and services in
conjunction with the primary service to
give consumers ‘‘true line of sight’’ into
their potential costs, but suggested that
CMS use Medicare claims data to
identify the highest volume and highest
cost ancillary services associated with
the 70 proposed CMS-specified
shoppable services, and then provide
this mapping of service codes in the
final rule. Another commenter similarly
suggested a ‘‘numeric standard’’ for
determining the list of all associated
ancillary services by averaging all the
required charges associated with the
primary services, since in some cases
only a small minority of patients who
receive the primary service also receive
the ancillary services.
Several commenters requested that
CMS clarify how hospitals would
determine which services they
‘‘customarily’’ provide to meet the
requirements for displaying ancillary
services with the primary shoppable
service. A few commenters expressed
concern that the definition for ancillary
services is not adequately clear, and, as
a result, hospitals may not interpret
ancillary services consistently and
ultimately cause confusion for
consumers. One commenter suggested
that since complex service packages are
difficult to unbundle and shop for in
isolation, truly shoppable services
should be limited to those that can be
grouped into a reliable service package
or are typically only administered as an
independent service (which the
150 White C, and Eguchi M. Reference Pricing: A
Small Piece of the Health Care Price and Quality
Puzzle. National Institute for Health Care Reform
Research Brief Number 18 (2014). Available at:
https://www.mathematica.org/our-publicationsand-findings/publications/reference-pricing-asmall-piece-of-the-health-care-price-and-qualitypuzzle.
151 Frost A, and Newman D. Spending on
Shoppable Services in Health Care. Health Care
Cost Institute Issue Brief No. 11 (2016). Available
at https://www.healthcostinstitute.org/files/
Shoppable%20Services%20IB%203.2.16_0.pdf.
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commenter suggests be referred to as
discrete services). A few other
commenters suggested that in their
hospitals, all supplies, drugs, ancillary
tests, anesthesia, and recovery are
charged separately by contracted
clinicians or facilities apart from the
primary service and therefore their
hospital could not meet the proposed
display requirements for standard
charges for shoppable services.
Response: We believe that each
hospital should be able to query its
administrative billing system or EHR
system by CPT code to determine what
other services or line items from other
departments (laboratory, radiology, etc.)
are typically billed with the primary
shoppable service and present this in a
consumer-friendly manner to
prospective patients. Although this
information may differ across hospitals,
we anticipate this effort will be
beneficial to consumers who wish to
understand their likely cost of care, the
items and services that are included,
and how each might vary by hospital.
We further believe that hospitals should
have flexibility to determine how best to
display the primary shoppable service
as well as the associated ancillary
services in a manner that is consumerfriendly. We note that many hospitals
and hospital price estimator tools are
already making this information
available and suggest that hospitals
unfamiliar with such efforts look to
such tools and displays for suggestions
on how to display such information in
a consumer-friendly manner. Further,
including ancillary services and
presenting them together as a shoppable
service package conforms with
recommended best practice for
displaying to consumers prices for
shoppable services.154
Further, we appreciate the suggestions
made by commenters on opportunities
for hospitals to report ancillary services
by highest volume, frequency, and cost.
Since, as the commenter noted, the
availability of these services varies by
hospital, we decline to impose a
standard for the number and types of
ancillary services provided.
We appreciate the comment about
limiting shoppable services only to
those that can be reliably bundled into
service package and to include
individual services only when they are
always offered as an individual service.
152 Coluni B. White Paper: Save $36 Billion in
U.S. Healthcare Spending Through Price
Transparency. Truven Health Analytics, 2012.
Available at: https://www.akleg.gov/basis/get_
documents.asp?session=30&docid=14495.
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We recognize that these practices may
differ from hospital to hospital. Each
hospital, therefore, must determine
whether it customarily provides
ancillary services in conjunction with
the primary shoppable service and if so,
how best to communicate and display
them. We offer in Table 2 an example
template for a display of shoppable
service packages which communicates
the standard charge for the primary
service along with standard charges for
ancillary services customarily provided
by the hospital. We note that our final
rules would require a hospital to display
the primary shoppable service charges
along with the charges for the ancillary
services it provides and hospitals are
not required to indicate other ancillary
services that are typically furnished by
other providers involved in the primary
shoppable service. However, for sake of
consumer-friendly presentation, we
strongly encourage and recommend that
the hospital indicate all ancillary
services the customer may expect as
part of the primary shoppable service,
and to indicate they may be billed
separately by other entities involved in
their care for such services.
Finally, we agree that hospitals may
not customarily provide ancillary
services with some shoppable services.
Such services may be ‘‘simple’’ or
‘‘discrete’’ as described by commenters,
meaning that they are typically
experienced by the consumer and billed
for by the hospital in the same way—as
a single service. In this case, as in the
example in Table 2, such services would
be listed as a single shoppable service.
As a result, we are finalizing a
modification to our definition of
‘‘shoppable services’’ to remove the
reference to a ‘‘service package.’’ We
believe removing the term ‘‘package’’
from the definition is necessary to
clarify that not every shoppable service
is a service package. In certain
instances, a primary ‘‘shoppable
service’’ may be an individual item or
service or a service package.
Additionally, not all shoppable services
are necessarily associated with
additional ancillary services. We believe
this will help clarify and simplify the
definition. In so doing, however, we do
not intend to imply that the display of
ancillary services is no longer needed or
important; we are still finalizing our
policy that hospitals display the
ancillary services along with each
primary shoppable service, as
applicable.
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TABLE 2—SAMPLE OF DISPLAY OF SHOPPABLE SERVICES
Hospital XYZ Medical Center
Prices Posted and Effective [month/day/year]
Notes: [insert any clarifying notes or disclaimers]
Shoppable service
Primary service and ancillary services
CPT/HCPCS
code
[Standard charge
for Plan X]
Colonoscopy .................................
primary diagnostic procedure ...................................................
anesthesia (medication only) ...................................................
45378
[code(s)]
$750
$122
physician services ....................................................................
pathology/interpretation of results ............................................
Office Visit .....................................
Vaginal Delivery ............................
Not provided by hospital (may be billed
separately)
Not provided by hospital (may be billed
separately)
facility fee .................................................................................
New patient outpatient visit, 30 min .........................................
primary procedure ....................................................................
hospital services .......................................................................
physician services ....................................................................
general anesthesia ...................................................................
pain control ...............................................................................
[code(s)]
99203
59400
[code(s)]
Not provided by hospital (may be billed
separately)
Not provided by hospital (may be billed
separately)
Not provided by hospital (may be billed
separately)
two day hospital stay ...............................................................
monitoring after delivery ...........................................................
Comment: Several hospital
commenters expressed concern that the
volume of plans, in some cases more
than 100, with which they have
contracted rates would present a
challenge with respect to collecting and
posting ancillary items and services for
each primary service.
Response: In the CY 2020 OPPS/ASC
proposed rule, we proposed that
hospitals make public their payerspecific negotiated charges for at least
300 shoppable services in a consumerfriendly manner. We are finalizing this
policy because we believe it is necessary
to present hospital standard charge
information in a more consumerfriendly manner than simply to make all
standard charges for all items and
services public in a comprehensive
machine-readable file. We did not
propose that hospitals display their
gross charges in a consumer-friendly
format because, as many hospitals
commented on the FY 2019 IPPS/LTCH
PPS rule in which we updated our
guidance to require hospitals to make
public their chargemaster rates online in
a machine-readable format, such charges
are not relevant to most consumers,
even to self-pay consumers who are
often provided discounted rates by the
hospital. As discussed in more detail in
section II.D of this final rule, we are also
finalizing three additional types of
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standard charges: (1) The discounted
cash price, (2) the de-identified
minimum negotiated charge, and (3) the
de-identified maximum negotiated
charge. We believe these types of
standard charges are important and
relevant to consumers and therefore will
include these types of standard charges
in the data elements hospitals must
display in a consumer-friendly manner.
We discuss this in more detail in section
II.F.4 of this final rule.
We recognize that hospitals will be
presenting much of their standard
charge data in a manner that has
historically not been made available to
the public. For many hospitals,
particularly large hospitals, this may
involve display of data for potentially
many dozens of payers and plan
products. This rule will not require
hospitals to change any of their charging
or billing practices, but, rather, to
provide their standard charge
information to the public in a consumerfriendly manner, that is, in a way that
more closely approximates hospital
provided services as they are
experienced by the consumer. A
detailed assessment of the estimated
burden on hospitals may be found in
section V of this final rule.
We note that the final rules, as
discussed in more detail in II.F.5 of this
final rule, provide hospitals with
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$500
$54
[$]
[$]
[code(s)]
[code(s)]
[$]
[$]
flexibility to determine the format they
wish to use in order to make these data
consumer-friendly and readily
accessible. For hospitals that lack
resources, flat files posted online may
be the simplest and least expensive
option. In such cases, we believe it
would be reasonable and permissible
under our final rules related to the
consumer-friendly display of shoppable
services for a hospital to post one file of
shoppable services for each set of
standard charges displayed. For
example, the hospital could post one
consumer-friendly file for each list of
the payer-specific negotiated charges the
hospital has established with each payer
for its list of 300 shoppable services, a
stand-alone consumer-friendly file of
discounted cash prices for shoppable
services, and a stand-alone consumerfriendly file of the de-identified
minimum and maximum negotiated
charges for each of the shoppable
services. In this way, consumers could
search for and review only the charges
that are standard for their particular
insurance plan for 300 shoppable
services provided by the hospital in a
consumer-friendly format. Self-pay
individuals could search for and review
a file focused on providing them with
discounted cash price information for
each of the shoppable services.
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Final Action: We are modifying the
definition of ‘‘shoppable service’’ to
remove the phrase ‘‘shoppable service
package’’ and finalizing a definition of
‘‘shoppable services’’ to mean a service
that can be scheduled by a healthcare
consumer in advance. We are finalizing
that when the shoppable service is
customarily accompanied by the
provision of ancillary services, the
hospital must present the shoppable
service as a grouping of related services,
meaning that the charge for the primary
shoppable service (whether an
individual item or service or service
package) is displayed along with
charges for ancillary services. We
finalize our definition of ‘‘ancillary
service’’ for purposes of section 2718(e)
of the PHS Act to mean an item or
service a hospital customarily provides
as part of or in conjunction with a
shoppable primary service (new 45 CFR
180.20). As explained in the CY 2020
OPPS/ASC proposed rule, ancillary
items and services may include
laboratory, radiology, drugs, delivery
room (including maternity labor room),
operating room (including postanesthesia and postoperative recovery
rooms), therapy services (physical,
speech, occupational), hospital fees,
room and board charges, and charges for
employed professional services.
Ancillary services may also include
other special items and services for
which charges are customarily made in
addition to a routine shoppable service
charge. For example, an outpatient
procedure may include additional
services that are provided by the
hospital, for example, local and/or
global anesthesia, services of employed
professionals, supplies, facility and/or
ancillary facility fees, imaging services,
lab services, and pre- and post-op follow
up.
3. Selected Shoppable Services
We proposed to require hospitals to
make public a list of their payer-specific
negotiated charges for as many of the 70
shoppable services that we identify in
Table 3 that are provided by the
hospital, and as many additional
shoppable services selected by the
hospital as are necessary to reach a
combined total of at least 300 shoppable
services (new 45 CFR 180.60(a)).
In a study of 2011 claims by
autoworkers, researchers identified a set
of 350 frequently billed healthcare
services that consumers could schedule
in advance and for which there was
variation in charges across providers.155
153 Health Care Cost Institute. Spending on
Shoppable Services in Health Care. Issue Brief #11.
March 2016. Available at: https://
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Hospitals that are early adopters of price
transparency have suggested that it is
possible to initially identify and display
good-faith individualized price
estimates for at least 350 shoppable
healthcare services identified by
primary billing codes (including prices
for ancillary services) with more
sophisticated price transparency tool
developers creating and being able to
display individualized pricing estimates
for at least 1000 shoppable services. In
contrast, most States that require
hospital posting of shoppable services
range in requiring 25–50 shoppable
services, with California being the only
State that requires the corresponding
charge information to include ancillary
services. In the CY 2020 OPPS/ASC
proposed rule, we indicated that since
these rules would apply to all hospitals
operating in the United States, some of
which may not have any experience in
displaying charges for shoppable
services, we believed it would be
reasonable to propose a starting point of
at least 300 shoppable services for
which hospitals would be required to
display payer-specific negotiated
charges. We further indicated that we
anticipated that we would increase this
number over time as hospitals become
accustomed to displaying charge
information to consumers as a grouping
of related charges and as such data is
more routinely used by consumers.
We also indicated that we believed it
would be reasonable to require a portion
of the 300 shoppable services to be
CMS-specified in order to ensure
standardization that would provide
consumers with the ability to compare
prices across hospital settings. We
stated that we further believed it would
be prudent to permit hospitals to select
a portion of the shoppable services
themselves, recognizing that some
hospitals may specialize in certain
services (for example, specialized
procedures) or may serve populations
that utilize other shoppable services
with more frequency or are more
relevant than the ones we have
identified for purposes of the CMSspecified services.
The proposed list of 70 shoppable
services were selected based on an
analysis of shoppable services that are
currently made public under State price
transparency requirements, a review of
services that frequently appear in webbased price transparency tools, an
analysis of high volume services and
high cost procedures derived from
External Data Gathering Environment
www.healthcostinstitute.org/images/easyblog_
articles/110/Shoppable-Services-IB-3.2.16_0.pdf.
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(EDGE) server data,156 and a review by
CMS medical officers. In other words,
we used a combination of quantitative
analysis of the EDGE server claims data,
a qualitative review of commonly
selected services for State and hospital
price transparency initiatives and tools,
and clinician review to ensure such
services could be scheduled in advance
in order to identify our list of 70 CMSspecified shoppable services.
In addition to the proposed 70 CMSspecified shoppable services, we also
proposed that each hospital would
select, at minimum, 230 additional
shoppable services, identified by a
primary HCPCS, CPT, DRG (or other
widely used industry code, as
applicable) and make publicly available
a list of its payer-specific negotiated
charges for each of those shoppable
services, including the payer-specific
negotiated charges for the shoppable
service in both the inpatient setting and
the outpatient setting, if different. We
further proposed that hospitals select
such services based on the utilization or
billing rate of the services in the past
year. We stated that we believed that
enabling hospitals to select most of the
shoppable services for which they make
their payer-specific negotiated charges
available would permit them to tailor
their list of shoppable services to their
specific patient populations and area of
expertise. For example, a children’s
hospital could select additional
shoppable services that are
predominantly provided to children.
Although we indicated that we
believed that most hospitals would
provide the 70 CMS-specified shoppable
services (which are very common and
frequently billed by hospitals based on
our analysis of claims) it is possible that
some hospitals may not offer all of them
(for example, specialty hospitals).
Therefore, we proposed that hospitals
would make public a list of their payerspecific negotiated charges for as many
of the 70 shoppable services specified
by CMS that are provided by the
hospital, plus as many additional
shoppable services as would be
necessary to reach a total of at least 300
shoppable services.
We articulated an alternative option
by which we would specify a larger set
of shoppable services and allow
156 Consistent with 45 CFR 153.700, in States
where HHS is operating the risk adjustment
program, issuers must submit enrollment, claims,
and encounter data for risk adjustment-covered
plans in the individual and small group markets
through the External Data Gathering Environment
(EDGE) servers. Issuers upload enrollee,
pharmaceutical claim, medical claim, and
supplemental diagnosis information from their
systems to an issuer-owned and controlled EDGE
server.
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hospitals to select up to 70 CMSspecified shoppable services from the
larger list for which it would make its
payer-specific negotiated charges
publicly available. The hospital would
then select an additional 230 shoppable
services for a total of 300 shoppable
services. But we did not propose this
because we believe most hospitals
provide the 70 CMS-specified shoppable
services and because we were
concerned that more discretion would
erode our desire to ensure consumers
can get hospital charge information for
a minimum standardized set of services.
We sought public comments on the 70
CMS-specified shoppable services we
proposed. We indicated we were
particularly interested in feedback
regarding the specific services we
identified as shoppable services and
whether other services should be
included because they are more
common, more shoppable, or both. We
also indicated we were interested in
feedback on whether we should require
more or less than a total of 300
shoppable services. Specifically, we
sought comment from hospitals and
consumers on whether a list of 100
shoppable services (or less) would be a
reasonable starting point. We also
sought public comment on whether we
should identify more specific
requirements related to hospitalselected shoppable services; for
example, requiring hospitals to select
their most frequently billed shoppable
services (that are not included in the
CMS-specified list).
Comment: Many commenters
provided opinions about the number of
shoppable services that hospitals would
be required to display. Several
commenters indicated the total number
of shoppable services should be
increased to more than 300. For
example, one commenter suggested that
the list of shoppable services be as
robust as necessary, using an example of
some price transparency platforms that
include up to 8,000–9,000 procedures.
One commenter suggested that CMS
expand on the required list of 70 and
leverage the experience of states to add
more services. One commenter
suggested that all hospital services
should be displayed because any nonemergent service provided by the
hospital could be scheduled in advance.
In contrast, many commenters
supported decreasing the total number
of shoppable services, arguing that a
lower number would be more
manageable and less burdensome for
hospitals. For example, one commenter
stated that the list of shoppable services
should be limited to the 70 that CMS
initially provided without expanding.
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Several commenters argued that
requiring a total of 300 shoppable
services is excessive, especially for
small rural hospitals and CAHs that do
not provide surgical, magnetic
resonance imaging (MRI), or obstetric
care, with one commenter suggesting
that 75–100 total items and services
would be more reasonable. One
commenter suggested reducing the
number of shoppable services to reflect
the small number of inpatient services
provided by LTCHs. One commenter
specifically suggested that rather than
selecting 230 shoppable services,
hospitals should select 100 total
services distributed evenly across the 25
highest price inpatient services, the 25
highest dollar value inpatient services
(calculated using price per service
multiplied by the number of services
provided), the 25 highest price
outpatient services, and the 25 highest
dollar value outpatient services.
Response: As we indicated in the CY
2020 OPPS/ASC proposed rule, we
believe that 300 shoppable services is a
reasonable number based on
research,157 discussions with hospital
executives who are early adopters and
indicated it is possible to initially
identify and display good-faith
individualized price estimates for at
least 350 shoppable healthcare services
identified by primary billing codes
(including prices for ancillary services),
and discussions with more
sophisticated price transparency tool
developers who identify and display
more than 1,000 shoppable services. By
contrast, we recognized that most States
that require hospital posting of
shoppable services require 25–50
shoppable services, with California
being the only State that requires the
corresponding charge information to
include ancillary services. Thus, we
determined that 300 shoppable services
would be a reasonable starting point.
While we agree that nearly all hospital
items and services could be considered
‘‘shoppable’’ because nearly all could be
scheduled in advance, we continue to
believe that a total of 300 services
strikes a balance between the need for
consumer-friendly presentation of
shoppable services and hospital burden
and are therefore finalizing as proposed
our requirement that hospitals make
public 70 CMS-specified shoppable
services along with an additional 230
157 White C. and Eguchi M. Reference Pricing: A
Small Piece of the Health Care Price and Quality
Puzzle. National Institute for Health Care Reform
Research Brief Number 18 (2014). Available at:
https://www.mathematica.org/our-publicationsand-findings/publications/reference-pricing-asmall-piece-of-the-health-care-price-and-qualitypuzzle.
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65569
hospital-selected shoppable services for
a total of 300 shoppable services.
Further, as indicated in the CY 2020
OPPS/ASC proposed rule, we
recognized that some hospitals may not
offer all 70 CMS-specified services.
Therefore, we proposed and are
finalizing a requirement that hospitals
would make public their list of standard
charges for as many of the 70 shoppable
services specified by CMS that are
provided by the hospital, plus as many
additional shoppable services as would
be necessary to reach a total of at least
300 shoppable services. We agree with
commenters that selecting shoppable
services based on the highest price and
highest dollar value inpatient and
outpatient services are good examples of
criteria for hospitals to consider as they
determine their hospital-selected 230
shoppable services, however, many
such services are not as common as
other shoppable services provided by
the hospital. We believe that hospitals
should make final determinations based
on how commonly such services are
provided to their patient population,
and thus we are finalizing as proposed
our requirement that hospitals select
such services based on the utilization or
billing rate of the services in the past
year. In other words, the hospital must
take into consideration the frequency
with which they provide services that
meet the definition of ‘shoppable’ to the
patient population they serve when
determining the hospital-selected
shoppable services. We note that
nothing would preclude a hospital from
taking additional information (such as
the cost of the services) into
consideration as they develop their list
of 230 shoppable services.
In light of commenters that asserted
that some small or specialty hospitals
may not offer 300 services that could be
scheduled by consumers in advance, we
are modifying our requirements to
finalize a policy that in cases where a
hospital does not provide 300 services
that could be scheduled by consumers
in advance, the hospital must list as
many of the services it provides that
could be scheduled by patients in
advance (that is, the hospital must list
as many shoppable services as it
provides).
Comment: Several commenters cited
the need for uniformity in hospital
selection of shoppable services. A few
commenters agreed that shoppable
services should be standardized to allow
for comparability for consumers. A few
commenters argued that patients would
not be able to adequately compare
pricing information for the items and
services in 70 CMS-identified shoppable
services that are performed in non-
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hospital settings. One commenter
suggested that CMS define a specific
CPT code range to clarify which
procedures are required among the list
of shoppable services to ensure
uniformity and accuracy. One
commenter suggested that these
requirements be phased in gradually,
starting with a requirement to post
standard charges for ‘‘simpler’’ visits
initially, and then include surgeries,
DRGs, and services that are more
complicated. A few commenters
expressed concerns that the variability
in how hospitals bundle items and
services would not yield accurate
consumer comparisons for shoppable
services.
Response: To ensure some degree of
uniformity in the shoppable services
hospitals make public in a consumerfriendly manner, we proposed and are
finalizing 70 CMS-specified hospital
services identified by CPT and other
commonly used billing codes. As we
stated in the CY 2020 OPPS/ASC
proposed rule, the list of 70 shoppable
services were selected based on an
analysis of shoppable services that are
currently made public under State price
transparency requirements, a review of
services that frequently appear in webbased price transparency tools, an
analysis of high volume services and
high cost procedures derived from
EDGE server data,158 and a review by
CMS medical officers. In other words,
we used a combination of quantitative
analysis of the EDGE server claims data,
a qualitative review of commonly
selected services for State and hospital
price transparency initiatives and tools,
and clinician review to ensure such
services could be scheduled in advance
in order to identify our list of 70 CMSspecified shoppable services. Based on
this analysis, we believe that these 70
CMS-specified shoppable services are
commonly provided by hospitals and
we believe hospital display of these
services will ensure consumers have
access to standard charges for a
minimum set of shoppable services.
We recognize that many of the
shoppable services included on the list
of 70 CMS-specified services are
provided by settings other than
hospitals; however, our requirements
apply only to hospitals (as defined at 45
158 Consistent with 45 CFR 153.700, in States
where HHS is operating the risk adjustment
program, issuers must submit enrollment, claims,
and encounter data for risk adjustment-covered
plans in the individual and small group markets
through the External Data Gathering Environment
(EDGE) servers. Issuers upload enrollee,
pharmaceutical claim, medical claim, and
supplemental diagnosis information from their
systems to an issuer-owned and controlled EDGE
server.
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22:36 Nov 26, 2019
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CFR 180.20), and not when they are
provided by non-hospital sites of care.
Therefore this information is useful to
consumers when they are comparing
services across hospital settings. While
non-hospital sites of care are not subject
to these regulations we are finalizing,
we encourage non-hospital sites of care
that offer the same shoppable services to
standardize their displays of charges so
that consumers have more options and
information available to them.
We appreciate that beginning with
‘‘simpler’’ shoppable services could
provide a phased pathway for hospitals
to make public their shoppable services;
however, we decline to adopt this
approach because some of the more
‘‘complex’’ shoppable services are those
for which consumers routinely shop (for
example, colonoscopy or vaginal
delivery). We recognize that there may
be some variability in the method used
by hospitals to establish and display
standard charges for shoppable primary
services and associated ancillary
services, and we encourage hospitals to
communicate in consumer-friendly
ways what is or is not included in the
hospital’s prices for a shoppable service
and its ancillary services.
Comment: Several commenters
offered comments related to the services
included on the CMS-specified list of 70
shoppable services. For example, one
commenter provided a list of 23 services
they suggested removing from the 70
CMS-specific shoppable services due to
their variability in cost, charge
structure, charge amounts, and
associated complexity for providers to
develop a sound ‘‘proposed rate.’’ The
list provided by the commenter
included procedures identified by DRG
that are typically divided into those
with and without major comorbid
conditions or complications (MCC).
A few commenters indicated their
belief that the services provided by
cancer hospitals are not shoppable, and
one commenter argued that the list of 70
CMS-specified shoppable services are
irrelevant to cancer hospitals because
cancer hospitals do not offer standalone
services (such as imaging, laboratory or
surgical services). Instead, such
hospitals provide integrated disease
management with disease-specific
financial counseling. One commenter
indicated that specialty hospitals (such
as children’s hospitals, orthopedic, or
cancer facilities) should have
customized lists of shoppable services.
A few commenters requested that
Evaluation and Management (E&M)
services be removed from the list
because E&M services are billed by
providers in an office setting and not
hospitals. A few commenters requested
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that laboratory testing be removed from
the list with one commenter requesting
that CMS remove 14 routine laboratory
tests included in the required list of 70
shoppable items and services because
they are among the least costly services
and are less central to patients’
economic and site of care decisions, and
suggested that CMS replace them with
higher cost procedures more likely to be
separately paid when performed in a
hospital setting. One commenter stated
that the list of shoppable services is too
long and includes codes that are not
billed by many hospitals and rarely
scheduled in advance, for example,
laboratory tests and CPT code 93000 for
electrocardiogram. By contrast, one
commenter encouraged CMS to include
clinical laboratory test pricing as part of
the standard charge information
hospitals are required to post, and
requested that CMS ensure the
requirements under this rule are
consistent with the type of data required
to be reported to CMS under section
216(a) of the Protecting Access to
Medicare Act (PAMA).
One commenter requested
clarification on whether posting an
average charge based on historical cases
would be sufficient if the hospital does
not charge based on the specific CMSspecified CPT or DRG codes. Another
commenter pointed out that the
standard DRG codes in the list of 70
CMS-specified shoppable services
correspond to MS–DRGs and not to
DRGs used by third party payers (for
example, All Patients Refined (APR)–
DRGs). One commenter requested
clarification on how the 70 CMSspecified shoppable services would be
categorized asking whether it would be
DRG for all inpatient services only, and
if so, what is the packaging type for
ambulatory services.
Response: We appreciate that
specialty hospitals offer services that are
different from most hospitals, however,
we do not believe that should be an
impediment to specialty hospitals
displaying their charges for shoppable
services. Similarly, we believe our
requirements have addressed situations
in which a hospital does not provide
one or more of the 70 CMS-specified
shoppable services. Specifically, we
proposed and are finalizing a
requirement that if a hospital does not
provide some of the 70 CMS-specified
services, then the hospital would
identify enough shoppable services that
it commonly provides to its unique
patient population so that the total
number of shoppable services is at least
300. We believe this policy will ensure
that the shoppable services posted are
standardized as much as possible across
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all hospitals while also ensuring
specialty hospital have flexibility to
make public the most relevant
shoppable services for their unique
patient populations.
The 70 CMS-specified shoppable
services are found in Table 3 and are
divided into four broad categories: E&M
Services, Laboratory and Pathology
Services, Radiology Services, Medicine
and Surgery Services. While some such
services (for example, E&M or laboratory
services) may not be the most expensive
hospital services, our analysis indicates
they are commonly billed and are
healthcare services that are commonly
shopped. Such services may be billed by
a hospital as part of a hospital inpatient
or outpatient visit. As noted above, to
the extent such services are not
provided by a hospital, the hospital may
select additional shoppable services that
are relevant to its patient population.
We appreciate commenters who
pointed out that the codes numbers
listed for DRG procedures are MS–DRG
codes and not APR–DRGs or other third
party payer service package codes. We
recognize this could also be the case for
other CMS-specified services that are
routinely negotiated by hospitals with
third party payers as packaged services.
For example, the same or similar
shoppable service may be paid as a
service package by two different payers
that use two different common billing
codes (for example, an MS–DRG by
Medicare versus an APR–DRG by
another third party payer). As such, we
will permit hospitals to make
appropriate substitutions and crosswalks as necessary to allow them to
display their standard charges for the
shoppable services across all their third
party payers. Average charges based on
prior years would not be acceptable as
an average charge is not one of the types
of standard charges we are finalizing in
this rule.
Section 1834A of the SSA, as
established by section 216(a) of the
PAMA, required significant changes to
how Medicare pays for clinical
diagnostic laboratory tests under the
Clinical Laboratory Fee Schedule.
Laboratories, including independent
laboratories, physician office
laboratories and hospital outreach
laboratories, that meet the definition of
an applicable laboratory are required to
report applicable information, which
generally includes each private payor
rate for each clinical diagnostic
laboratory test for which final payment
has been made during the data
collection period, the associated volume
of tests performed corresponding to
each private payor rate, and the specific
HCPCS code associated with the test.
We do not believe that any of the
provisions under this rule conflict with
or duplicate the requirements under
section 1834A of the SSA. While
consumer-friendly display of shoppable
laboratory services may include similar
data (such as payer-specific negotiated
charges), the requirement under this
rule is to provide that information in a
consumer-friendly format to which
consumers have easy access.
We decline to make any changes in
our list of CMS-specified shoppable
services. As explained in the CY 2020
OPPS/ASC proposed rule, we used a
combination of quantitative analysis of
the EDGE server claims data, a
qualitative review of commonly selected
services for State and hospital price
transparency initiatives and tools, and
clinician review to ensure such services
could be scheduled in advance in order
to identify our list of 70 CMS-specified
shoppable services. We are therefore
finalizing the 70 CMS-specified
shoppable services as proposed.
65571
Final Action: We are finalizing as
proposed our requirement for hospitals
to make public their standard charges
for as many of the 70 shoppable services
that we identify in Table 3 that are
provided by the hospital, and as many
additional shoppable services selected
by the hospital as is necessary for a
combined total of at least 300 shoppable
services (new § 180.60(a)). In response
to comments, we are adding a
requirement that if a hospital does not
provide 300 shoppable services, the
hospital must list as many shoppable
services as they provide. These
requirements will be finalized at 45 CFR
180.60(a). We will also permit hospitals
to make appropriate coding
substitutions and cross-walks as
necessary to be able to display their
standard charges for the 70 CMSspecified services across third party
payers.
We are further finalizing as proposed
that in selecting a shoppable service, a
hospital must consider the rate at which
it provides and bills for that shoppable
service. In other words, the shoppable
services selected for display by the
hospital should be commonly provided
to the hospital’s patient population. We
note that this proposal, which discussed
in the CY 2020 OPPS/ASC proposed
rule (84 FR 39589) was inadvertently
omitted from the proposed regulation
text but we are including it at new 45
CFR 180.60(a).
Finally, we clarify that hospitals
should cross-walk and use, as
applicable, an appropriate payerspecific billing code (for example, an
APR–DRG code) in place of the MS–
DRG code indicated for the five
procedures in the list of 70 CMSspecified shoppable services that are
identified by MS–DRG codes 216, 460,
470, 473, and 743.
TABLE 3—FINAL LIST OF 70 CMS-SPECIFIED SHOPPABLE SERVICES
Evaluation & management services
2020 CPT/HCPCS
primary code
Psychotherapy, 30 min ..............................................................................................................................................................
Psychotherapy, 45 min ..............................................................................................................................................................
Psychotherapy, 60 min ..............................................................................................................................................................
Family psychotherapy, not including patient, 50 min ................................................................................................................
Family psychotherapy, including patient, 50 min ......................................................................................................................
Group psychotherapy ................................................................................................................................................................
New patient office or other outpatient visit, typically 30 min .....................................................................................................
New patient office of other outpatient visit, typically 45 min .....................................................................................................
New patient office of other outpatient visit, typically 60 min .....................................................................................................
Patient office consultation, typically 40 min ..............................................................................................................................
Patient office consultation, typically 60 min ..............................................................................................................................
Initial new patient preventive medicine evaluation (18–39 years) ............................................................................................
Initial new patient preventive medicine evaluation (40–64 years) ............................................................................................
90832
90834
90837
90846
90847
90853
99203
99204
99205
99243
99244
99385
99386
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Laboratory & pathology services
2020 CPT/HCPCS
primary code
Basic metabolic panel ................................................................................................................................................................
Blood test, comprehensive group of blood chemicals ..............................................................................................................
Obstetric blood test panel ..........................................................................................................................................................
Blood test, lipids (cholesterol and triglycerides) ........................................................................................................................
Kidney function panel test .........................................................................................................................................................
Liver function blood test panel ..................................................................................................................................................
Manual urinalysis test with examination using microscope ......................................................................................................
Automated urinalysis test ..........................................................................................................................................................
PSA (prostate specific antigen) .................................................................................................................................................
Blood test, thyroid stimulating hormone (TSH) .........................................................................................................................
Complete blood cell count, with differential white blood cells, automated ...............................................................................
Complete blood count, automated ............................................................................................................................................
Blood test, clotting time .............................................................................................................................................................
Coagulation assessment blood test ..........................................................................................................................................
80048
80053
80055
80061
80069
80076
81000 or 81001
81002 or 81003
84153–84154
84443
85025
85027
85610
85730
Radiology services
2020 CPT/HCPCS
primary code
CT scan, head or brain, without contrast ..................................................................................................................................
MRI scan of brain before and after contrast .............................................................................................................................
X-Ray, lower back, minimum four views ...................................................................................................................................
MRI scan of lower spinal canal .................................................................................................................................................
CT scan, pelvis, with contrast ...................................................................................................................................................
MRI scan of leg joint ..................................................................................................................................................................
CT scan of abdomen and pelvis with contrast ..........................................................................................................................
Ultrasound of abdomen .............................................................................................................................................................
Abdominal ultrasound of pregnant uterus (greater or equal to 14 weeks 0 days) single or first fetus ....................................
Ultrasound pelvis through vagina ..............................................................................................................................................
Mammography of one breast ....................................................................................................................................................
Mammography of both breasts ..................................................................................................................................................
Mammography, screening, bilateral ..........................................................................................................................................
70450
70553
72110
72148
72193
73721
74177
76700
76805
76830
77065
77066
77067
Medicine and surgery services
2020 CPT/HCPCS
primary code
Cardiac valve and other major cardiothoracic procedures with cardiac catheterization with major complications or
comorbidities ..........................................................................................................................................................................
Spinal fusion except cervical without major comorbid conditions or complications (MCC) ......................................................
Major joint replacement or reattachment of lower extremity without major comorbid conditions or complications (MCC) .....
Cervical spinal fusion without comorbid conditions (CC) or major comorbid conditions or complications (MCC) ...................
Uterine and adnexa procedures for non-malignancy without comorbid conditions (CC) or major comorbid conditions or
complications (MCC) ..............................................................................................................................................................
Removal of 1 or more breast growth, open procedure .............................................................................................................
Shaving of shoulder bone using an endoscope ........................................................................................................................
Removal of one knee cartilage using an endoscope ................................................................................................................
Removal of tonsils and adenoid glands patient younger than age 12 .....................................................................................
Diagnostic examination of esophagus, stomach, and/or upper small bowel using an endoscope ..........................................
Biopsy of the esophagus, stomach, and/or upper small bowel using an endoscope ..............................................................
Diagnostic examination of large bowel using an endoscope ....................................................................................................
Biopsy of large bowel using an endoscope ..............................................................................................................................
Removal of polyps or growths of large bowel using an endoscope .........................................................................................
Ultrasound examination of lower large bowel using an endoscope .........................................................................................
Removal of gallbladder using an endoscope ............................................................................................................................
Repair of groin hernia patient age 5 years or older ..................................................................................................................
Biopsy of prostate gland ............................................................................................................................................................
Surgical removal of prostate and surrounding lymph nodes using an endoscope ...................................................................
Routine obstetric care for vaginal delivery, including pre-and post-delivery care ....................................................................
Routine obstetric care for cesarean delivery, including pre-and post-delivery care .................................................................
Routine obstetric care for vaginal delivery after prior cesarean delivery including pre-and post-delivery care .......................
Injection of substance into spinal canal of lower back or sacrum using imaging guidance .....................................................
Injections of anesthetic and/or steroid drug into lower or sacral spine nerve root using imaging guidance ...........................
Removal of recurring cataract in lens capsule using laser .......................................................................................................
Removal of cataract with insertion of lens ................................................................................................................................
Electrocardiogram, routine, with interpretation and report ........................................................................................................
Insertion of catheter into left heart for diagnosis .......................................................................................................................
Sleep study ................................................................................................................................................................................
Physical therapy, therapeutic exercise ......................................................................................................................................
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216
460
470
473
743
19120
29826
29881
42820
43235
43239
45378
45380
45385
45391
47562
49505
55700
55866
59400
59510
59610
62322–62323
64483
66821
66984
93000
93452
95810
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Federal Register / Vol. 84, No. 229 / Wednesday, November 27, 2019 / Rules and Regulations
4. Required Corresponding Data
Elements
We proposed that the consumerfriendly charge information the hospital
makes available to the public online for
the CMS and hospital-selected
shoppable services must include certain
corresponding data elements in order to
ensure that consumers understand the
hospital’s payer-specific negotiated
charge for each shoppable service and
can use that information to make
comparisons across hospitals.
Specifically, we proposed that the
consumer-friendly display of payerspecific negotiated charge information
contain the following corresponding
information for each of the 70 CMSspecified and at least 230 hospitalselected shoppable services:
• A plain-language description of
each shoppable service. For example,
hospitals would not be required, but are
invited, to review and use the Federal
plain language guidelines.159
• The payer-specific negotiated
charge that applies to each shoppable
service. If the hospital does not provide
one or more of the CMS-specified
shoppable services, the hospital may
indicate ‘‘N/A’’ for the corresponding
charge or otherwise make it clear that
the service is not provided by the
hospital. Each payer-specific charge
must be clearly associated with the
name of the third party payer.
• A list of all the associated ancillary
items and services that the hospital
provides with the shoppable service,
including the payer-specific negotiated
charge for each ancillary item or service.
• The location at which each
shoppable service is provided by the
hospital (for example, Smithville
Campus or XYZ Clinic), including
whether the payer-specific negotiated
charge for the shoppable service applies
at that location to the provision of that
shoppable service in the inpatient
setting, the outpatient department
setting, or both. If the payer-specific
negotiated charge for the shoppable
service varies based upon location or
whether the hospital provides the
shoppable service in the inpatient
versus the outpatient setting, the
hospital would be required to identify
each payer-specific negotiated charge.
• Any primary code used by the
hospital for purposes of accounting or
billing for the shoppable service,
including, but not limited to, the CPT
code, the HCPCS code, the DRG, or
other commonly used service billing
code.
159 See Federal plain language guidelines,
available at https://plainlanguage.gov/guidelines/.
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We proposed that hospitals make
public the payer-specific negotiated
charge for a shoppable service in a
manner that groups the payer-specific
negotiated charge for the primary
shoppable service along with charges for
associated ancillary services because we
believe charge information displayed in
such a way is consumer-friendly and
patient-focused. In other words, we
believe that consumers want to see and
shop for healthcare services in the way
they experience the service. We
recognized that not all hospitals will
customarily provide exactly the same
ancillary items or services with a
primary shoppable service and therefore
we believe it is important for hospitals
to display a list of which ancillary
services are included in conjunction
with or as part of the primary shoppable
service.
We proposed to codify these proposed
required data elements at proposed new
45 CFR 180.60(b). We sought public
comments on these data elements and
whether there are additional data
elements that should be displayed to the
public in a consumer-friendly manner.
We emphasized that nothing in our
proposal was meant to inhibit or restrict
hospitals from including additional data
elements that would improve the ability
of healthcare consumers to understand
the hospital’s charges for shoppable
services.
Comment: Some commenters offered
suggestions on specific data elements
they felt would be necessary to provide
consumers with accurate understanding
of the shoppable services provided by
hospitals. For example, one commenter
suggested that CMS specifically require
that hospitals list both their technical
and professional fees to provide a more
accurate picture of potential costs. The
commenter argued that including such
charges would reduce the likelihood of
surprise billing as these additional fees
often come in the form of an additional
charge or bill to consumers. The
commenter cited a new state law in
Minnesota requiring that all providerbased clinics that charge a separate
facility fee for visits give notice to
patients and publicly post a disclosure
on their website stating that patients
may receive a separate charge or billing
for the facility component, which may
result in a higher out-of-pocket expense.
Another commenter suggested the
consumer-friendly display of standard
charges should take into account costshifting and uncompensated care,
federal requirements such as EMTALA,
the availability of providers for afterhours care, and whether the provider
takes all forms of payment.
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65573
A few commenters expressed concern
that the proposal does not provide
hospitals adequate specificity as to how
the data should be formatted to ensure
that information is meaningful and
presented in a consumer-friendly
manner. Many commenters stated that
display of standard charges for
shoppable services would be incomplete
without corresponding data on
healthcare quality to allow consumers to
understand value. A few commenters
recommended requiring hospitals to
include quality information alongside
price in a meaningful way, with one
suggesting that we also draw on the
large body of research on healthcare
quality measures and presentation
format, including volume information.
The commenter, however, cautioned
that if CMS took this route, procedure
complications data would be difficult
for consumers to interpret. The
commenter recommended that
leveraging key measures already being
used in various quality efforts, in
addition to aligning measures across
public and private payers, could help
reduce consumer confusion. One
commenter urged CMS to establish a
Health Quality Roadmap in reference to
section 4 of the June 24, 2019 Executive
Order on Improving Price and Quality
Transparency to establish common
quality measurements, align inpatient
and outpatient measures, and eliminate
low-value or counterproductive
measures. The commenter suggested
that quality and outcomes data is more
valuable to patients than transparency
of hospital charges, arguing that they
provide information for patients to seek
out providers with the best track record.
The commenter stated that providing
data on readmissions, frequency or
revision surgery and mortality, and
especially elective procedures such as
total joint arthroplasty, would
encourage providers to use the best
protocols.
Several commenters indicated that
information on provider referrals as a
required element would be necessary to
decrease healthcare costs and to shift
consumers to lower cost and higher
quality options. One commenter stated
that further outreach is necessary to
determine what kinds of price
information and which methods of
display would influence consumer
behavior.
As noted in section II.D.4 of this final
rule, several commenters supported
including a definition of standard
charges to reflect the discounted cash
price that would be given to a self-pay
consumer and the de-identified
minimum and maximum negotiated
charges because they believe this
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Federal Register / Vol. 84, No. 229 / Wednesday, November 27, 2019 / Rules and Regulations
information would be beneficial and
relevant to consumers. A few
commenters believed such standard
charges could be confusing to
consumers.
Response: We recognize many state
legislatures have undertaken efforts to
reduce surprise billing and applaud
such efforts. We are finalizing as
proposed our requirement that hospitals
make public and display all ancillary
items and services they provide with the
primary shoppable service as one of the
required data elements. As part of our
requirements, hospitals would be
required to display facilities fees and
fees for services of employed clinicians.
However, in accordance with our final
policies for defining hospital items and
services (section II.C of this final rule)
hospitals would not be required to make
public the professional fees for all
clinicians practicing in hospital-based
clinics. We note that nothing in this rule
would prevent hospitals from
undertaking disclosure charges for all
clinicians practicing in a hospital-based
clinics, however, and encourage
hospitals to do so as a way of improving
price transparency for consumers.
We thank commenters for their
interest in improving consumer
awareness of quality data. We agree that
quality is a necessary consideration for
consumers deciding on how and where
to obtain the highest value medical
items and services, however, section
2718(e) of the PHS Act does not require
hospitals to disclose quality
information. We note that comparative
hospital quality information is readily
available to the public 160 and that
nothing in this final rule would prohibit
hospitals from posting quality
information along with their standard
charge information. We further note that
we included an RFI in the CY 2020
OPPS/ASC proposed rule so as to gather
feedback that we may consider for our
ongoing price transparency and valuebased initiatives.
Similarly, although data elements
such as referrals, additional places of
service, availability of the provider for
after-hours care, and what form of
payment the provider accepts are all
important considerations in driving
improvements in value care, we believe
requiring hospital disclosure of these
data elements is beyond the scope of
section 2718(e) of the PHS Act. In
addition, we believe our policies
represent a balance between data
elements that would be useful for the
public while being sensitive to
160 AHRQ website, Comparative Reports on
Hospitals, at https://www.ahrq.gov/talkingquality/
resources/comparative-reports/hospitals.html.
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hospitals’ burden in meeting
requirements. We note, however, that
nothing in this final rule would prevent
a hospital from displaying additional
data elements it believes the public
would find useful.
Finally, we are making several
modifications to the list of data
elements that hospitals would be
required to make public for its
consumer-friendly display of standard
charges.
First, we are modifying the list of data
elements to align with and include the
three new types of standard charges we
finalized in section II.D of this final
rule. Specifically, we will include the
discounted cash price, the de-identified
minimum negotiated charge, and the deidentified maximum negotiated charge,
along with other necessary conforming
changes to the list of required data
elements throughout. Specifically, we
are finalizing the following as data
elements:
• The payer-specific negotiated
charge that applies to each shoppable
service (and corresponding ancillary
services, as applicable). We clarify that
the hospital must identify and clearly
associate each set of payer-specific
negotiated charges with the name of the
third party payer and plan. For example
the hospital’s list of payer-specific
negotiated charges for Payer X’s Silver
Plan could be in one tab or column in
a spreadsheet titled ‘‘Payer X: Silver
Plan’’ while the list of payer-specific
negotiated charges for Payer Y’s Gold
Plan could be in another tab or column
titled or labeled as ‘‘Payer Y: Gold
Plan.’’
• The discounted cash price that
applies to each shoppable service (and
corresponding ancillary services, as
applicable). If the hospital does not offer
a discounted cash price for one or more
shoppable services (or corresponding
ancillary services), the hospital must list
its gross charge.
• The de-identified minimum
negotiated charge that applies to each
shoppable service (and corresponding
ancillary services, as applicable).
• The de-identified maximum
negotiated charge that applies to each
shoppable service (and corresponding
ancillary services, as applicable).
Second, in the list of data elements
related to the types of standard charges,
we are finalizing a few clarifying edits
to ensure hospital understanding that
the requirement to display the standard
charge for a shoppable service applies to
each primary shoppable service and to
each corresponding ancillary service (as
applicable). In other words, the display
of standard charges for the shoppable
service grouping means display of each
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charge of the component parts of the
shoppable service grouping (for
example, the hospital must list the
charge associated with the primary
shoppable service plus the charge(s) for
each ancillary service not already
included in the primary shoppable
service). In so doing, we are removing
the separate requirement to list all the
associated ancillary services and instead
incorporating the requirement into the
list of data elements related to the types
of standard charges.
Third, we are clarifying that if the
hospital does not offer one or more of
the 70 CMS-specified shoppable
services, the hospital must clearly
indicate that fact with respect to every
type of standard charge required for
consumer-friendly display. The hospital
may use ‘‘N/A’’ for the corresponding
charge or use another appropriate
indicator to communicate to the public
that the service is not provided by the
hospital. We are finalizing this
requirement as a separate data element.
Fourth, we are finalizing the
requirement that the hospital include a
plain-language description of each
shoppable service, as proposed. For
example, hospitals would not be
required but are invited to review and
use, the Federal plain language
guidelines.161 Fifth, we are modifying
the data element related to the location
of each shoppable service in light of the
additional types of standard charges that
hospitals must list for the shoppable
services to refer more broadly to the
‘‘standard charges’’ rather than to
‘‘payer-specific negotiated charges’’ in
each instance it appears. Specifically,
we are finalizing that the location at
which each shoppable service is
provided by the hospital (for example,
Smithville Campus or XYZ Clinic),
including whether the standard charges
for the shoppable service applies at that
location to the provision of that
shoppable service in the inpatient
setting, the outpatient department
setting, or both. If the standard charge
for the shoppable service varies based
upon location or whether the hospital
provides the shoppable service in the
inpatient versus the outpatient setting,
the hospital would be required to
identify each set of standard charges.
Finally, we are finalizing without
modification the requirement to display
any primary code used by the hospital
for purposes of accounting or billing for
the shoppable service and associated
ancillary services, including, but not
limited to, the CPT code, the HCPCS
code, the DRG, or other commonly used
161 See Federal plain language guidelines,
available at https://plainlanguage.gov/guidelines/.
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Federal Register / Vol. 84, No. 229 / Wednesday, November 27, 2019 / Rules and Regulations
service billing code. We note that, as
discussed in section II.F.3 of this final
rule, hospitals may use, as applicable,
an appropriate payer-specific billing
code (for example, an APR–DRG code)
in place of the MS–DRG code indicated
for the five procedures in the list of 70
CMS-specified shoppable services that
are identified by MS–DRG codes 216,
460, 470, 473, and 743.
Comment: Several commenters raised
concerns with the time, effort, and
technical challenges for hospitals of
posting billing and charge codes as part
of the consumer-friendly display of
standard charge data for shoppable
services. One commenter stated that the
coding elements and concepts required
do not exist or are not maintained in
hospital chargemasters, but flow to
posted charges through other interfaces.
Several commenters indicated they
believed that the size and scope of the
data that would need to be presented
would be quite large, with commenters
estimating that the resulting file could
be 300 lines long with dozens of
columns or could lead to 100,000 rows
of data with millions of fields. One
commenter indicated that the size and
complexity of the data might crash the
hospital’s website. One commenter
stated that in order to compile, display,
and maintain service packages for the
select shoppable services, a
sophisticated relational database
analysis with web-based display
modules would be necessary unless the
hospital has existing software.
Similarly, another commenter stated
that to comply with the new regulation,
it would need to work with its web
development team and EHR
management system vendor to build a
shopper functionality and benefits
engine and hire additional vendors to
maintain functionality and accuracy.
One commenter recommended that
CMS take additional time to ensure that
posting data for shoppable services is
fairly applied across provider types and
does not require an abundance of
resources. One commenter stated that
presenting their standard charge
information in a consumer-friendly
manner would be difficult for hospitals,
for example, rural hospitals and CAHs
that rely on cost-based reimbursement,
that are unable to afford a vendor for
software that would aid in the posting
of standard charge data.
Response: We acknowledge that not
all data elements required for the
display of hospital standard charges in
a consumer-friendly manner can be
derived solely from a hospital’s
chargemaster. The set of standard
charges found in the hospital
chargemaster are only one type of
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standard charges—the gross charges—
which are the undiscounted rates for
individual items and services; as
pointed out by hospitals that submitted
comments in the FY 2019 IPPS/LTCH
PPS (83 FR 41686 through 41688), the
gross charge does not apply to most
consumers of hospital services, for
example, consumers with third party
payer coverage. In other words, the
gross charge is not a standard charge for
approximately 90 percent of the
hospital’s customers who have third
party payer coverage. The set of
standard charges that applies to
consumers with third party payer
coverage are the payer-specific
negotiated charges the hospital has
established with the consumer’s third
party payer. Such charges are not a part
of the hospital’s chargemaster.
Moreover, many payer-specific standard
charges have been negotiated for service
packages, as opposed to individual
items and services that are listed in the
hospital chargemaster. Thus, the data
elements required for making public
standard charges in a consumer-friendly
manner will require hospitals to look
beyond their chargemasters and pull the
relevant data out of their other
accounting and billing systems.
Additionally, we acknowledge that
the benefits of compiling these data
elements and presenting them in a
consumer-friendly manner will likely
require more thoughtful effort on the
part of hospitals than simply making all
their standard charge information public
in a comprehensive machine-readable
file. For example, identifying and listing
the standard charges for ancillary
services along with the primary
shoppable service may take some
thought and clinical input. Translating
internal code descriptions into a
consumer-friendly plain-language
description for items and services
provided by the hospital may also
require some thought. However, we
disagree that consumer-friendly display
of hospital standard charge information
would overwhelm or ‘‘crash’’ a
hospital’s website, or that the
requirements would necessitate the
development of an elaborate or
expensive tool. As suggested in section
II.F.3 of this final rule, we believe there
are low-tech and inexpensive ways to
compile hospital standard charge
information in files posted online that
are consumer-friendly, and, in Table 2,
we have offered an example of how a
hospital might consider making such
information public.
Additionally, we note that we are
modifying our list of required data
elements to align with and reflect the
final policies related to the definition of
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65575
’’standard charge’’ as discussed in
section II.D of this final rule. As such,
the list of data elements would include
the discounted cash price, the deidentified minimum negotiated charge,
and the de-identified maximum
negotiated charge for each of the 300
shoppable services and their associated
ancillary services. Accordingly, and in
light of comments, we have increased
our burden estimate (section V of this
final rule) to reflect and recognize that
hospitals may need to put more time
and thought into ensuring that their
standard charge information is
presented in a consumer-friendly
manner than we initially believed and
to account for posting additional types
of standard charges, specifically, the
addition of the discounted cash price
and the display of the de-identified
minimum negotiated charge, and the deidentified maximum negotiated charge
for each shoppable service and
corresponding ancillary services.
Final Action: We are specifying the
data elements that hospitals must
include in their online posting of
shoppable services in order to ensure
that consumers understand the
hospital’s standard charges for each
shoppable service and can use that
information to make comparisons across
hospitals.
As noted in responses to comments,
we are making several clarifying edits
and modifications to align with final
policies including: (1) Modifications to
align with and include the three new
types of standard charges we are
finalizing in section II.D of this final
rule, (2) we are removing the separate
requirement to list all the associated
ancillary services and instead
incorporating the requirement into the
list of data elements related to the types
of standard charges, (3) finalizing as a
separate data element and clarifying that
if a hospital does not offer one or more
of the 70 CMS-specified shoppable
services, the hospital must clearly
indicate that fact with respect to every
type of standard charge required for
consumer-friendly display, and (4)
modifying the data element related to
the location of each shoppable service
in light of the additional types of
standard charges that hospitals must list
for the shoppable services to refer more
broadly to the three types of standard
charges referred to in the section, rather
than to ‘‘payer-specific negotiated
charges’’ in each instance it appears.
In summary, we are specifying in new
45 CFR 180.60(b) that hospitals must
include, as applicable, all of the
following corresponding data elements
when displaying the three types of
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standard charges for its list of shoppable
services:
• A plain-language description of
each shoppable service.
• An indicator when one or more of
the CMS-specified shoppable services
are not offered by the hospital.
• The payer-specific negotiated
charge that applies to each shoppable
service (and to each ancillary service, as
applicable). Each list of payer-specific
negotiated charges must be clearly
associated with the name of the third
party payer and plan.
• The discounted cash price that
applies to each shoppable service (and
corresponding ancillary services, as
applicable). If the hospital does not offer
a discounted cash price for one or more
shoppable services (or corresponding
ancillary services), the hospital must list
its undiscounted gross charge.
• The de-identified minimum
negotiated charge that applies to each
shoppable service (and to each
corresponding ancillary service, as
applicable).
• The de-identified maximum
negotiated charge that applies to each
shoppable service (and to each
corresponding ancillary service, as
applicable).
• The location at which the
shoppable service is provided,
including whether the standard charges
for the hospital’s shoppable service
applies at that location to the provision
of that shoppable service in the
inpatient setting, the outpatient
department setting, or both.
• Any primary code used by the
hospital for purposes of accounting or
billing for the shoppable service,
including, as applicable, the CPT code,
the HCPCS code, the DRG, or other
common service billing code.
We note that, as discussed in section
II.F.3 of this final rule, hospitals may
use, as applicable, an appropriate payerspecific billing code (for example, an
APR–DRG code) in place of the MS–
DRG code indicated for the five
procedures in the list of 70 CMSspecified shoppable services that are
identified by MS–DRG codes 216, 460,
470, 473, and 743.
5. Format of Display of ConsumerFriendly Information
In the CY 2020 OPPS/ASC proposed
rule, we indicated that we were aware
that many hospitals are already
communicating charge information to
patients in a variety of ways. Some are
already making public various types of
standard charges for shoppable services
available online in various formats. For
example, some hospitals offer
searchable price transparency tools on
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their website that offer estimated
charges (averages or individualized outof-pocket costs) or may display charges
for shoppable services in brochures
(both online and offline) that contain
self-pay discounted prices for a service
package. In the CY 2020 OPPS/ASC
proposed rule, we indicated that we
believed many hospitals are already
already meeting or exceeding our
proposed requirements by offering, for
example, patient-friendly price
transparency tools that calculate
individualized out-of-pocket cost
estimates. We sought comment on
whether offering such tools could
qualify a hospital to be excepted from
some of the proposed requirements, for
example, the consumer-friendly display
requirements (84 FR 39576).
We further noted in the CY 2020
OPPS/ASC proposed rule that because
there are a variety of consumer-friendly
ways to display charges for hospital
services and because we did not want to
restrict hospitals from innovating or
from having to duplicate efforts, we did
not propose to require hospitals to use
a specific format for making such data
public online in a consumer-friendly
manner. Specifically, unlike our
proposals for the comprehensive
machine-readable list of standard
charges for all items and services
(discussed in section II.E of this final
rule), we did not propose to require that
hospitals make payer-specific charge
data public in a single digital file posted
online. Instead, we proposed that
hospitals retain flexibility on how best
to display the payer-specific negotiated
charge data and proposed associated
data elements to the public online, so
long as the website is easily accessible
to the public. We indicated that we
believed this approach would permit
some flexibility for hospitals to, for
example, post one or more files online
with a list of payer-specific charges for
the shoppable services and associated
data elements, or, for example, to
integrate such data into existing price
estimate tools.
Additionally, we did not propose, but
considered, an option that would
require hospitals to make these data
available in API format. As explained in
more detail in section II.E.3. of this final
rule, an API enabled format could allow
consumers to access the data by
searching for it directly when they do
not have a computer by, for example,
putting a CPT code in the URL path of
the hospital to render in one’s mobile
phone browser the gross or payerspecific negotiated charge for the
service. For example, a consumer
searching for the price of a blood test for
cholesterol (CPT code 80061) at fictional
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hospital ABC could look it up by
inserting the URL path https://
hospitalABC.com/api/80061.
We further recognized not all
consumers have access to the internet.
Therefore, we proposed to require that
hospitals make certain data elements
available in a consumer-friendly manner
offline (84 FR 39589 through 39590).
Specifically, we proposed that the
hospital would provide a paper copy
(for example, a brochure or booklet) of
the information to consumers upon
request within 72 hours of the request.
We proposed to codify this provision at
proposed new 45 CFR 180.60(c).
Comment: A few commenters
expressed concern that the proposal did
not provide hospitals adequate
specificity as to how the data should be
formatted to ensure that information is
meaningful and presented in a
consumer-friendly manner.
A few commenters indicated that the
requirement to provide to the patient ‘‘a
paper copy (for example, a brochure or
booklet)’’ of the information is available
to consumers upon request within 72
hours of the request’’ would be
challenging to implement because it
would be costly and time consuming,
and the volume of data would be
enormous. Two commenters suggested
hospitals should be able to charge a fee
to cover the costs of printing a paper
copy. One commenter suggested that if
individuals do not have access to
internet, public libraries provide free
internet access to patrons. Two
commenters suggested that CMS should
permit hospitals to limit the size and
contents of the patient-requested paper
equivalent (for example, limiting the
response to the payer-specific
negotiated charges that apply to the
individual’s circumstances).
Response: In the CY 2020 OPPS/ASC
proposed rule we indicated that,
because there are a variety of consumerfriendly ways to display charges for
hospital services and because we did
not want to restrict hospitals from
innovating or from having to duplicate
efforts, we did not propose to require
hospitals to use a specific format for
making such data public online in a
consumer-friendly manner. We
therefore proposed and are finalizing a
policy that hospitals retain flexibility on
how best to display their standard
charge data and proposed associated
data elements to the public in a
consumer-friendly manner online, so
long as the online information is easily
accessible to the public. We continue to
believe that this approach would permit
some flexibility for hospitals to, for
example, post one or more files online
with a list of payer-specific charges for
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the shoppable services and associated
data elements, or, for example, to
integrate such data into existing price
estimate tools. We have included a
sample template in Table 2 as an
example of the format that would meet
our requirements, although hospitals are
not required to use this template.
Additionally, in light of our final
policy to permit hospitals flexibility to
choose an appropriate format, we are
not finalizing the proposal that the
hospital make available a paper copy.
We generally agree with commenters
who indicated that a paper format could
be burdensome, however, if we
determine that lack of a paper copy of
hospital standard charges is preventing
consumers from accessing hospital
charge information, we may revisit this
in future rulemaking.
Comment: Commenters stated that
they were concerned that consumerfriendly display of standard charges for
shoppable services might not provide
the consumer with sufficient
understanding of their actual costs, with
several commenters expressing concern
that the payer-specific negotiated charge
would differ significantly based on the
severity of the patient’s condition,
leading to variation between the amount
displayed in a consumer-friendly format
and the amount received by the hospital
from the third-party payer. Because of
this, commenters suggested that, in
order to display standard charges in a
‘‘consumer-friendly’’ format, the
information must include data on outof-pocket costs, with several
commenters stating that this
information should be specific to the
individual’s health insurance plan.
Response: We recognize the need and
desire for consumers to anticipate their
out-of-pocket costs. We believe
understanding the payer-specific
negotiated charge is a necessary first
step towards consumers having insight
into the cost of their healthcare and
being in a better position to choose the
healthcare coverage and setting that is
most advantageous to them. We expect
consumers will use the hospital
standard charge information in
conjunction and communication with
their providers and carriers to
understanding their unique cost sharing
obligations. Further, we agree that a
consumer-friendly online display of
shoppable services that would return an
immediate out-of-pocket price estimates
is preferable to a flat file of standard
charges posted online. For this reason
we considered and are finalizing as
described in more detail below, a policy
to deem a hospital price estimator tool
as meeting some of the requirements
under 45 CFR 180.60. We agree with
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commenters who indicated that
sometimes circumstances during the
course of treatment can alter price
estimates and because of this we
encourage hospitals to continue to
engage in patient education,
communication, and heightened
transparency regarding the cost
estimates they provide.
We further emphasize that hospitals
are not precluded from providing
customized one-on-one financial
counseling to consumers, and we
applaud hospitals that take the
additional step to provide this
information to consumers on an
individual basis through financial
counseling in addition to meeting the
posting requirements for the public
files.
Comment: Many commenters
indicated that many hospitals are
already communicating financial
obligations to consumers in advance in
a variety of consumer-friendly ways. For
example, several commenters stated that
many hospitals provide good faith
estimates, financial counseling services,
or have available call centers and/or
patient-friendly pricing tools on their
websites for use by patients. A few
commenters asserted that providing
patient-specific estimates, such as a
patient’s likely out-of-pocket costs based
on data provided by the patient’s
insurer, is more helpful to consumers
than sharing charges online as proposed
because such information is
personalized based on individual
circumstances.
Some commenters specifically
requested relief from one or more of the
requirements under this rule as a result
of hospital efforts to communicate
personalized out-of-pocket information.
Specifically, a few commenters
suggested that hospitals that already
provide internet-based price estimator
tools or good faith estimates to
consumers (for brevity, we henceforth
refer to such an application as a price
estimator tool) be exempt from the
requirements of the rule. For example,
one commenter suggested that if
hospitals offer tools that allow patients
to obtain out-of-pocket estimates for 300
shoppable services (including the 70
specified by CMS), they should be
considered to have met their obligations
under the rule. This commenter further
suggested that CMS could set the
expectation that hospitals opting for this
approach provide estimates for all
payers with which they have negotiated
rates. A few commenters suggested that
this flexibility to provide consumerfriendly charge information in this
manner would be beneficial for reasons
such as mitigating the risk of disclosure
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of data that some regard as trade secret
or confidential while providing the
same baseline information (gross
charges) as required under the rule as
well as more accurate information about
patients’ out of cost based on
personalized estimates from their plan
specific information. Other commenters
explained that a price estimator tool that
provides meaningful cost information to
patients would be more useful to
patients than voluminous data sets. One
commenter specifically requested that
no hospital offering a pricing tool
should be exempted from releasing the
comprehensive machine-readable data.
A few commenters noted that there
are potential limitations associated with
the information a patient receives
through consumer-friendly pricing tools
because providers cannot always
estimate what services a patient will
need, how they will respond to
treatment, and whether complications
as a result of co-morbidities or other
issues will arise that would require
additional services. For example, one
commenter noted that accurate price
estimation may depend on data
elements such as payer coverage/benefit
information, hospital/payer contract
information, physician order and
diagnosis, which may be contained in
the hospital’s EHR system.
Some commenters that supported an
exemption for hospitals that have
established a price estimator tool,
indicated that if adopted, CMS should
specify what qualifies as an acceptable
price estimator tool and made specific
suggestions for tool functionality,
although in some cases these
suggestions were made in the context of
price estimator tools that could be
offered by health insurers rather than
hospitals. Suggestions for consumerfriendly tool functionality included:
• Provide users with an estimate of
the overall cost and the out-of-pocket
costs, including out-of-pocket costs
based on an individual’s insurance
policy.
• Notify user of the availability of
financial aid, payment plans, and
assistance in enrolling for Medicaid or
state program.
• Include a disclaimer about the
limitation of the estimation, such as to
advise the user to consult with their
health insurer to confirm individual
payment responsibilities, such as
remaining deductible balances.
• Indicate quality of care in the
healthcare setting.
• Do not require PII; users would not
be required to use any form of account,
username, or password to use the price
estimator tool.
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• Make estimates available in English,
Spanish, and other languages as
preferred.
• Offer an ad hoc service where a
patient can obtain a cost estimate
telephonically and/or via email.
• Be prominently featured on the
hospital home page, and use plain and
obvious language to help ensure that
consumers can find it.
• Hospitals should advertise this tool
to patients and generate interest.
Several commenters generally
encouraged CMS to take steps to
facilitate the development and
voluntary adoption of price estimator
tools by convening stakeholders,
including the Departments of Labor and
Treasury, to identify best practices,
recommending minimum standards for
common features, and developing
solutions to common technical barriers.
Response: We appreciate commenters’
careful consideration of and detailed
suggestions for an approach for
regarding hospitals as having met the
requirement for making public their
standard charge information in a
consumer-friendly manner. In the CY
2020 OPPS/ASC proposed rule, we
noted that as a result of the January 1,
2019 update to our guidance, we
received feedback that long lists of
charges in a file posted online in a
machine-readable format may not be
immediately or directly useful for many
healthcare consumers because the
amount of data could be overwhelming
or not easily understood by consumers.
We further recognized in the CY 2020
OPPS/ASC proposed rule that hospital
standard charges, while necessary for
consumers to understand their potential
out-of-pocket obligations, are not
sufficient in and of themselves. In
section II.D of this final rule, we stated
that we agree, for example, that the
payer-specific negotiated charge does
not, in isolation, provide a patient with
an individualized out-of-pocket
estimate. We referred to the GAO
report 162 we described in the CY 2020
OPPS/ASC proposed rule which
supports our assertion that payerspecific negotiated charges are a critical
piece of information necessary for
patients to determine their potential
out-of-pocket cost obligations. In other
words, in order for an insured
individual to determine an out-ofpocket estimate in advance of
committing to a healthcare service with
a particular provider, the insured
individual must have several data
162 GAO. Health Care Price Transparency:
Meaningful Price Information Is Difficult for
Consumers to Obtain Prior to Receiving Care.
Publicly released October 24, 2011. Available at:
https://www.gao.gov/products/GAO-11-791.
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points including the total charge (which
is the payer-specific negotiated charge)
for the item or service and their
particular benefits under their insurance
plan (for example, their co-pay or
deductible) in order to determine their
personalize out-of-pocket obligation.
More often than not, patients see all this
information after the service has been
provided in the form of their EOBs. As
explained in II.D of this final rule, EOBs
are designed to communicate provider
charges and resulting patient cost
obligations, taking third party payer
insurance into account. The payerspecific negotiated charge is a critical
data point found on patient’s EOB. We
further explained that when a consumer
has access to payer-specific negotiated
charge information prior to receiving a
healthcare service (instead of sometimes
weeks or months after the fact when the
EOB arrives), in combination with
additional information from payers, it
can help the patient estimate his or her
potential out-of-pocket cost.
Because of this, in the CY 2020 OPPS/
ASC proposed rule, we considered ways
of requiring or encouraging hospitals to
make public standard charges for
frequently provided services in a form
and manner that would be more directly
accessible and consumer friendly.
Therefore, in addition to including all
their standard charges for all items and
services in the machine-readable file,
we proposed that hospitals must make
public their payer-specific negotiated
charges for common services for which
consumers may have the opportunity to
shop, in a consumer-friendly manner.
The intent of these provisions was to
ensure that the hospital standard
charges made public in the
comprehensive machine-readable file
would be more accessible to the average
consumer so that consumers could use
the information, combining it with
additional necessary benefit information
from their insurer, to estimate their
individual out-of-pocket cost obligations
in advance of receiving a healthcare
service from the hospital.
We are persuaded by commenters’
suggestions that some hospitals offering
online price estimator tools that provide
real-time individualized out-of-pocket
cost estimates should receive
consideration and potential relief from
some of the requirements for making
public standard charges, particularly as
it relates to our intent and goals for
requiring that hospitals communicate
their standard charges in a consumerfriendly manner. We believe voluntarily
offering an online price estimator tool
has merit because the hospital standard
charges as defined in this final rule are
used to develop the individual’s out-of-
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pocket estimate in an even more
consumer-friendly way than what we
proposed within the limits of our
statutory authority. We believe that
price estimator tools pick up where our
rule ends and take the additional steps
that would otherwise be required by the
consumer to determine their
individualized out-of-pocket by
combining hospital standard charge
information with the individual’s
benefit information directly from the
insurer. Thus, although some hospital
price estimator tools may not display
standard charge information in the
consumer-friendly manner in the
precise ways we proposed and are
finalizing under this rule, they do
appear to accomplish the goal and
intent of ensuring such information is
available in a consumer-friendly manner
for purposes of individuals to directly
determine their specific out-of-pocket
costs in advance of committing to a
hospital service. Thus, we believe it is
possible that hospitals with price
estimator tools could be considered as
having accomplished the goals we
intended to achieve by requiring
hospitals to repackage and display their
standard charge information for
common shoppable services in a
consumer-friendly manner. We
emphasize, however, that hospitals
would still be required to publish all
standard charges in a machine-readable
file consistent with the requirements we
finalize in section II.E of this final rule.
We are finalizing, as modifications to
our proposal, in a new 45 CFR 180.60,
that a hospital may voluntarily offer an
internet-based price estimator tool and
thereby be deemed to have met our
requirements to make public its
standard charges for selected shoppable
services in a consumer-friendly manner.
We believe this accommodation is
responsive to comments indicating that
the requirements to make public
shoppable services in a consumerfriendly format are duplicative of efforts
by hospitals that offer individualized
internet-based price estimator tools.
We considered the minimum
necessary functionality requirements a
price estimator tool must embody to
satisfy this new policy. As reflected in
the comments we received on this topic,
we recognize that different hospitals
may maintain different types of internetbased healthcare cost price estimator
tools, and that the market for, and
technology behind, these applications is
growing. Therefore, we believe it is
important to ensure there is flexibility
for the data elements, format, location
and accessibility of a price estimator
tool that would be considered to meet
the requirements of 45 CFR 180.60. We
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believe that the requirements we are
establishing in this final rule, for certain
minimum data and functionality of a
price estimator tool for purposes of
meeting the requirements under new 45
CFR 180.60, are a starting point. We
appreciate and will consider the
commenters’ suggestions that we seek
stakeholder input for future
considerations related to the price
estimator tool policies we are finalizing,
including to identify best practices,
common features, and solutions to
overcoming common technical barriers.
Therefore, we are finalizing a
modification to our proposed policy to
specify in new 45 CFR 180.60(a)(2) that
a hospital that maintains an internetbased price estimator that meets certain
criteria is deemed to have met our
requirements at 45 CFR 180.60. The
price estimator tool must:
• Allow healthcare consumers to, at
the time they use the tool, obtain an
estimate of the amount they will be
obligated to pay the hospital for the
shoppable service.
• Provide estimates for as many of the
70 CMS-specified shoppable services
that are provided by the hospital, and as
many additional hospital-selected
shoppable services as is necessary for a
combined total of at least 300 shoppable
services.
• Is prominently displayed on the
hospital’s website and be accessible
without charge and without having to
register or establish a user account or
password.
To be clear, we believe that a price
estimator tool would be considered
internet-based if it is available on an
internet website or through a mobile
application. We considered the
additional suggestions by commenters
related to ensuring that price estimator
tools are consumer-friendly. In our
review of available online price
estimator tools offered by hospitals, we
observed that their look and feel are not
uniform, so, in this final rule, and so as
not to be overly proscriptive or restrict
innovation, we are not at this time
finalizing a specific definition of a
consumer-friendly format for price
estimator tools or any additional
criteria. However, we encourage
hospitals to take note of current
estimator tool best practices and seek to
ensure the price estimator tools they
offer are maximally consumer-friendly.
For example, we encourage, but will not
require in this final rule, that hospitals
provide appropriate disclaimers in their
price estimator tools, including
acknowledging the limitation of the
estimation and advising the user to
consult, as applicable, with his or her
health insurer to confirm individual
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payment responsibilities and remaining
deductible balances. Similarly, we
encourage, but do not require in this
final rule, that hospital pricing tools
include: (1) Notification of the
availability of financial aid, payment
plans, and assistance in enrolling for
Medicaid or a state program, (2) an
indicator for the quality of care in the
healthcare setting, (3) and making the
estimates available in languages other
than English, such as Spanish and other
languages that would meet the needs of
the communities and populations the
hospital serves.
We note that although we decline to
be more prescriptive at this time, we
may in the future revisit our policy to
deem hospital online price estimator
tools as having met requirements if we
determine such tools are not meeting
our goals for making hospital charge
information meaningful to consumers.
We further note that a hospital that
meets the requirements for offering an
internet-based price estimator tool
would still be required to make public
all standard charges for all hospital
items and services online in a
comprehensive machine-readable
format as discussed in section II.E of
this final rule and finalized under 45
CFR 180.50.
Comment: A few commenters
addressed monitoring and oversight of
price transparency tools. For example,
one commenter suggested that CMS, or
another federal agency, establish
standards and require certain
disclosures for software application
developers of consumer-facing
platforms for hospital standard charge
data. This commenter expressed
concern about consumers losing faith in
cost transparency tools as they begin
interacting with them, stemming from
consumer-facing platforms that are not
presenting information accurately or not
using information appropriately.
Another commenter suggested that
standards must be in place for CMS to
monitor and evaluate the impacts of
price transparency tools, to help ensure
there are not unintended effects, and to
identify best practices. The commenter
suggested that this includes developing
a better understanding of any potential
misinterpretations of the data by
patients, as well as the extent to which
hospitals may misrepresent rates.
Response: For purposes of
implementing section 2718(e) of the
PHS Act, we will monitor and enforce
compliance with the requirements to
make public standard charges (as
described in section II.G. of this final
rule). This will include ensuring that
hospitals have made public their
standard charges in both ways required
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65579
under these rules. Specifically, we will
monitor to ensure that hospitals have
made public all their standard charges
for all items and services they provide
in a comprehensive online machinereadable file format and have either
made public standard charges for
shoppable services in a consumerfriendly format (according to the
requirements at 45 CFR 180.60), or have
voluntarily offered an online price
estimator tool. Although comments
suggesting that CMS impose monitoring
or enforcement efforts on software
application developers are beyond the
scope of the standard charge disclosure
requirements we proposed, and that we
are finalizing at new 45 CFR part 180 as
discussed in this final rule, we note that
HHS has ongoing efforts to improve
health information exchange including
through the ONC 163 and recently
promulgated proposed interoperability
rules designed to expand access to
health information and improve the
seamless exchange of data in
healthcare.164
Final Action: We are finalizing as
proposed to specify in new 45 CFR
180.60(c) that hospitals retain flexibility
on how best to display to the public
online their standard charges in a
consumer-friendly manner, so long as
the website is easily accessible to the
public.
Based on the comments received, we
are not finalizing our proposal to require
that hospitals provide a paper copy (for
example, a brochure or booklet) of
information on consumer-friendly
shoppable services to consumers upon
request within 72 hours of the request.
We are finalizing a modification to
our proposal at new 45 CFR 180.60(a)(2)
to specify that a hospital is deemed by
CMS to meet the requirements of 45
CFR 180.60 if the hospital maintains an
internet-based price estimator tool
which meets the following
requirements:
• Provides estimates for as many of
the 70 CMS-specified shoppable
services that are provided by the
hospital, and as many additional
hospital-selected shoppable services as
is necessary for a combined total of at
least 300 shoppable services.
• Allows health care consumers to, at
the time they use the tool, obtain an
estimate of the amount they will be
obligated to pay the hospital for the
shoppable service.
163 HealthIT.gov website, Laws, Regulation, and
Policy, at https://www.healthit.gov/topic/lawsregulation-and-policy.
164 CMS.gov website, Interoperability, at https://
www.cms.gov/Center/Special-Topic/
Interoperability-Center.html.
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• Is prominently displayed on the
hospital’s website and accessible to the
public without charge and without
having to register or establish a user
account or password.
provide best practices over a broad
range of web design and digital
communications issues.
We sought comment on these
proposed location and accessibility
requirements, including whether there
6. Location and Accessibility
were additional requirements that
Requirements
should be considered to ensure public
Additionally, we proposed that
access to payer-specific negotiated
hospitals make the data elements
charges for shoppable services.
proposed in section XVI.F.4. of the CY
Comment: Several commenters noted
2020 OPPS/ASC proposed rule (84 FR
the importance of making the
39589 through 39590) public online in
information easily accessible and
such a way that the standard charges
consumer-friendly. Specifically, a few
and associated data elements could be
commenters noted that it is important
easily located and accessed by
for hospitals to make this information
consumers.
easy or intuitive for lay-people to find
First, we proposed that a hospital
on the websites.
would have discretion to select an
Other commenters made
appropriate internet location to post the recommendations for requirements
standard charge information required
related to accessibility of consumerunder this section (that is, the payerfriendly hospital charge information
specific charges for shoppable services
such as:
and associated data elements). We
• Display on the website home page
further proposed that the website
and clear indicators such as ‘‘Price
location be publicly available, that the
Check’’ or ‘‘Cost Estimator’’ in the text
data be displayed prominently and
for the link, rather than terms like
clearly identify the hospital location
‘‘Tools and Resources.’’
with which the standard charge
• Conform with American with
information is associated, and that the
Disabilities Act (ADA) accessibility
standard charge data be easily
standards.
• Make information available in
accessible, without barriers, and that the
multiple languages based on the
data could be digitally searched. For
purposes of the proposed requirements: hospital’s population.
One commenter noted that rural
(1) ‘‘displayed prominently’’ meant that
consumers have less access to
the value and purpose of the web
broadband, making it more difficult for
page 165 and its content 166 is clearly
them to access this information online.
communicated, there is no reliance on
breadcrumbs 167 to help with navigation, One commenter recommended that
public outreach efforts, content
and the link to the standard charge
information is visually distinguished on generation, and coordination with
existing user channels are needed to
the web page; 168 (2) ‘‘easily accessible’’
educate and engage audiences.
meant that standard charge data are
Response: We thank commenters for
presented in format that is searchable by
their suggestions and agree that
service description, billing code, and
payer, and that the standard charge data hospitals should seek to make their
standard charge information easy or
posted on the website can be accessed
intuitive for lay-people to find on their
with the fewest number of clicks; 169
websites. We would expect hospitals to
and (3) ‘‘without barriers’’ meant the
post information in a format accessible
data can be accessed free of charge,
to people with disabilities or to
users would not have to input
otherwise ensure that individuals with
information (such as their name, email
disabilities can readily access hospital
address, or other PII) or register to
standard charge information, in
access or use the standard charge data.
We proposed to codify this requirement accordance with applicable federal or
state laws.170 We encourage hospitals to
at proposed new 45 CFR 180.50(d).
We encouraged hospitals to review
post this information in a language and
the HHS Web Standards and Usability
manner that is consumer-friendly for
Guidelines (available at: https://
their specific markets and to use terms
webstandards.hhs.gov/), which are
to refer to their standard charge
research-based and are intended to
information that are clear indicators.
While we are not finalizing any specific
165 https://webstandards.hhs.gov/guidelines/49.
requirements related to either of these
166 Nielsen J. (2003, November 9). The ten most
violated homepage design guidelines. Alertbox.
Available at: https://www.useit.com/alertbox/
20031110.html.
167 https://webstandards.hhs.gov/guidelines/78.
168 https://webstandards.hhs.gov/guidelines/88.
169 https://webstandards.hhs.gov/guidelines/181.
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170 The Americans with Disabilities Act, the
Rehabilitation Act and the ACA (see 45 CFR 92.202)
require auxiliary aids and services when needed to
communicate effectively with people with
disabilities. https://www.ada.gov/effectivecomm.pdf.
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two issues at this time, we will continue
to consider these suggestions, and
should the information prove to be
difficult to find or access, we may
revisit these in future rulemaking.
Regarding the concern related to rural
consumers being able to access online
hospital charge information, we note
that in July 2019, the Federal
Communications Commission
authorized $524 million in funding over
the next decade to expand broadband to
unserved rural homes and
businesses.171 We agree that the
availability of hospital charge
information as a result of these final
rules should be widely publicized. We
plan to engage in communicating and
publicizing these final rules and
encourage other interested stakeholders
to engage in communications strategies
to enhance public awareness of the
availability of hospital standard charge
information.
Comment: One commenter agreed that
CMS’ proposed location, accessibility,
and technical requirements would allow
patients to easily access standard charge
information for shoppable services. A
few other commenters expressed that
being able to access standard charge
information should be like comparing
prices for groceries. One commenter
suggested that hospitals clearly link the
consumer-friendly list of shoppable
services with the comprehensive
machine-readable file of all items and
services. A few commenters suggested
that there be a standardized CMS file
and web page format for displaying
standard charges for shoppable services,
arguing this would more easily enable
cost comparisons across different
facilities.
Response: We appreciate commenter’s
support for our location and
accessibility requirements and are
finalizing them as proposed. We agree
with commenters who believe that
comparing prices for healthcare services
should be as transparent as comparison
pricing in other industries. We will
continue to consider whether and how
best to link the comprehensive machinereadable file and the consumer-friendly
display of shoppable services. We agree
that an exemplar template (not one that
we will presently require) would be
beneficial to help standardize format for
displaying charges for shoppable
services in a consumer-friendly format,
and we have included such examples in
this final rule. However, as explained in
II.F.5 of this final rule, we believe
171 FCC. FCC Authorizes $524 Million for Rural
Broadband Expansion in 23 States. News Release,
July 15, 2019. Available at: https://www.fcc.gov/
document/fcc-authorizes-524-million-ruralbroadband-expansion-23-states.
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hospitals should retain flexibility to
determine a format that displays charges
for their shoppable services in a
consumer-friendly manner.
Comment: A few commenters
suggested that patients needed to be
able to access standard charge
information for shoppable services
through a secure portal that is password
protected, and that the secure portal be
tied to their actual health plan coverage
while minimizing the risk that other
providers will demand higher rates from
payers.
Response: We thank the commenters
for their recommendation. However, in
the interest of keeping access to the
consumer-friendly display of shoppable
services barrier-free, we disagree with
requiring hospitals to develop a secure
portal. As part of the requirements for
making standard charges public,
hospitals would not post any PII to the
internet and consumers would not be
asked to provide any in order to view
payer-specific negotiated charges.
Final Action: We are finalizing with
technical modification our requirements
for location and accessibility of
information on consumer-friendly
shoppable services. Specifically, we are
finalizing with modification that a
hospital must select an appropriate
publicly available internet location for
purposes of making public the standard
charge information for shoppable
services in a consumer-friendly format.
We are also finalizing with technical
modification that the information must
be displayed in a prominent manner
that identifies the hospital location with
which the standard charge information
is associated.
Finally, we are finalizing with
technical modification the shoppable
services information must be easily
accessible, without barriers, including,
but not limited to, ensuring the
information is: (i) Free of charge; (ii)
accessible without having to register or
establish a user account or password;
(iii) accessible without having to submit
PII; (iv) searchable by service
description, billing code, and payer. We
note that we would expect hospitals
would post information in a format
accessible to people with disabilities or
to otherwise ensure that individuals
with disabilities can readily access
hospital standard charge information, in
accordance with any applicable federal
or state laws.
These final provisions are specified in
new 45 CFR 180.60(d).
7. Frequency of Updates
The statute requires hospitals to
establish, update, and make public their
standard charges for each year.
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Therefore, we proposed to require
hospitals to make public and update the
standard charge information proposed
in section XVI.F.2 (84 FR 39585 through
39586) at least once annually (proposed
new 45 CFR 180.60(e)). We recognized
that hospital charges may change more
frequently and therefore we encouraged
(but are not requiring) hospitals to
update this file more often, as
appropriate, so that the public may have
access to the most up-to-date charge
information. We also recognized that
hospitals update their charges at
different times during the year and may
also have various State price
transparency reporting requirements
that require updates. For purposes of
these requirements, we believe that
updates that occur at least once in a 12month period will satisfy our proposed
requirement to update at least once
annually and reduce reporting burden
for hospitals. In other words, the
hospital could make public and update
its list of standard charges at any point
in time during the year, so long as the
update to the charge data occurs no
more than 12 months after posting.
We also proposed to require hospitals
to clearly indicate the date of the last
update they have made to the standard
charge data, with some discretion as to
where the date of late update is
indicated.
Comment: A few commenters
disagreed that annually updating the
display of standard charges in the
consumer-friendly format would be
sufficient to keep consumers apprised of
costs. Commenters recommended more
frequent updates, citing frequent
changes in commercial payer rates. One
commenter recommended requiring
hospitals to update this information in
real time to avoid the possibility of
misleading patients with calendarrelated gaming around the disclosure of
rate hikes or true prices.
Response: We appreciate the
commenters’ concerns and we agree that
timely updates are an important aspect
of keeping information relevant to
consumers and avoiding confusion, but
we believe the plain language of section
2718(e) of the PHS Act currently limits
the requirement to make standard
charges public to once annually. We
strongly support and encourage hospital
efforts to make more frequent updates to
the standard charge information they
make public online.
Final Action: We are finalizing as
proposed a policy to require hospitals to
make public and update the standard
charge information at least once
annually (proposed new 45 CFR
180.60(e)). We are also finalizing as
proposed a requirement that the
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hospital clearly indicate the date that
the information was most recently
updated. Hospitals would have some
discretion as to where the date of late
update is indicated.
G. Monitoring and Enforcement of
Requirements for Making Standard
Charges Public
1. Background
Section 2718(b)(3) of the PHS Act
requires the Secretary to promulgate
regulations to enforce the provisions of
section 2718 of the PHS Act, and, in so
doing, the Secretary may provide for
appropriate penalties. As such, we
proposed that we may impose penalties
on hospitals that fail to make their
standard charges public in accordance
with the requirements we finalize under
section 2718(e) of the PHS Act. In the
FY 2019 IPPS/LTCH PPS proposed rule
(83 FR 20549), we sought public
comments on a variety of issues related
to enforcement of the requirement that
hospitals make public their standard
charges and noted our intent to address
enforcement and other actions to ensure
compliance in future rulemaking.
We specifically sought comments on
the following:
• What is the most appropriate
mechanism for CMS to enforce price
transparency requirements?
• Should CMS require hospitals to
attest to meeting requirements in the
provider agreement or elsewhere?
• How should CMS assess hospital
compliance?
• Should CMS publicize complaints
regarding access to price information or
review hospital compliance and post
results? What is the most effective way
for CMS to publicize information
regarding hospitals that fail to comply?
• Should CMS impose CMPs on
hospitals that fail to make standard
charges publicly available as required
by section 2718(e) of the PHS Act?
• Should CMS use a framework
similar to the Federal civil penalties
under 45 CFR 158.601 through 158.615,
that apply to issuers that fail to report
information and pay rebates related to
medical loss ratios (MLRs), as required
by sections 2718(a) and (b) of the PHS
Act, or would a different framework be
more appropriate?
As described in the CY 2020 OPPS/
ASC proposed rule (84 FR 39591), we
received a number of comments in
response to this RFI. Many commenters
agreed that enforcing this requirement
under section 2718(e) of the PHS Act
would send an important signal that
CMS values transparency and ensure
that the public has access to hospital
charge information. Some commenters
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suggested that CMS model enforcement
after various quality reporting programs,
such as the Hospital Inpatient and
Outpatient Quality Reporting Programs
or the LTCH Quality Reporting Program.
Some commenters recommended
publicizing noncompliant hospitals or
providing a mechanism for the public to
file complaints against noncompliant
hospitals. Some commenters suggested
that CMS propose to make the
publication of standard charges a
Medicare condition of participation or
provider enrollment. However, one
commenter indicated that revoking a
provider agreement over lack of a
website disclosure would be
unnecessarily punitive. Other
commenters warned that subjecting
hospitals violating pricing transparency
provisions to compliance actions could
pose a challenge, particularly for
smaller hospitals, and recommended
limiting or deferring compliance actions
to a later date. Some commenters agreed
that imposing monetary penalties on
noncompliant hospitals was
appropriate, while other commenters
believed that CMS does not have
authority to enforce section 2718(e) of
the PHS Act and, for that reason, should
not adopt penalties for noncompliance.
We stated in the CY 2020 OPPS/ASC
proposed rule that we agree with
commenters who noted that an
enforcement regime signals the value we
place on price transparency and
assurance of public access to hospital
standard charges. We interpret section
2718(b)(3) of the PHS Act as authorizing
us to enforce the provisions of section
2718(e). Therefore, we proposed to
adopt mechanisms to monitor and
enforce our requirements for making
standard charges public.
2. Monitoring Methods
Section 2718(e) of the PHS Act
requires hospitals to make public their
list of standard charges and authorizes
the Secretary to promulgate additional
criteria that hospitals must satisfy in
order to make such charges public. The
statute does not prescribe monitoring
procedures or the factors we should
consider in imposing penalties on
hospitals for noncompliance. Based on
our experience with the Medicare
program and healthcare marketplace
plans, we believe it is important for the
public to be informed, and, therefore,
for CMS to ensure compliance with this
statutory requirement. Therefore, we
proposed to employ methods to monitor
and assess hospital compliance with
section 2718(e) of the PHS Act, and
specifically proposed new 45 CFR
180.40, 180.50, and 180.60.
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In general, we proposed that CMS
may use methods to monitor hospital
compliance with the requirements
under proposed 45 CFR part 180. As
explained in the CY 2020 OPPS/ASC
proposed rule, we anticipate relying
predominantly on complaints made to
CMS by individuals or entities regarding
a hospital’s potential noncompliance.
Therefore, we proposed that our
monitoring methods may include, but
are not limited to, the following, as
appropriate:
• CMS’ evaluation of complaints
made by individuals or entities to CMS.
• CMS review of individuals’ or
entities’ analysis of noncompliance.
As we gain experience with
monitoring compliance with the
requirements for proposed 45 CFR part
180, we may consider self-initiating
audits of hospitals’ websites as a
monitoring method. Therefore, we
proposed that our monitoring methods
may include CMS audit of hospitals’
websites.
We proposed to set forth these
monitoring methods in the regulations
at proposed new 45 CFR 180.70.
Comment: A few commenters
suggested that the monitoring and
enforcement requirements for making
standard charges public should be well
defined and robust. A few commenters
agreed with CMS’ proposal to rely
mainly on complaints made to CMS by
individuals or entities regarding a
hospital’s noncompliance, as well as
CMS audits of hospitals’ websites. One
commenter stated that the proposed
approach seems reasonable and that the
monitoring methods and proposed
actions to address noncompliance are
appropriately varied and iterative.
A commenter suggested that positive
and effective enforcement is needed,
such as encouraging community
policing efforts that strive for prevention
of a problem, and believes this approach
could create a more transparent hospital
reimbursement system for the public.
A few commenters suggested that the
burden of monitoring and enforcement
may outweigh its benefits, and one
commenter suggested that CMS
withdraw altogether its proposed price
transparency requirements, including
the enforcement processes and CMPs for
noncompliance, because of concerns
about additional costs of compliance the
proposed price transparency policies
pose for financially fragile rural safety
net providers, in particular Medicare
Dependent Hospitals, Rural Referral
Centers, and SCHs. One commenter
stated that monitoring is a purposeless
task.
Response: We appreciate the support
of commenters favoring the proposed
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approach to monitoring for compliance
with the requirements for hospitals to
make public standard charges. We
disagree with the notion, expressed by
one commenter, that monitoring
hospitals for compliance with these
price transparency disclosure
requirements is a purposeless task and
that its potential burden outweighs its
potential benefits. We do, however,
appreciate commenters’ concerns about
the potential additional burden that
monitoring activities may pose for
hospitals, though we do not believe the
monitoring burden will impact hospitals
unless they are not in compliance with
the requirements.
We decline to altogether forgo
enforcement processes and CMPs for
noncompliance as suggested by one
commenter. We believe that
enforcement of the policies is vital to
ensuring that hospitals comply with the
requirements to make public standard
charges. Given the importance of
ensuring that patients have access to
data they need to make informed
healthcare decisions, we believe
monitoring hospitals’ compliance with
the requirements of new 45 CFR part
180 is critical. Therefore, we are
finalizing our proposed monitoring
methods. Further, we believe it is
important to consistently apply the
monitoring and enforcement provisions
across all entities that meet the
definition of ‘‘hospital’’ that we are
finalizing (as discussed in section II.B.2
of this final rule), regardless of factors
such as hospital size, revenue, or
location.
In response to the commenter
suggesting a community policing
approach that strives for prevention of
compliance problems, we note that the
monitoring methods we are finalizing
here include CMS’ reliance on receipt of
complaints made by individuals or
entities to help inform CMS of potential
issues so that CMS may initiate its own
analyses, or CMS review of individuals’
or entities’ analysis of noncompliance.
Further actions to address hospital
noncompliance as described in section
II.G.3 of this final rule include CMS’
issuance of a written warning notice to
a noncompliant hospital and CMS’
requests for a CAP from a hospital in the
event its noncompliance constitutes a
material violation of one or more
requirements. This approach
contemplates that noncompliant
hospitals will be offered opportunities
to come into compliance with the
requirements prior to the imposition of
a CMP. Further, we note that these final
policies do not preclude individuals or
entities from raising their compliance
concerns directly with hospitals, and for
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hospitals to voluntarily address
disclosure deficiencies.
Comment: A few commenters
addressed the scope of CMS’ monitoring
of hospital compliance to make public
standard charges. A few commenters
expressed support for meaningful
oversight and enforcement by CMS to
ensure the quality and accuracy of the
standard charge information hospitals
are required to disclose pursuant to this
rule. One commenter recommended that
CMS should have a system in place to
ensure that rates are being updated
regularly in accordance with the
requirements.
Response: We appreciate commenters’
support for and interest in CMS’
monitoring activities. In response to
comments regarding the scope of CMS’
proposed monitoring of hospitals with
respect to compliance with these
requirements to make public standard
charges, we believe our authority is
broad and includes, for example, our
ability to monitor the accuracy of the
information made public, and whether
the information is made public in the
form and manner and with the
frequency specified in this final rule.
According to the monitoring methods
we are finalizing in this final rule, we
anticipate relying on complaints made
by individuals or entities, or
individuals’ or entities’ analysis of
noncompliance, as the basis for being
notified about inaccuracies in the
information made public by hospitals.
To be clear, such notifications would
not directly underlie an enforcement
action. Rather, such notifications would
merely trigger our independent analysis
and conclusions, of which
complainant’s allegations or analyses
may become a part, that would underlie
any potential enforcement action.
Pursuant to the monitoring methods we
finalize here, we may also self-initiate
the audit of a hospital’s website. We
anticipate that our review for
inaccuracies in reported information
would be for egregious and obvious
instances of noncompliance, such as (in
the extreme) all items and services made
public by a hospital having the same
value, or no value at all. Further we
decline the commenters’ suggestion to
establish an additional, or different
process, to monitor and take actions to
address noncompliance in the form of
inaccurate data. We anticipate
consistently applying our monitoring
and enforcement methods when
addressing all types of possible
violations. As we describe in section
II.G.3 of this final rule, we may provide
a written warning notice to a
noncompliant hospital, request a CAP
from a hospital if the noncompliance
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constitutes a material violation of one or
more requirements, impose a CMP on
the hospital if the hospital fails to
respond to CMS’ request to submit a
CAP or comply with the requirements of
a CAP, and publicize the notice of
imposition of a CMP on a CMS website.
Comment: A few commenters
suggested, as an alternative approach,
that hospitals should be required to
report to CMS on their compliance with
the requirements. For example,
commenters’ suggestions included that
hospitals should be required to notify
CMS of their adherence to price
transparency requirements at regular
intervals, or that hospitals should be
required to submit a form to CMS to
prove adherence with the requirements.
A few commenters suggested that CMS
require hospitals to attest that they are
in compliance with the rule. One
commenter explained that requiring
such an attestation would put hospitals
at risk of implicating the federal False
Claims Act and associated penalties if
they were determined to be
noncompliant.
One commenter, seeming to
misinterpret the President’s Executive
Order 13877 on ‘‘Improving Price and
Quality Transparency in American
Healthcare to Put Patients First’’ (June
24, 2019), suggested a requirement may
exist for hospitals to establish a
monitoring mechanism to ensure
compliance with the price list posting
requirement.
Response: We read the final sentence
of section 3(a) of Executive Order 13877
to indicate two separate requirements
related to the regulation requiring
hospitals to publicly post standard
charge information; specifically, that the
regulation should: (1) Require hospitals
to regularly update the posted
information, and (2) establish a
monitoring mechanism for the Secretary
to ensure compliance with the posting
requirement, as needed. We believe that
(2) means that HHS should establish a
monitoring mechanism to ensure
hospitals’ compliance with the posting
requirements.
At this time, we decline to adopt
commenters’ suggestions that we require
hospitals to report or attest to CMS their
compliance with these requirements,
but as we gain experience with
monitoring hospital compliance with
the policies we finalize here, we may
revisit these issues in future rulemaking.
Comment: A few commenters stated
that it is critical for CMS to implement
a process for individuals to report
noncompliance. One commenter
expressed concern over the potential
lack of guidance on how individuals or
entities would report to CMS a
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hospital’s noncompliance with the price
transparency requirements. In
comments on this topic, commenters
suggested a variety of methods for how
a complaint should be reported to CMS
and subsequent actions CMS should
take in processing the complaint.
Response: We have established an
email address,
PriceTransparencyHospitalCharges@
cms.hhs.gov, through which individuals
and entities may report to CMS
concerns about hospital compliance
with requirements to make public
standard charges, including complaints
about and analysis of noncompliance.
Comment: Several commenters
encouraged CMS to develop robust
auditing procedures rather than relying
solely on patients to know how to and
take steps to report violations.
Response: To clarify, we proposed
that monitoring methods include, but
are not limited to, CMS’ evaluation of
complaints made by individuals or
entities, CMS review of individuals’ or
entities’ analysis of noncompliance, and
CMS audit of hospitals’ websites. We
agree with the commenters that CMS
audit of hospitals may be an important
method for monitoring hospitals
compliance with the requirements of
new 45 CFR part 180.
Comment: Several commenters
suggested that CMS work closely with
hospitals to ensure they are aware of
and understand CMS’ monitoring
mechanisms. One commenter suggested
that CMS ensure both inpatient and
outpatient providers have sufficient
education and training required for
compliance with the proposals. Several
commenters suggested that CMS use
education and outreach methods that
exist within Medicare FFS to promote
hospital awareness of and promote
compliance with the requirements to
make public standard charges.
Response: We thank commenters for
their suggestions, and we will consider
these suggestions for education and
outreach about compliance as we gain
experience monitoring hospital
compliance with these requirements to
make public standard charges. We note
that the suggestions of a few
commenters focused on methods for
education and outreach in relation to
the Medicare program, but that the price
transparency requirements are not
limited to Medicare enrolled hospitals.
Final Action: After considering the
comments received on our proposed
approach to monitor hospital
compliance with the requirements to
make public standard charges, we are
finalizing our proposal to evaluate
whether a hospital has complied with
the requirements under §§ 180.40,
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180.50, and 180.60. We are also
finalizing as proposed that the
monitoring methods for determining a
hospital’s compliance with the
requirements for making public
standard charges may include, but are
not limited to, the following, as
appropriate:
• CMS’ evaluation of complaints
made by individuals or entities to CMS.
• CMS review of individuals’ or
entities’ analysis of noncompliance.
• CMS audit of hospitals’ websites.
We are finalizing our proposal to set
forth these monitoring methods in the
regulations at new 45 CFR 180.70.
3. Actions To Address Hospital
Noncompliance With Requirements To
Make Public Standard Charges
We proposed that hospitals that CMS
identifies as noncompliant would be
notified of their deficiencies and given
an opportunity to take corrective action
to come into compliance. As discussed
in section II.G.4. of this final rule, for
hospitals determined by CMS to be
noncompliant with section 2718(e) of
the PHS Act that fail to respond to CMS’
requests to submit a CAP or comply
with the requirements of a CAP, we
proposed that we may impose CMPs
and publicize these penalties on a CMS
website.
Should we conclude, based upon the
proposed monitoring activities
previously described, that a hospital is
noncompliant with section 2718(e) of
the PHS Act and the requirements of
proposed 45 CFR part 180, we proposed
that CMS may take any of the following
actions, which generally, but not
necessarily, would occur in this order:
• We may provide a written warning
notice to the hospital of the specific
violation(s).
• We would request a CAP from the
hospital if its noncompliance
constitutes a material violation of one or
more requirements.
• If the hospital fails to respond to
CMS’ request to submit a CAP or
comply with the requirements of a CAP,
CMS may impose a CMP on the hospital
and publicize the penalty on a CMS
website.
As discussed in the CY 2020 OPPS/
ASC proposed rule (84 FR 39592), prior
to requesting a CAP, or in the case of
violations that are deemed nonmaterial
violations warranting a CAP, CMS
anticipates warning, via written notice,
a hospital of noncompliance with one or
more of the requirements to make public
standard charges (according to section
2718(e) of the PHS Act and the
requirements of proposed 45 CFR part
180), and of the need for voluntary
corrective action. We would then
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reevaluate the hospital’s compliance
with the statutory and proposed
regulatory requirements. Should we
determine the hospital remains
noncompliant and that the
noncompliance constitutes a material
violation of one or more requirements,
we anticipate requiring that the hospital
submit a CAP, and there would be
increasing consequences for failure to
remedy noncompliance.
We proposed that a material violation
may include, but is not limited to, the
following:
• A hospital’s failure to make public
its standard charges required by
proposed new 45 CFR 180.40.
• A hospital’s failure to make public
its standard charges in the form and
manner required under to proposed new
45 CFR 180.50 and 180.60.
We proposed that CMS may request
that a hospital submit a CAP, specified
in a notice of violation issued by CMS
to a hospital. A hospital required to
submit a CAP must do so, in the form
and manner, and by the deadline,
specified in the notice of violation
issued by CMS to the hospital and must
comply with the requirements of the
CAP.
We proposed that a hospital’s CAP
must specify elements including, but
not limited to, the deficiency or
deficiencies that caused noncompliance
to occur, the corrective actions or
processes the hospital will take to come
into compliance with the requirements
of 45 CFR part 180, and the timeframe
by which the hospital will complete the
corrective action. We proposed that a
CAP would be subject to CMS review
and approval. We proposed that after
CMS’ review and approval of a
hospital’s CAP, CMS may monitor and
evaluate the hospital’s compliance with
the corrective actions.
We proposed that a hospital’s failure
to respond to CMS’ request to submit a
CAP includes failure to submit a CAP in
the form, manner, or by the deadline,
specified in a notice of violation issued
by CMS to the hospital. We proposed
that a hospital’s failure to comply with
the requirements of a CAP includes
failure to correct violation(s) within the
specified timeframes.
We proposed to set forth in the
regulations at proposed new 45 CFR
180.70 the actions CMS may take to
address a hospital’s noncompliance
with the requirements to make public
standard charges, and to set forth in
proposed new 45 CFR 180.80 the
requirements for a CAP.
Comment: A few commenters offered
suggestions on the process for CMS and
hospitals to address potential
noncompliance. One commenter
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expressed concern over the potential
lack of guidance regarding the process
CMS will use to investigate a complaint
about a hospital’s noncompliance with
the price transparency requirements and
request corrective action by a hospital.
Another commenter stated that any
penalties for noncompliance should not
be accrued until the hospital has
adequate time to respond to complaints.
The commenter suggested, at a
minimum, a six-month time frame for
responding to and resolving the issues
brought forward via a complaint.
Response: The regulations we are
finalizing at new 45 CFR 180.70 specify
the actions CMS will take to address
hospital noncompliance. We anticipate
that the specifics of each compliance
action may depend on the
circumstances of the complaint, CMS’
determination of noncompliance, and
the severity of the violation(s).
Comment: One commenter expressed
support for a policy under which CMS
would request a CAP before imposing a
CMP.
Response: We appreciate the support
of the commenter favoring the proposed
approach.
Comment: A few commenters
indicated it was unclear what would
constitute the basis for a finding of a
material violation for CMS to determine
it is necessary to request a CAP. One of
these commenters recommended that
CMS further delineate its expectations
and grounds under which a CMP is
warranted to avoid a system of arbitrary
and capricious actions by CMS to
penalize hospitals.
These commenters stated that it is
unclear what would constitute a finding
of noncompliance with a required
public disclosure of standard charges or
noncompliance with disclosure in the
form and manner required by CMS. One
commenter specifically asked whether a
hospital would only be cited as
noncompliant after repeated violations
or egregious violations or whether
technical issues with formatting and
posting of pricing data, including
computer server issues, constitute an
actionable violation. Another
commenter asked if a hospital would be
found noncompliant if a hospital made
a good faith effort to publish data as
required by CMS, but found some
requirements impossible to meet. This
commenter asked whether a CMP would
be imposed on a hospital for failing to
achieve something impractical based
merely on web-surfing by federal
employees absent consumer complaints.
Response: We believe these comments
reflect concerns that hospitals will have
limited opportunity to take corrective
action prior to the imposition of a CMP.
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As described in the CY 2020 OPPS/ASC
proposed rule (as discussed above),
prior to requesting a CAP for a material
violation, CMS may issue a written
warning notice so that the hospital may
take voluntary corrective action to
become compliant. We could then
reevaluate the hospital’s compliance
with the statutory and proposed
regulatory requirements. Should we
determine the hospital remains
noncompliant and that the
noncompliance constitutes a material
violation of one or more requirements,
we anticipate requiring that the hospital
submit a CAP. We may impose a CMP
on a hospital identified as noncompliant
that fails to respond to CMS’ request to
submit a CAP or comply with the
requirements of a CAP.
We further considered the proposed
requirements for a CAP. Upon closer
review we believe our proposals to
require a hospital to specify in its CAP
(i) the deficiency or deficiencies that
caused noncompliance to occur, and (ii)
the corrective actions or processes the
hospital will take to come into
compliance with the requirements of
this part, among other elements, could
raise due process considerations. In
particular, the phrasing of these
proposed elements suggest that in
developing a CAP, the hospital must
concur with CMS’ finding(s) of
noncompliance. This would be
potentially problematic for a hospital in
the event it seeks to dispute CMS’
findings of noncompliance. Therefore,
we are finalizing with modification to
specify instead that a hospital’s CAP
must include, among other elements, a
description of the corrective actions the
hospital will take to address the
deficiency or deficiencies identified by
CMS. We believe this provision
provides hospitals greater flexibility to
specify in their CAP considerations
about CMS’ findings of noncompliance,
in addition to actions to address such
findings. We anticipate working with
hospitals on an individual basis during
the corrective action process to address
concerns with CMS’ findings and
concerns about meeting the
requirements.
Comment: Many commenters
indicated that implementation by
January 1, 2020 would not provide
enough time to comply with
requirements and suggested that CMS
consider finalizing an effective date
beyond January 1, 2020, or otherwise
permit delay or postponement of
implementation. Several commenters
expressed concern with the complexity
of the data extract needed to meet the
CY 2020 OPPS/ASC proposed rule’s
requirements, as well as the availability
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of that data within existing online
systems or the need to divert hospital
personnel to create the files manually
given a lack of contract management
system.
One commenter expressed that, for
those hospitals unable to afford a
vendor, the staff labor cost will be
astronomical and the likelihood of
completing this ‘‘herculean’’ task prior
to January 1, 2020, will be very low.
This commenter suggested a
postponement of the posting of
negotiated rates for small rural and
critical access hospitals until affordable
software is developed and made
available to assist with this task.
Another commenter explained that an
effective date of January 1, 2020 would
not afford hospitals enough time to
evaluate consulting services, contract
management systems, or hire additional
personnel to fulfill these requirements.
Commenters suggested a variety of
alternative effective dates. For example,
one commenter suggested an effective
date of April 2020 or later, a few
commenters suggested requiring
implementation by January 1, 2021, and
one commenter stated it would take a
minimum of 2 years to become
compliant.
One commenter expressed concern
that CMS proposed ‘‘an invasive and
highly punitive’’ monitoring and
enforcement regime, up to and
including CAPs and CMPs, that would
take effect January 1, 2020.
Response: We agree with commenters
that some hospitals may find it
challenging to initially comply with the
new requirements of 45 CFR part 180 in
a short timeframe, and may need time
beyond January 2020 to develop the
capacity to meet the new requirements.
We also recognize that hospitals vary in
the extent to which they already make
public standard charge information
similar to the data we are requiring
hospitals to make public with this final
rule. For instance, some hospitals may
already comply with similar
requirements under state laws, or
already voluntarily make such
information public and would,
therefore, be able to quickly comply
with the new requirements.
In light of these considerations, we
are finalizing a modification to extend
the effective date of policies under new
45 CFR part 180 to January 1, 2021. We
believe this duration of delay balances
the concerns between providing
additional time for hospitals to
implement the new requirements while
still ensuring that hospitals’ standard
charges are made public quickly to
provide consumers access to this
important information. We decline to
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create a different effective date for a
subset of hospitals, such as rural
hospitals, to delay price transparency
requirements as we believe the hospital
price transparency requirements we
finalize here are important to informing
all consumers’ healthcare decisionmaking.
In the meantime, we note that existing
CMS guidance requires that hospitals
make public their gross charges for
items and services as found in the
chargemaster online in a machinereadable format. We note that this
guidance remains in effect until the
effective date of the regulations we are
establishing with this final rule, which
is January 1, 2021.
Comment: A few commenters
suggested that CMS take a phased
approach to enforcement of the
requirements for hospitals to make
public standard charges. A few
commenters, concerned about the
excessive burden imposed by CMS’
proposed requirements and the time it
may take hospitals to develop the
capacity to become compliant,
suggested a grace period prior to the
imposition of a CMP for noncompliance.
A few commenters suggested that CMS
phase-in the proposed monitoring and
enforcement actions over several years.
One commenter recommended that
CMS’ enforcement actions should begin
by publicizing the names of hospitals
determined to be noncompliant
(referred to by the commenter as ‘‘name
and shame’’) prior to giving these
hospitals a chance to take corrective
action, and then progress to requesting
a CAP after several years. According to
this commenter, if the implementation
of CAPs does not induce full
compliance after a few years then CMPs
might be prudent.
Response: We believe the monitoring
methods we are finalizing as described
in Section II.G.2 of this final rule and
the actions to address hospital
noncompliance described in this section
are necessary to ensure compliance. We
believe the proposed monitoring
methods and enforcement actions give
CMS the flexibility to employ a number
of methods to be notified of, and
investigate, hospital noncompliance,
and allow CMS to take enforcement
actions that escalate through stages. We
believe the proposed approaches to
addressing noncompliance, in which
CMS (in sequence) issues a written
warning notice, requests a CAP if the
hospital’s noncompliance constitutes a
material violation of one or more
requirements, and imposes a CMP on
the hospital and publicizes the penalty
on a CMS website, allows multiple
opportunities for hospitals to take
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corrective action over a period of time
so that they may avoid imposition of a
CMP. We decline the commenters’
suggestions that we further phase-in the
enforcement actions over a number of
years, or to establish an approach that
routinely provides hospitals a number
of years to remedy their noncompliance.
We considered the commenter’s
suggestion to expand our authority to
publicize hospitals determined to be
noncompliant with the requirements to
make public standard charges. We
believe that publicizing a hospital’s
noncompliance, prior to imposing a
CMP (for example), could be an effective
tool to raise public awareness of
incomplete hospital data (for example),
and could encourage hospitals to
promptly remedy their violation(s) to
avoid being publicly identified as
noncompliant. However, at this time,
we are finalizing our proposal to
publicize on a CMS website the notice
of imposition of a CMP. We may revisit
through future rulemaking the timing
for and approach by which CMS
publicizes its determination of a
hospital’s noncompliance with the
requirements to make public standard
charges.
Final Action: After considering the
comments received, we are finalizing as
proposed to set forth in the regulations
at new 45 CFR 180.70, actions to
address hospital noncompliance with
the requirements to make public
standard charges. We are finalizing that
CMS may take any of the following
actions, which generally, but not
necessarily, will occur in the following
order if CMS determines the hospital is
noncompliant with section 2718(e) of
the PHS Act and the requirements of 45
CFR part 180:
• Provide a written warning notice to
the hospital of the specific violation(s).
• Request a CAP from the hospital if
its noncompliance constitutes a material
violation of one or more requirements.
• Impose a CMP on the hospital and
publicize the penalty on a CMS website
if the hospital fails to respond to CMS’
request to submit a CAP or comply with
the requirements of a CAP.
We are finalizing with modifications
to set forth in new 45 CFR 180.80 the
requirements for CAPs. Specifically, we
are finalizing as proposed to specify in
45 CFR 180.80(a) that a hospital may be
required to submit a CAP if CMS
determines a hospital’s noncompliance
constitutes a material violation of one or
more requirements, which may include,
but is not limited to, the following:
• A hospital’s failure to make public
its standard charges required by new 45
CFR 180.40.
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• A hospital’s failure to make public
its standard charges in the form and
manner required under new 45 CFR
180.50 and 180.60.
We are finalizing as proposed to
specify in 45 CFR 180.80(b), CMS may
request that a hospital submit a CAP,
specified in a notice of violation issued
by CMS to a hospital.
We are finalizing our proposals,
except as noted otherwise, to specify in
45 CFR 180.80(c) the following
provisions related to CAPs:
• A hospital required to submit a CAP
must do so, in the form and manner,
and by the deadline, specified in the
notice of violation issued by CMS to the
hospital and must comply with the
requirements of the CAP.
• We are finalizing modifications that
a hospital’s CAP must specify elements
including, but not limited to the
corrective actions or processes the
hospital will take to address the
deficiency or deficiencies identified by
CMS, and the timeframe by which the
hospital will complete the corrective
action.
• A CAP is subject to CMS review
and approval. After CMS’ review and
approval of a hospital’s CAP, CMS may
monitor and evaluate the hospital’s
compliance with the corrective actions.
We are finalizing as proposed to
specify in 45 CFR 180.80(d) provisions
for identifying a hospital’s
noncompliance with CAP requests and
requirements:
• A hospital’s failure to respond to
CMS’ request to submit a CAP includes
failure to submit a CAP in the form,
manner, or by the deadline, specified in
a notice of violation issued by CMS to
the hospital.
• A hospital’s failure to comply with
the requirements of a CAP includes
failure to correct violation(s) within the
specified timeframes.
We are finalizing a modification to
extend the effective date of the final
policies to January 1, 2021.
4. Civil Monetary Penalties
We proposed that we may impose a
CMP on a hospital that we identify as
noncompliant with the requirements of
proposed 45 CFR part 180, and that fails
to respond to CMS’ request to submit a
CAP or comply with the requirements of
a CAP as we describe earlier.
We proposed that we may impose a
CMP upon a hospital for a violation of
each requirement of proposed 45 CFR
part 180. The maximum daily dollar
amount for a CMP to which a hospital
may be subject would be $300. We
proposed that even if a hospital is in
violation of multiple discrete
requirements of proposed 45 CFR part
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180, the maximum total sum that a
single hospital may be assessed per day
is $300.
Further, we proposed to adjust the
CMP amount annually by applying the
cost-of-living adjustment multiplier
determined by the Office of
Management and Budget (OMB) for
adjusting applicable CMP amounts
pursuant to the Federal Civil Penalties
Inflation Adjustment Act Improvements
Act of 2015. This multiplier, based on
the Consumer Price Index for All Urban
Consumers (CPI–U), not seasonally
adjusted, is applied to the CMPs in 45
CFR 102.3. For instance, the cost-ofliving adjustment multiplier for 2018,
based on the CPI–U for the month of
October 2017, not seasonally adjusted,
was 1.02041 (83 FR 51369).
As discussed in the CY 2020 OPPS/
ASC proposed rule, given the
importance of compliance with the
price transparency policies, we believe
this proposed CMP amount strikes a
balance between penalties that are
sufficiently harsh to incentivize
compliance but not excessively
punitive. We reviewed CMP amounts
for other CMS programs that require
reporting information and we believe
our proposed $300 maximum daily
dollar amount for a CMP is
commensurate with the level of severity
of the potential violation, taking into
consideration that nondisclosure of
standard charges does not rise to the
level of harm to the public as other
violations (such as safety and quality
issues) for which CMS imposes CMPs
and, therefore, should remain at a
relatively lower level.
We considered applying lower and
higher maximum dollar amounts for a
CMP for noncompliance with the
requirements of proposed 45 CFR part
180. For example, we considered that
CMS has imposed $100 per day penalty
amounts with respect to other
compliance matters, such as where
health insurers fail to comply with
premium revenue reporting and rebate
requirements found at 45 CFR 158.606.
The basis for the CMPs under 45 CFR
158.606 is the number of individuals
affected. With respect to the disclosure
requirements under proposed 45 CFR
part 180, where the lack of information
could affect an unknown number of
consumers and in myriad ways (for
example, not just individuals who paid
more for items and services), we noted
our belief that it would not be feasible
to utilize a ‘‘per person’’ type basis. We
also considered proposing higher
maximum daily dollar amounts, such as
$400 per day, $500 per day or more.
Further, we considered establishing a
cumulative annual total limit for the
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CMP to which a hospital is subject for
noncompliance with proposed 45 CFR
part 180. For example, we considered
applying a cumulative annual total limit
of $100,000 per hospital for each
calendar year. However, such an
approach could, for example, prevent
accrual of additional penalties on
hospitals that remain noncompliant for
multiple years.
If CMS imposes a penalty in
accordance with the requirements of
proposed 45 CFR part 180, we proposed
that CMS provide a written notice of
imposition of a CMP to the hospital via
certified mail or another form of
traceable carrier. This notice may
include, but would not be limited to, the
following:
• The basis for the hospital’s
noncompliance, including, but not
limited to, the following: CMS’
determination as to which
requirement(s) the hospital violated;
and the hospital’s failure to respond to
CMS’ request to submit a CAP or
comply with the requirements of a CAP.
• CMS’ determination as to the
effective date for the violation(s). This
date would be the latest date of the
following:
++ The first day the hospital is
required to meet the requirements of
proposed 45 CFR part 180.
++ If a hospital previously met the
requirements of this part but did not
update the information annually as
required, the date 12 months after the
date of the last annual update specified
in information posted by the hospital.
++ A date determined by CMS, such
as one resulting from monitoring
activities specified in proposed new 45
CFR 180.70, or development of a CAP as
specified in proposed new 45 CFR
180.80.
• The amount of the penalty as of the
date of the notice.
• A statement that a CMP may
continue to be imposed for continuing
violation(s).
• Payment instructions.
• Intent to publicize the hospital’s
noncompliance and CMS’ determination
to impose a CMP on the hospital for
noncompliance with the requirements
of proposed 45 CFR part 180 by posting
the notice of imposition of a CMP on a
CMS website.
• A statement of the hospital’s right
to a hearing (as described in section
II.H. of this final rule).
• A statement that the hospital’s
failure to request a hearing within 30
calendar days of the issuance of the
notice permits the imposition of the
penalty, and any subsequent penalties
pursuant to continuing violations,
without right of appeal.
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Further, in the event that a hospital
elects to appeal the penalty, and if the
CMP is upheld only in part by a final
and binding decision, we proposed that
CMS would issue a modified notice of
imposition of a CMP.
We proposed that a hospital must pay
a CMP in full within 60 calendar days
after the date of the notice of imposition
of a CMP from CMS. In the event a
hospital requests a hearing (as described
in section II.H. of this final rule), we
proposed that the hospital must pay the
amount in full within 60 calendar days
after the date of a final and binding
decision to uphold, in whole or in part,
the CMP. We also proposed that if the
60th calendar day is a weekend or a
Federal holiday, then the timeframe is
extended until the end of the next
business day.
We also proposed to publicize, by
posting on a CMS website, our notice of
imposition of a CMP on a hospital for
noncompliance with these
requirements, and any subsequently
issued notice of imposition of a CMP for
continuing violations. In the event that
a hospital requests a hearing, we
proposed that CMS would indicate in its
posting that the CMP is under review.
If the CMP amount is upheld, in whole,
by a final and binding decision, we
would maintain the posting of the
notice of imposition of a CMP on a CMS
website. If the CMP is upheld, in part,
by a final and binding decision, we
would issue a modified notice of
imposition of a CMP, and would make
this modified notice public on a CMS
website. If the CMP is overturned in full
by a final and binding decision, we
would remove the notice of imposition
of a CMP from a CMS website.
In addition, we proposed that CMS
may issue subsequent notice(s) of
imposition of a CMP, as described in
this section of the CY 2020 OPPS/ASC
proposed rule, that result from the same
instance(s) of noncompliance.
We proposed to set forth in proposed
new 45 CFR 180.90 the proposed CMPs
for hospitals determined by CMS to be
noncompliant with requirements for
making standard charges public.
We sought comment on whether the
proposed amount of a CMP, in
combination with making public on a
CMS website our notice of imposition of
a CMP, were reasonable and sufficient
to ensure hospitals’ compliance with the
proposed requirements to make public
standard charges. We were interested in
public comments on our proposed $300
maximum daily dollar amount for a
CMP for noncompliance with section
2718(e) of the PHS Act and proposed 45
CFR part 180. In particular, we sought
comment on whether we should impose
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stronger penalties for noncompliance, or
whether we should further limit the
maximum amount of penalty we would
impose on a hospital for a calendar year
and the methodology for creating such
a limit (for instance through limiting the
maximum daily penalty amount, by
establishing a cumulative annual total
limit on the penalty amount, or both).
We sought comment on unintended
consequences of the proposed penalties
for noncompliance. We also sought
commenters’ suggestions on whether
other penalties should be applied for
noncompliance with section 2718(e) of
the PHS Act.
Comment: Several commenters stated
that the imposition of CMPs for
noncompliance with the requirements
to make standard public charges
exceeds CMS’ authority under section
2718(e) of the PHS Act. These
commenters challenged CMS’ reliance
on section 2718(b)(3) as the basis for
enforcing the requirements that
hospitals make their standard charges
public, and specifically as the basis for
imposing a CMP on a hospital for
noncompliance with the requirements
to make public standard charges. These
commenters asserted that section
2718(b)(3) applies only to the MLR and
rebate requirements imposed by the
ACA on health insurance issuers
offering group or individual health
insurance coverage under section 2718
of the PHS Act. A few commenters
explained that had Congress intended to
require the Secretary to enforce the
requirement for public availability of
hospital standard charge information, it
would have constructed the provisions
of section 2718 of the PHS Act
differently. A few commenters
presented a review of the legislative
history of section 2718 of the PHS Act,
suggesting that the phrasing of section
2718(b)(3), referring to its applicability
to ‘‘this section,’’ was a drafting error,
and suggested that Congress intended to
apply this provision only to MLR
provisions within the section. A few
commenters further asserted that absent
an express mandate for the Secretary in
section 2718(b)(3) of the PHS Act to
enforce the requirements for hospitals to
disclose their standard charges under a
different provision of law (namely,
section 2718(e)), the Secretary may
neither imply an intent to do so nor
reverse its previous rulemaking policy
that limited the use of that enforcement
authority to issuers that do not comply
with MLR and rebate requirements
imposed under section 2718(b). One
commenter explained that interpreting
section 2718(b)(3) of the PHS Act as
CMS does leads to an absurd result.
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A few commenters explained that
HHS has not previously suggested that
it could take enforcement action with
respect to section 2718(e) of the PHS
Act, which the commenters suggest
means the agency lacked such powers.
Specifically, one commenter suggested
that HHS implicitly recognized that its
enforcement authority under section
2718(b)(3) of the PHS Act should be
read as confined to enforcing the MLR
requirements when it adopted subparts
D through F of 45 CFR part 158, stating
that these provisions implement
enforcement authority in section
2718(b)(3) and provide for enforcement
of the reporting obligations set forth in
section 2718(a) and rebate requirements
in section 2718(b). Another commenter
expressed that CMS has not previously
asserted its ability to assess CMPs under
section 2718(b)(3) of the PHS Act on
noncompliant hospitals, or previously
claimed any enforcement authority
related to section 2718(e) of the PHS
Act.
Response: We continue to believe
section 2718(b)(3) of the PHS Act, based
on its plain meaning, authorizes the
Secretary to enforce the provisions of
section 2718 of the PHS Act and to
provide for appropriate penalties under
section 2718 of the PHS Act, including
section 2718(e) of the PHS Act. It is not
absurd to say that Congress wanted to
provide HHS authority more generally
to enforce all of the requirements set out
in section 2718. Further, HHS has not
previously conceded that it lacked
authority to issue such rules for
enforcing, or penalties pursuant to,
section 2718(e) of the PHS Act in
promulgating regulations pursuant to
sections 2718(a) and (b). In fact, as we
explained in earlier rulemaking, we
have been considering developing
regulations, through notice and
comment rulemaking, to establish
enforcement mechanisms to address
hospital noncompliance with section
2718(e) (83 FR 20548 through 20550; 83
FR 41686 through 41688).
Therefore, consistent with our
proposal, we continue to believe we
have the legal basis to impose penalties
on hospitals that fail to make their
standard charges public in accordance
with the requirements we finalize under
section 2718(e) of the PHS Act.
Accordingly, as described in this section
and elsewhere in this final rule, we are
finalizing our proposals to enforce the
requirements under new 45 CFR part
180, and to potentially impose CMPs for
noncompliance with the requirements
of new 45 CFR part 180.
Comment: A few commenters
supported CMS’ efforts to take
enforcement actions and a few
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commenters supported the proposal to
impose financially significant CMPs on
large hospitals for noncompliance with
the requirements to make public
standard charges. A few commenters
suggested that CMS forgo imposition of
CMPs altogether while others suggested
that CMS limit use of CMPs
(particularly to avoid excessive financial
penalties) or not impose CMPs on
certain types of providers, such as IRFs
or rural hospitals.
Several commenters explained that
the proposed CMPs were overly
punitive, and suggested CMS forgo
imposing CMPs. One commenter
explained that CMPs are typically
reserved for fraud and abuse, and
opposed imposition of CMPs for price
transparency requirement
noncompliance, which is more likely to
be based in technical difficulties or IT
system limitations. A few commenters
cited concerns about imposing CMPs on
noncompliant hospitals in light of the
complexity of making public standard
charge data and the short timeframe by
which hospitals would have to come
into compliance. One commenter
explained that it is not necessary to
impose CMPs for noncompliance with
price transparency requirements given
that hospitals have undertaken
numerous initiatives to enhance price
transparency in recent years, and that
they are making significant progress in
this complex area.
Response: We appreciate commenters
supporting the importance of
enforcement actions and the imposition
of CMPs on hospitals as a method for
ensuring compliance with the
requirements to make public standard
charges. We decline the commenters’
suggestions that we not finalize the
proposed use of CMPs as an
enforcement mechanism. Given the
importance of the requirements for
hospitals to make public standard
charges, we believe CMPs serve as an
appropriate enforcement action to
address noncompliance. As we
explained in Section II.G.2. of this final
rule, we believe it is important that we
apply a consistent approach to imposing
CMPs on noncompliant hospitals across
all entities, regardless of factors such as
hospital size, revenue or location.
Therefore, we decline to adopt the
commenters’ suggestions that we apply
alternative policies to a subset of
hospitals, such as rural safety net
providers. Further, we disagree with the
commenter’s suggestion that we forgo
establishing the authority to impose
CMPs for noncompliance in light of the
demonstrated commitment to price
transparency by some, but not all,
institutions.
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We respond to comments on the
amount of CMPs elsewhere in this
section of this final rule. Under the
actions to address hospital
noncompliance which we are finalizing
in this final rule, we anticipate that
hospitals would have the opportunity to
take corrective action prior to the
imposition of a penalty. As we have
described elsewhere in Section II.G of
this final rule, prior to imposing a CMP
on a hospital, we anticipate issuing a
written warning notice and requesting a
CAP from the hospital as initial steps to
promote compliance. We may impose a
CMP on a noncompliant hospital if it
fails to respond to CMS’ request to
submit a CAP or comply with the
requirements of a CAP. By complying
with the requirements, a hospital can
avoid financial penalties. We also note
that hospitals determined to be
noncompliant, and subject to a CMP,
can avoid accruing larger amounts of
CMPs by coming into compliance with
the requirements.
Comment: Comments on the amount
of the CMP were mostly polarized, with
some suggesting lower amounts and
other suggesting higher amounts than
the proposed $300 maximum daily
dollar amount for a CMP. A recurring
concern in comments was that the CMP
amount could be overly burdensome
and potentially detrimental to the
continued operation of a small hospital
with low margins, particularly CAHs,
while posing an inadequate incentive
for hospitals (particularly larger
hospitals) to comply because the CMP
amount does not pose a real financial
burden. As one commenter explained, a
large hospital could decide that $300
per day ($109,500 per year) is worth
paying in order to not disclose
information that could lead to payers
with higher rates wanting to pay them
less in light of discovering other payers
have more favorable negotiated rates. A
few commenters suggested that the
proposed CMP amount is trivial for
certain hospitals, compared, for
instance, to the salaries of hospital
executives, or the hospital’s total
revenue. One commenter expressed
concern that stakeholders will view the
noncompliance penalty as a new
business expense rather than an
incentive to comply with the
transparency requirements. Another
commenter explained that the proposed
CMP amount is too low to compel
hospitals to comply if they are
adamantly opposed to making public
this information.
Another commenter noted that under
the PAMA and 42 CFR 414.504(e),
applicable laboratories that do not
report applicable information as
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required may be subject to a CMP in an
amount of up to $10,000 per day for
each failure to report or each
misrepresentation or omission in
reporting. The commenter suggested
that compliance with these data
reporting requirements was below
expectations; therefore, the commenter
suggested that it would be unlikely that
the proposed $300 maximum daily
dollar amount for a CMP would be
sufficient to encourage prompt reporting
of pricing data by hospitals.
One commenter suggested that CMS
increase the CMP amount,
recommending the penalties be
consistent with information blocking
penalties (according to section 4004 of
the 21st Century Cures Act), which can
be up to $1 million per violation (which
we note is applicable to health IT
developers, health information
networks, and health information
exchanges),172 explaining that failure to
disclose price information would be
information blocking.
A few commenters suggested
alternative approaches, such as using
factors that allow for scaling of the CMP
amount. In particular, a few of these
commenters suggested scaling penalties
to ensure rural hospitals are not unduly
burdened. For example, one commenter
suggested that CMPs should be adjusted
based on bed size and rural or urban
designation. Another commenter
suggested that CMS consider scaling the
penalty based on the number of patients
treated at the facility within a given
year. If this information is not available
due to lack of data on patients who selfpay or are insured by non-government
payers, the commenter suggested that
CMS scale the CMP amount according
to the number of Medicare beneficiaries
served in a given year. The commenter
explained this approach could allow
CMS to not overly penalize smaller
hospitals while also providing a
sufficient incentive for hospitals to
comply.
Response: We appreciate the
comments received on the proposed
$300 maximum daily dollar amount for
a CMP. Given that commenters tended
to be divided between those in favor of
lower and higher amounts, we believe
the proposed amount strikes an
appropriate balance between these
concerns, and we are therefore
finalizing this amount as proposed.
The $300 maximum daily dollar
amount for a CMP for noncompliance
with 45 CFR part 180 is lower than
CMPs imposed under certain other
172 Refer to HealthIT.gov, Information Blocking,
available at https://www.healthit.gov/topic/
information-blocking.
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authorities administered by HHS
agencies, where an entity’s
noncompliance poses immediate
jeopardy, results in actual harm, or both.
We believe the relatively lower amount
for a CMP, for a hospital’s
noncompliance with requirements to
make public standard charges, is
reasonable since failure to make this
information available is less serious
than noncompliance that poses or
results in harm to a patient.
At this time, and given the nature of
potential noncompliance with the
requirements we are finalizing for
hospitals to make public standard
charges, we decline to impose penalties
higher than the proposed amount. We
decline to impose the higher penalties
that are applicable to health IT
developers, health information
networks, and health information
exchanges for information blocking
under the 21st Century Cures Act, for
interfering with, preventing, or
materially discouraging access,
exchange, or use of electronic health
information. We also decline to impose
a potentially higher CMP amount, such
as is applicable to laboratories under
PAMA, for noncompliance with
reporting information which could
affect payment rate setting by CMS.
We also note that the $300 maximum
daily dollar amount, when accrued over
a year, is higher than our estimate of the
cost per hospital to comply with the
requirements to make public standard
charges in the initial period of
implementation (as described in Section
V of this final rule). We considered
commenters’ concerns that a relatively
lower CMP amount may be insufficient
to encourage compliance if the cost of
making public standard charges, or the
value to the hospital of not disclosing
standard charge data, is higher than the
total annual amount of the CMP. For
this reason, we believe it is important to
maintain a sufficiently sizeable CMP
sum and therefore decline commenters’
suggestions to finalize a maximum daily
dollar amount for a CMP that is less
than $300.
We appreciate the commenters’
concerns that some hospitals may prefer
to forgo meeting the requirements of 45
CFR part 180 (for example, to not
expend resources on reporting or to
protect pricing information they
consider sensitive), and, instead, face
compliance actions including a $300
maximum daily dollar amount for a
CMP. We decline at this time to increase
the amount of the CMP based on this
concern alone, but as we gain
experience with implementing the
policy we intend to monitor for such
occurrences, and may revisit the need to
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65589
adjust the amount of the CMP in future
rulemaking.
We would need to further evaluate the
feasibility of implementing a sliding
scale CMP approach across institutions
that meet the definition of hospital
according to new 45 CFR 180.20 (as
discussed in section II.B of this final
rule). We believe it would be especially
challenging to find a reliable source of
data that provides for a scalable factor
across all institutions that meet the
definition of hospital. Therefore, we
decline the commenters’ suggestions to
scale the CMP amount based on such
factors as hospital bed size, location or
patient volume. However, we anticipate
that we will continue to consider this
issue, and may revisit use of a CMP
scaling methodology in future
rulemaking. At this time, we are
finalizing as proposed a policy that
allows for a standardized daily
maximum CMP amount.
Comment: One commenter supported
the alternative we described in the CY
2020 OPPS/ASC proposed rule, which
was to apply a cumulative annual total
limit (or cap) on the penalty amount,
though the commenter did not specify
what this limit should be and suggested
only that it be a reasonable amount.
Response: We believe we have struck
an appropriate balance in determining
the $300 maximum daily dollar amount
for a CMP, and we therefore decline at
this time to finalize applying a
cumulative annual total limit on the
CMP amount. We appreciate the
commenter’s support for this alternative
approach.
Comment: One commenter disagreed
with the proposal that CMS publicize
the notice of imposition of a CMP on a
CMS website, explaining that this
amounted to public shaming which the
commenter believes has no benefit and
seems petty.
Response: We continue to believe it is
appropriate to publish the notice of
imposition of a CMP on a CMS website
to identify hospitals determined to be
noncompliant with the requirements to
make public standard charges. We
believe this information will help
inform the public of noncompliant
hospitals and is an opportunity to
demonstrate the outcome of CMS’
monitoring and enforcement activities
for these important requirements.
Final Action: After considering the
comments received, we are finalizing as
proposed policies for imposing a CMP
on a hospital that we identify as
noncompliant with the requirements of
45 CFR part 180, and that fails to
respond to CMS’ request to submit a
CAP or comply with the requirements of
a CAP.
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We are finalizing as proposed that
CMS may impose a CMP upon a
hospital for a violation of each
requirement of 45 CFR part 180.
Further, we are finalizing our proposal
that the maximum daily dollar amount
for a CMP to which a hospital may be
subject is $300, even if the hospital is
in violation of multiple discrete
requirements of 45 CFR part 180. The
amount of the CMP will be adjusted
annually using the multiplier
determined by OMB for annually
adjusting CMP amounts under 45 CFR
part 102.
We are finalizing as proposed that
CMS provides a written notice of
imposition of a CMP to the hospital via
certified mail or another form of
traceable carrier. We are also finalizing
as proposed the elements of this notice
to the hospital, as previously described
in this section of this final rule, will
include but not be limited to the
following:
• The basis for the hospital’s
noncompliance, including, but not
limited to, the following: CMS’
determination as to which
requirement(s) the hospital has violated;
and the hospital’s failure to respond to
CMS’ request to submit a CAP or
comply with the requirements of a CAP.
• CMS’ determination as to the
effective date for the violation(s).
• The amount of the penalty as of the
date of the notice.
• A statement that a CMP may
continue to be imposed for continuing
violation(s).
• Payment instructions.
• Intent to publicize the hospital’s
noncompliance and CMS’ determination
to impose a CMP on the hospital for
noncompliance with the requirements
of 45 CFR part 180 by posting the notice
of imposition of a CMP on a CMS
website.
• A statement of the hospital’s right
to a hearing according to subpart D of
45 CFR part 180 (as discussed in section
II.H of this final rule).
• A statement that the hospital’s
failure to request a hearing within 30
calendar days of the issuance of the
notice permits the imposition of the
penalty, and any subsequent penalties
pursuant to continuing violations,
without right of appeal.
We are finalizing our proposal that
CMS may issue subsequent notice(s) of
imposition of a CMP, according to the
aforementioned requirements (in short,
where investigation reveals there is
continuing justification), that result
from the same instance(s) of
noncompliance.
We are finalizing with a clarifying
modification that, in the event that a
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hospital elects to appeal the penalty,
and if the CMP is upheld, in part, by a
final and binding decision, CMS will
issue a modified notice of imposition of
a CMP, to conform to the adjudicated
finding.
We are also finalizing our proposals
on timing of payment of a CMP.
Specifically, a hospital must pay the
CMP in full within 60 calendar days
after the date of the notice of imposition
of a CMP from CMS. In the event a
hospital requests a hearing, pursuant to
subpart D of 45 CFR part 180, the
hospital must pay the amount in full
within 60 calendar days after the date of
a final and binding decision to uphold,
in whole or in part, the CMP. If the 60th
calendar day is a weekend or a Federal
holiday, then the timeframe is extended
until the end of the next business day.
We are finalizing as proposed that
CMS will post the notice of imposition
of a CMP on a CMS website, including
the initial notice of imposition of a
CMP, and subsequent notice(s) of
imposition of a CMP that result from the
same instance(s) of noncompliance.
Further, in the event that a hospital
elects to request a hearing, pursuant to
subpart D of 45 CFR part 180, CMS will
indicate in its posting that the CMP is
under review. We are finalizing the
following policies regarding the posting
of the notice of imposition of a CMP,
pursuant to a final and binding decision
from the hearing process specified in
subpart D of 45 CFR part 180:
• We are finalizing as proposed, CMS
will maintain the posting of the notice
of imposition of a CMP on a CMS
website if the CMP is upheld, in whole.
• We are finalizing with a clarifying
modification, CMS will issue a modified
notice of imposition of a CMP, to
conform to the adjudicated finding, if
the CMP is upheld, in part. CMS will
make this modified notice public on a
CMS website.
• We are finalizing as proposed, CMS
will remove the notice of imposition of
a CMP from a CMS website if the CMP
is overturned in full.
We are finalizing our proposal to
specify these policies on CMPs in new
45 CFR 180.90.
H. Appeals Process
Under section 2718(b)(3) of the PHS
Act, we proposed to impose penalties
on hospitals that fail to make their
standard charges public in accordance
with the requirements we finalize under
section 2718(e). As we described in the
CY 2020 OPPS/ASC proposed rule (84
FR 39593 through 39594), we believe it
is important to establish a fair
administrative process by which a
hospital may appeal CMS’ decisions to
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impose penalties under section
2718(b)(3) regarding the hospital’s
noncompliance with the requirements
of section 2718(e) of the PHS Act and
the requirements of proposed 45 CFR
part 180. Through various Medicare
programs, we have gained experience
with administrative hearings and other
processes to review CMS’
determinations.
We proposed to align the procedures
for the appeals process with the
procedures established under section
2718(b)(3) of the PHS Act for an issuer
to appeal a CMP imposed by HHS for its
failure to report information and pay
rebates related to MLRs, as required by
sections 2718(a) and (b) of the PHS Act,
and according to 45 CFR parts 158 and
150. Therefore, we proposed that a
hospital upon which CMS has imposed
a penalty under proposed 45 CFR part
180 may appeal that penalty in
accordance with 45 CFR part 150,
subpart D, except as we have otherwise
proposed.
Generally, under this proposed
approach, a hospital upon which CMS
has imposed a penalty may request a
hearing before an Administrative Law
Judge (ALJ) of that penalty. The
Administrator of CMS, at his or her
discretion, may review in whole or in
part the ALJ’s decision. A hospital
against which a final order imposing a
CMP is entered may obtain judicial
review.
For purposes of applying the appeals
procedures at 45 CFR part 150 to
appeals of CMPs under proposed 45
CFR part 180, we proposed the
following exceptions to the provisions
of 45 CFR part 150:
• Civil money penalty means a civil
monetary penalty according to proposed
new 45 CFR 180.90.
• Respondent means a hospital that
received a notice of imposition of a CMP
according to proposed new 45 CFR
180.90(b).
• References to a notice of assessment
or proposed assessment, or notice of
proposed determination of CMPs, are
considered to be references to the notice
of imposition of a CMP specified in
proposed new 45 CFR 180.90(b).
• Under 45 CFR 150.417(b), in
deciding whether the amount of a civil
money penalty is reasonable, the ALJ
may only consider evidence of record
relating to the following:
++ The hospital’s posting(s) of its
standard charges, if available.
++ Material the hospital timely
previously submitted to CMS (including
with respect to corrective actions and
CAPs).
++ Material CMS used to monitor and
assess the hospital’s compliance
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according to proposed new 45 CFR
180.70(a)(2).
• The ALJ’s consideration of evidence
of acts other than those at issue in the
instant case under 45 CFR 150.445(g)
does not apply.
We proposed to set forth in proposed
new 45 CFR 180.100 the proposed
procedures for a hospital to appeal the
CMP imposed by CMS for its
noncompliance with the requirements
of proposed 45 CFR part 180.
We also proposed to set forth in
proposed new 45 CFR 180.110 the
consequences for failure of a hospital to
request a hearing. If a hospital does not
request a hearing within 30 calendar
days of the issuance of the notice of
imposition of a CMP described in
proposed new 45 CFR 180.90(b), we
proposed that CMS may impose the
CMP indicated in such notice and may
impose additional penalties pursuant to
continuing violations according to
proposed new 45 CFR 180.90(f) without
right of appeal. We proposed that if the
30th calendar day is a weekend or a
Federal holiday, then the timeframe is
extended until the end of the next
business day. We also proposed that the
hospital has no right to appeal a penalty
with respect to which it has not
requested a hearing in accordance with
45 CFR 150.405, unless the hospital can
show good cause, as determined at 45
CFR 150.405(b), for failing to timely
exercise its right to a hearing.
Alternatively, we considered and
sought public comment on following a
process for appealing CMPs similar to
the approach specified in 42 CFR part
498, subparts D through F. We
explained that there are differences
between the appeals procedures at 42
CFR part 498 compared to 45 CFR part
150. Under the regulations at 42 CFR
part 498, for example, either party
dissatisfied with a hearing decision by
the ALJ may request Departmental
Appeals Board review of the ALJ’s
decision.
Final Action: We received no
comments on our proposed process for
a hospital upon which CMS has
imposed a penalty under proposed 45
CFR part 180 to appeal that penalty in
accordance with 45 CFR part 150,
subpart D, except as we otherwise
proposed. We are finalizing as proposed
to specify in new 45 CFR 180.100 the
procedures for a hospital to appeal the
CMP imposed by CMS for its
noncompliance with the requirements
of 45 CFR part 180 to an ALJ, and for
the Administrator of CMS, at his or her
discretion, to review in whole or in part
the ALJ’s decision. Specifically, we are
finalizing our proposal that a hospital
upon which CMS has imposed a penalty
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under 45 CFR part 180 may appeal that
penalty in accordance with 45 CFR part
150, subpart D, with the exceptions (for
the propose of applying the provisions
of part 150 to CMPs under part 180) as
described in this section of this final
rule.
We are also finalizing as proposed to
set forth in new 45 CFR 180.110 the
consequences for failure of a hospital to
request a hearing. If a hospital does not
request a hearing within 30 calendar
days of the issuance of the notice of
imposition of a CMP described in new
45 CFR 180.90(b), CMS may impose the
CMP indicated in such notice and may
impose additional penalties pursuant to
continuing violations according to new
45 CFR 180.90(f) without right of
appeal. If the 30th calendar day is a
weekend or a Federal holiday, then the
timeframe is extended until the end of
the next business day. The hospital has
no right to appeal a penalty with respect
to which it has not requested a hearing
in accordance with 45 CFR 150.405,
unless the hospital can show good
cause, as determined at 45 CFR
150.405(b), for failing to timely exercise
its right to a hearing.
III. Comments Received in Response To
Request for Information: Quality
Measurement Relating To Price
Transparency for Improving
Beneficiary Access to Provider and
Supplier Charge Information
In the CY 2020 OPPS/ASC proposed
rule (84 FR 39594 through 39595), we
included a RFI related to (1) access to
quality information for third parties and
healthcare entities to use when
developing price transparency tools and
when communicating charges for
healthcare services, and (2) improving
incentives and assessing the ability of
healthcare providers and suppliers to
communicate and share charge
information with patients. We received
approximately 63 timely pieces of
correspondence on this RFI. We
appreciate the input provided by
commenters.
IV. Collection of Information
Requirements
A. Response to Comments
Under the Paperwork Reduction Act
of 1995 (PRA), we are required to
provide 60-day notice in the Federal
Register and solicit public comment
before a collection of information
requirement is submitted to the OMB for
review and approval.
We solicited comments in the CY
2020 OPPS/ASC notice of proposed
rulemaking that published in the August
9, 2019 Federal Register (84 FR 39398).
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65591
For the purpose of transparency, we are
republishing the discussion of the
information collection requirements
(ICR) along with a reconciliation of the
public comments we received.
B. ICR for Hospital Price Transparency
In this final rule, we seek to promote
price transparency in hospital standard
charges to implement section 2718(e) of
the PHS Act. We believe that in doing
so, healthcare costs will decrease, and
consumers can be empowered to make
more informed decisions about their
healthcare. We believe these finalized
requirements will represent an
important step towards putting
consumers at the center of their
healthcare and ensuring they have
access to needed information.
In the CY 2020 OPPS/ASC proposed
rule, we noted that hospitals in the
United States maintain chargemasters, a
list of their gross charges for all
individual items and services as part of
their standard billing and business
practices.173 Additionally, we stated
that most hospitals maintain electronic
data on charges they negotiate with
third party payers for hospital items and
services as well as service packages. As
such, we indicated we believed that the
burden for making this information
publicly available would be minimal
and estimated only a small burden for
each hospital to extract, review, and
conform the posting of gross charges
and third party payer-specific
negotiated charges for all hospital items
and services in the comprehensive
machine-readable format. In addition,
we estimated some burden associated
with hospitals making public their
payer-specific negotiated charges for a
set of at least 300 (70 CMS-specified and
at least 230 hospital-selected) shoppable
services in a consumer-friendly manner,
with flexibility for hospitals to
determine the most consumer-friendly
format. We proposed a policy that
hospitals would display the charge for
the primary shoppable service along
with charges for any ancillary services
the hospital customarily provides in
conjunction with the primary shoppable
service.
We estimated the proposed
requirements would apply to 6,002
hospitals operating within the United
States under the proposed definition of
‘‘hospital.’’ To estimate this number, we
subtracted 208 federally-owned or
operated hospitals from the total
173 Batty M. and Ippolito B. Mystery of The
Chargemaster: Examining The Role Of Hospital List
Prices in What Patients Actually Pay. Health
Affairs. April 2017; 36(4): 689–696. Available at:
https://www.healthaffairs.org/doi/10.1377/
hlthaff.2016.0986.
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number of U.S. hospitals, 6,210
hospitals 174 (6,210 total hospitals—208
federally-owned or operated hospitals).
We concluded that the annual burden
per hospital should be calculated with
all activities performed by four
professions combined. The four
professions included a lawyer, a general
operations manager, a business
operations specialist, and a network and
computer system administrator. We
estimated an annual burden assessment
to be 12 hours (2 hours + 8 hours + 2
hours) per hospital with a cost of
$1,017.24 ($257.80 + $592.00 + $167.44)
per hospital. We also estimated a total
national burden of 72,024 hours (12
hours × 6,002 hospitals) and total cost
of $6,105,474 ($1,017.24 × 6,002
hospitals).
Comment: Several commenters were
concerned that CMS did not take into
account the number of hours needed for
specific technical activities or
consultation with necessary
professionals. For example, a few
commenters were concerned that CMS
underestimated the cost and time
involved in consulting legal and
compliance experts on implementation
of the rule, suggesting that such
investment would be necessary to
ensure the hospital had satisfactorily
met requirements. A few commenters
suggested that CMS take into account
the time, resources and input of clinical
staff necessary for each hospital to
identify and compile each shoppable
service or service package and
corresponding ancillary services to
reach a total of 300 shoppable services.
One commenter suggested that the
burden estimate take into account the
time hospitals need to develop policies
and business practices to comply with
the requirements of the rule. Several
commenters were concerned that the
burden estimate did not reflect the need
to hire multiple additional full time
equivalents (FTEs) to staff multiple
departments to comply with the rule to
keep up with new charges, technology,
monitoring and reporting, and contract
negotiations.
A few commenters cited a need for
increasing consumer-facing clinical
staffing as a result of making public
hospital standard charge information.
Specifically, one commenter expressed
concern that the increased complexity
of information available to consumers
would result in an increased volume of
calls from an average of 25 patients per
day to 200 patients per day to its
hospital customer service center. As a
174 American Hospital Association. Fast Facts on
U.S. Hospitals, 2019. Available at: https://
www.aha.org/statistics/fast-facts-us-hospitals.
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result, the commenter stated that the
hospital customer service center would
need to add 8–10 additional FTEs,
resulting in $500,000 to $1 million in
additional costs per year.
Response: We thank commenters for
their input and suggestions on the types
of professions, and the time and
resources needed to comply with these
requirements. Our estimate takes into
account the time needed to review and
comply with these requirements. We
acknowledge that some hospitals may
require longer time or greater resources
than others to identify and compile their
standard charges in a manner consistent
with our final rules. For example, some
hospitals may have many third-payer
contracts while others may have
relatively few. Similarly, some hospitals
may have already compiled and present
their services to the public in a manner
that is consumer-friendly as a result of
state requirements or voluntarily
actions. We also believe that the greatest
impact will be in the first year related
to organizing the display of information
in the form and manner required under
this final rule after which the hospital
would simply have to update the
numbers annually. In order to minimize
the burden related to the consumerfriendly display of hospital charges for
shoppable services, we are finalizing as
modifications to new 45 CFR 180.60
that a hospital offering an internet-based
price estimator tool, that meets the
requirements we set forth in section
II.F.5. of the final rule, is an acceptable
alternative method for meeting our
requirements to make public its
standard charges for selected shoppable
services in a consumer-friendly manner.
We believe that hospitals that have
already been offering price estimator
tools will incur less costs to comply
with the requirements of the final rule
given this accommodation.
Even so, we appreciate the suggestion
from commenters that we consider time
and input from clinical staff. We agree
that clinical input would be helpful to
ensure the display of shoppable services
is presented the way patients experience
their care and to translate billing code
descriptions into plain language. As a
result, we are adding in the wage of
Registered Nurses as a proxy for clinical
staff and accounting for 30 hours of
clinical assistance per hospital. We
believe this time would be important in
the initial stages of implementation in
order to determine what ancillary
services are customarily provided with
the provision of the primary shoppable
service. We do not believe such clinical
expertise would be required for annual
updates to the disclosed information in
subsequent years. Additionally, in
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response to commenters who indicate
more time should be allocated for
lawyers and general operations
managers, we are increasing the number
of hours for those professions to 10
hours per hospital. Since the time
allocated for lawyers was for reviewing
the final rules, we believe these hours
should be included in the initial
implementation year estimate only. We
are also significantly increasing the
number of hours needed in the initial
implementation year for business
operations specialists to complete
necessary processes and procedures to
gather and compile required
information and post it to the internet
in the form and manner specified in the
final rule.
Finally, we can find no evidence to
support the assertion that public
disclosure of hospital standard charges
increases the number of consumer calls
to hospitals, necessitating hiring of
additional staff for a hospital customer
service center. To the contrary, price
transparency research suggests that
disclosure of provider charges can
reduce administrative costs for a
hospital and improve patient
satisfaction.175 We therefore have not
included this in our analysis.
Comment: Several hospitals asserted
that CMS had underestimated the total
administrative burden and cost of
meeting the requirements of the rule
and disagreed with the 12-hour
estimate. Commenters stated several
reasons for this concern including not
accounting for the number of payers that
could be present in a geographic region,
the variety of negotiated payment
methodologies between hospitals and
payers, and the amount and scope of
hospital resources required to gather the
relevant data from contracts and
accounting systems. Some commenters
also indicated that the administrative
burden and cost estimate should take
into consideration the electronic
availability and display of data on a
user-friendly platform, and the cost to
hospitals to regularly update their
standard charge information for
monitoring and reporting. Commenters
cited the complexity of information to
be provided and the burden of gathering
the data from disparate accounting and
billing systems. In particular,
commenters indicated that some
hospitals do not already have their
standard charge data available in any
electronic format, stating that they do
not have contract management systems.
175 https://www.advisory.com/research/marketinnovation-center/the-growth-channel/2018/12/
price-transparency.
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Several commenters disagreed with
the estimate based on their experiences
with compliance with the requirements
under the FY 2019 IPPS/LTCH PPS final
rule (83 FR 41144) and state-based price
transparency requirements. For
example, one commenter indicated that
chargemaster posting took 30 minutes to
complete while another commenter said
they have already exceeded 12 hours
just to comply with posting their
chargemaster data alone, while another
commenter stated their experience in
making standard charges public under
the FY 2019 IPPS/LTCH PPS final rule
task required 60 to 100 hours. Another
commenter stated that their medical
center spent 6 months of planning and
exceeded 50 hours to meet the
requirements for price transparency
under the FY 2019 IPPS/LTCH PPS final
rule. One commenter stated that one of
their hospital members voluntarily
produced a website that allows
consumers to obtain estimates of their
total out-of-pocket costs by plugging in
information from their insurers. Their
online tool covers 500 of their 6,000
chargemaster services items and the
hospital estimates it took them 20 FTE
hours to set up the basic framework and
an ongoing two to four FTE hours per
week to continue the build of all
services and test for errors and putting
real-time insurance information has
taken an estimated 150 FTE hours to
date. Similarly, another commenter, a
professional organization of individuals
involved in various aspects of
healthcare financial management,
writing on behalf of hospital finance
and management professionals based on
a survey of those individuals their
members estimated that the average
time required to comply is 150 hours
per hospital, based on a survey of its
members. One commenter stated that
North Carolina implemented a similar
process to the ‘‘service package’’ portion
of CMS’ proposal that included top 100
DRGs, top 20 outpatient surgeries, and
top 20 imaging procedures at the State
level with the de-identified minimum,
average and maximum ‘‘accepted’’
(collected) for closed accounts. The
commenter estimated that this effort
required 500 hours of staff time for the
first reporting period. Several
commenters provided estimates of their
anticipated burden and additional
required FTEs to comply with the
proposed requirements for hospitals to
make public standard charges ranging
from $1,000 to over $450,000 per
hospital, 12.5 hours to 4,600 hours per
hospital, and 3–10 employees per
hospital.
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Response: We appreciate the input
provided by commenters. As indicated
in the CY 2020 OPPS/ASC proposed
rule at 84 FR 39579 through 39580,
based on an internal analysis of plans in
the regulated individual and small
group insurance markets under the
ACA, we determined that per rating area
there is an average of 1 to 400 payers in
the small group market (averaging
nearly 40 products or lines of service in
each rating area) and an average of 1 to
200 payers in the individual market
(averaging nearly 20 products or lines of
service in each rating area). We
therefore acknowledge and have taken
into account that hospitals may have
many payer-specific negotiated charges
to compile and make public. We are also
aware that hospitals and payers utilize
a variety of payment methodologies in
their contracts, which is why we have
focused on the base payer rates
negotiated between the hospital and
payer for the services hospitals provide
(section II.D.3 of this final rule). We are
also aware that the standard charge
information may be housed in disparate
systems, for example, the gross charges
can be found in a hospital chargemaster
while the payer-specific negotiated
charges can be found in the hospitals’
revenue cycle management system or in
the rate tables associated with the innetwork contract.
Some commenters provided
implementation estimates based on a
hospital system comprised of more than
one hospital, and in such instances, we
converted the estimate to a per-hospital
basis for our analysis. Others (as in the
North Carolina example above)
appeared to misunderstand the
requirements by referencing a need to
calculate and determine paid amounts,
in contrast to the policies we are
finalizing in this rule. Most of the
outlier estimates submitted by
commenters were unaccompanied by
any details regarding the assumptions
that were made to develop the estimate.
We also noted that some commenters
provided burden estimates in reference
to development of a consumer-friendly
price estimator tool, however, we are
not requiring hospitals to develop or
display standard charge data in a tool.
Our final policies provide hospitals
with flexibility to determine the most
appropriate internet-based format for
purposes of complying with making
standard charges public in a consumerfriendly manner. Further, we believe
there are a variety of low cost formats
a hospital could choose as suggested in
section II.F of this final rule. For
example, making public standard
charges in a spreadsheet posted to a
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65593
hospital website would be one way to
satisfy the requirements of this final
rule. We note that in response to
comments on this issue, we have
finalized a policy that would reduce
hospital reporting burden further,
specifically, we are finalizing a policy to
specify that a hospital offering an
internet-based price estimator tool, that
meets the criteria we set forth in new 45
CFR 180.60, would be regarded as
having met the requirements to make
public their standard charges for
selected shoppable services in a
consumer-friendly manner. We also
believe due to their existing public
displays of data, these hospitals already
have a framework or business processes
that they can leverage that would
minimize additional burden.
We also acknowledge that some
hospitals may require more time and
resources than others to gather the
relevant data, prepare for its electronic
availability, display it in a consumerfriendly format, and regularly update
that information for monitoring and
reporting. We believe this to be true
because some hospitals are already
compiling and reporting similar data to
meet State price transparency
requirements and some are already
making public their charges online in
consumer-friendly ways. The wide
range of burden hours submitted by
commenters appears to support and
reflect the notion that hospitals
nationwide are at different stages of
readiness to offer consumers transparent
price information or are at various levels
of participation in posting of charge and
price information. We also believe that
different hospitals may face different
constraints when estimating their
burden and resources required.
With these considerations in mind,
we agree that the burden estimate
should be revised to reflect an increased
number of hours. Commenters included
individuals, hospitals and health
systems, hospital associations, and a
health finance association. The
commenters provided estimates based
on both their unique experiences as well
as experiences from a wide variety of
health financial management experts
and members. As noted, estimates
submitted by commenters (when
calculated on a per hospital basis)
ranged from $1,000 to over $450,000 per
hospital, 12.5 hours to 4,600 hours per
hospital, and 3–10 employees per
hospital. Most estimates by commenters
fell within a range of 60 to 250 hours
per hospital and approximately $4,800
to $20,000 per hospital, which we
conclude is reasonable given our
assumption that hospitals are in various
states of readiness. Specifically, we
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determined that a total burden of 150
hours for the first year is reasonable for
hospitals nationwide, based on
estimates provided by an organization
with broad expertise and membership
related to healthcare financial
management and a large health care
system with multiple hospitals. We
believe an estimate of 150 hours per
hospital for the first year represents a
broad industry view that takes into
account the range of hospital readiness
and ability to comply with these rules.
Comment: Several commenters
referenced the cost of ongoing
compliance with the rule in subsequent
years and recommended an annualized
burden estimate that would be reduced
from the initial year of implementation
of the requirement to publicize standard
charges. However, few commenters
provided any specific recommendations
as to the potential ongoing costs. One
commenter, for example, indicated that
they believed an estimate of ‘‘several
thousand dollars’’ would be reasonable
to purchase software that would
automatically update the charges on an
annual basis (thus suggesting that there
would be no maintenance costs). Two
commenters suggested that maintenance
costs would be approximately 25
percent of implementation costs,
however, these commenters specifically
discussed the costs associated with
pricing tool development, and not the
burden associated with our final
policies. Another commenter estimated
their compliance would require
$100,000 for the first year working with
an outside vendor and close to $50,000
in the out years, however, this
commenter assumed that the file would
be updated as frequently as weekly. One
commenter shared their experience
complying with a North Carolina
requirement to calculate and report
amounts paid and indicated their
maintenance burden was approximately
40 percent of their initial effort.
Response: We agree with commenters
that there may be a continued cost of
compliance with the rule past the initial
year for some hospitals and are therefore
adding a burden assessment for
maintenance costs. We further agree
with commenters that the annualized
burden should show a reduction
compared to the initial year because
hospitals will have made the necessary
updates to their software and business
operations during the first year, and
become more acclimated to the rule.
Specifically, we believe there will no
longer be a need for hospitals to: (1)
Consult with a clinical professional to
make a selection of shoppable services
or to determine associated ancillary
services; or (2) consult with a lawyer to
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review the requirements of this final
rule as these are actions that will only
need to take place prior to the initial
public display of data. We therefore
estimate that after eliminating the
burden hours for these professionals
and reducing the applicable burden
hours for business and general
operations in subsequent years, the total
annual national burden for maintenance
costs in subsequent years would be
276,092 hours (46 hours × 6,002
hospitals) and total cost of $21,672,502
($3,610.88 × 6,002 hospitals). (See Table
6.)
Comment: Several commenters
suggested that CMS engage in further
research or solicit additional input from
stakeholders and focus groups.
Commenters recommended CMS work
with a focus group of several large
health systems and industry consultants
to conduct further studies to understand
the actual time and effort for
implementation of these requirements.
A few commenters suggested that CMS
should do more research to better
inform the COI and burden estimates
and suggested CMS seek in-depth input
from hospitals on how their contracts
are developed and how negotiated rates
may be displayed to include such
considerations as the full scope of
current hospital reporting and
unintended consequences.
Response: We appreciate commenters’
suggestions. However, we believe that
we have sufficient input as a result of
our many RFIs and listening sessions
conducted over the course of the past 18
months, in addition to the helpful input
we received from comments to our CY
2020 OPPS/ASC proposed rule. We note
that we are making some
accommodations in our final policies to
relieve hospital burden and to provide
additional time for hospitals to come
into compliance with these new rules.
Additionally, we are increasing our
estimated burden in accordance with
the recommendations from commenters,
and including ongoing maintenance
costs.
Final Estimate: In this final rule, we
seek to promote price transparency in
hospital standard charges so that
consumers can be empowered to make
more informed decisions about their
healthcare. If finalized, we believe these
proposed requirements would represent
an important step towards putting
consumers at the center of their
healthcare and ensuring they have
access to needed information. We are
making modifications to several of our
proposed policies that impact our
burden estimate. Specifically, we are
adding three additional types of
standard charges that the hospital
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would have to make public: The deidentified minimum negotiated charge,
the de-identified maximum negotiated
charge and the discounted cash price.
We continue to believe that since these
data exist in hospital financial and
accounting systems (although not
always in electronic format), the burden
for making this information publicly
available would be relatively minimal
for posting of gross charges, payerspecific negotiated charges, deidentified minimum negotiated charge,
de-identified maximum negotiated
charge, and discounted cash prices for
all hospital items and services online in
a single machine-readable format as
specified in the final rule. In addition,
we continue to estimate some burden
associated with hospitals making public
their payer-specific negotiated charges,
de-identified minimum negotiated
charge, de-identified maximum
negotiated charge, and cash discounted
price for a set of at least 300 (70 CMSspecified and at least 230 hospitalselected) shoppable services in a
consumer-friendly manner, with
flexibility for hospitals to determine the
most consumer-friendly format.
Although we are increasing the
number of the types of standard charges
a hospital must make public, we have
reduced burden by finalizing a policy to
specify that a hospital offering an
internet-based price estimator tool, that
meets the criteria we set forth in new 45
CFR 180.60, would be deemed as having
met the requirements to make public
their standard charges for selected
shoppable services in a consumerfriendly manner. Because many
hospitals already offer such price
estimator tools, we believe this policy
will serve to minimize the burden while
meeting our policy goals of ensuring
hospital pricing information can be
readily accessible in a consumerfriendly manner.
We estimate that the final rule applies
to 6,002 hospitals operating within the
United States under the definition of
‘‘hospital’’ discussed in section II.B.1. of
the final rule. To estimate this number,
we subtract 208 federally-owned or
operated hospitals from the total
number of U.S. hospitals, 6,210
hospitals 176 (6,210 total hospitals ¥208
federally-owned or operated hospitals).
We estimate the hourly cost for each
labor category used in this analysis by
referencing Bureau of Labor Statistics
report on Occupational Employment
176 American Hospital Association. Fast Facts on
U.S. Hospitals, 2019. Available at: https://
www.aha.org/statistics/fast-facts-us-hospitals.
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Federal Register / Vol. 84, No. 229 / Wednesday, November 27, 2019 / Rules and Regulations
and Wages (May 2018 177) in Table 4.
There are many professions involved in
any business’s processes. Therefore, we
use the wages of General and Operations
Managers as a proxy for management
staff, the wages of Lawyers as a proxy
for legal staff, the wages of Network and
Computer Systems Administrators as a
proxy for IT staff, the wage of Registered
Nurses as a proxy for clinical staff, and
the wage of Business Operations
Specialists as a proxy for other business
staff throughout this analysis. Obtaining
data on overhead costs is challenging.
Overhead costs vary greatly across
industries and facility sizes. In addition,
the precise cost elements assigned as
‘‘indirect’’ or ‘‘overhead’’ costs, as
opposed to direct costs or employee
wages, are subject to some interpretation
65595
at the facility level. Therefore, we
calculate the cost of overhead at 100
percent of the mean hourly wage in line
with the Hospital Inpatient Quality
Reporting Program and the Hospital
Outpatient Quality Reporting Program
(81 FR 57260 and 82 FR 59477,
respectively).
TABLE 4—OCCUPATION TITLES AND WAGE RATES
Occupation
code
Occupation title
Lawyers ............................................................................................................
General and Operations Managers .................................................................
Business Operations Specialists .....................................................................
Registered Nurses ...........................................................................................
Network and Computer Systems Administrators .............................................
23–1011
11–1021
13–1199
29–1141
15–1142
Mean hourly
wage
($/hr)
$69.34
59.56
37.00
36.30
41.86
Fringe
benefit
($/hr)
$69.34
59.56
37.00
36.30
41.86
Adjusted
hourly wage
($/hr)
$138.68
119.12
74.00
72.60
83.72
In order to comply with regulatory
updates finalized in the final rule in the
initial year of implementation, hospitals
would first need to review the rule. We
estimate that this task would take a
lawyer, on average, 5 hours (at $138.68
per hour, which is based on the Bureau
of Labor Statistics (BLS) wage for
Lawyers (23–1011) 178) to perform their
review, and a general operations
manager, on average, 5 hours (at $119.12
per hour, which is based on the Bureau
of Labor Statistics (BLS) wage for
General and Operations Managers (11–
1021) 179) to review and determine
compliance requirements. Therefore, for
reviewing the rule, we estimate 10
burden hours per hospital, with a total
of 60,020 burden hours (10 hours ×
6,002 hospitals). The cost is $1,289 per
hospital (5 hours × $138.68 + 5 hours ×
$119.12), with a total cost of $7,736,578
($1,289.00 × 6,002 hospitals).
After reviewing the rule, hospitals
would need to review their policies and
business practices in the context of the
defined terms and requirements for
information collection then determine
how to comply. We believe this will
require minimal changes for affected
hospitals because the standard charge
information to be collected is already
compiled and maintained as part of
hospitals’ contracting, accounting and
billing systems. Some hospitals may
have to consult directly with their payer
contracts to review and compile payer-
specific negotiated charges. We note
that we are finalizing requirements for
hospitals to make public five types of
standard charges including their gross
charges (as reflected in the
chargemaster), their payer-specific
negotiated charges, discounted cash
prices, the de-identified minimum
negotiated charge, and the de-identified
maximum negotiated charge. All five
types of standard charges for all items
and services, as finalized, must be made
public in a comprehensive machinereadable file online. Additionally, all
but gross charges would have to be
made public for a total of 300 shoppable
services (70 CMS-specified and 230
hospital-selected) in a consumerfriendly manner, including listing the
charges for associated ancillary services
provided by the hospital so that the
hospital charge information is more
accessible and easier to digest for
consumers seeking to obtain pricing
information for making decisions about
their treatment.
We estimate it would take a business
operations specialist, on average, 80
hours (at $74 per hour, which is based
on the Bureau of Labor Statistics (BLS)
wage for Business Operations
Specialists, All Other (13–1199) 180) to
complete necessary processes and
procedures to gather and compile
required information and post it to the
internet in the form and manner
specified by the final rule. For this task,
we estimate 80 burden hours per
hospital. The total burden hours are
480,160 hours (80 hours × 6,002
hospitals). The cost is $5,920 per
hospital (80 hours × $74), with a total
cost of $35,531,840 ($5,920 × 6,002
hospitals).
We estimate that a network and
computer system administrator would
spend, on average, 30 hours (at $83.72
per hour, which is based on the Bureau
of Labor Statistics (BLS) wage for
Network and Computer Systems
Administrators (15–1142) 181) to meet
requirements specified by this final rule.
The total burden hours are 180,060
hours (30 hours × 6,002 hospitals). The
cost is $2,511.60 per hospital (30 hours
× $83.72), with a total cost of
$15,074,623 (180,060 hours × $83.72).
In addition, in the initial year of
implementation, we estimate it would
take a registered nurse, on average, 30
hours (at $72.60 per hour, which is
based on Bureau of Labor Statistics
(BLS) wage for Registered Nurses (29–
1141) 182) to capture necessary clinical
input to determine a representative
services package for a given service. We
estimate 30 burden hours per hospital.
The total burden hours for this task are
180,060 hours (30 hours × 6,002
hospitals). The cost is $2,178 per
hospital (30 hours × $72.60), with a total
cost of $13,072,356 ($2,178 × 6,002
hospitals).
177 Bureau of Labor Statistics. National
Occupational Employment and Wage Estimates,
May 2018. Available at: https://www.bls.gov/oes/
2018/may/oes_nat.htm.
178 Bureau of Labor Statistics. Occupational
Employment and Wage Estimates, May 2018: 23–
1011 Lawyers. Available at: https://www.bls.gov/
oes/current/oes231011.htm.
179 Bureau of Labor Statistics. Occupational
Employment and Wage Estimates, May 2018: 11–
1021 General and Operations Managers. Available
at: https://www.bls.gov/oes/current/oes111021.htm.
180 Bureau of Labor Statistics. Occupational
Employment and Wages, May 2018: 13–1199
Business Operations Specialist, All Other. Available
at: https://www.bls.gov/oes/current/oes131199.htm.
181 Bureau of Labor Statistics. Occupational
Employment and Wages, May 2018: 15–1142
Network and Computer System Administrators.
Available at: https://www.bls.gov/oes/current/
oes151142.htm.
182 Bureau of Labor Statistics. Occupational
Employment and Wages, May 2018: 29–1141
Registered Nurses. Available at: https://
www.bls.gov/oes/2018/may/oes291141.htm.
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Therefore, we are finalizing the total
burden estimate for the first year to be
150 hours (10 hours + 80 hours + 30
hours + 30 hours) per hospital with a
cost of $11,898.60 ($1,289 + $5,920 +
$2,178 + $2,511.60) per hospital. We
also estimate a total national burden of
900,300 hours (150 hours × 6,002
hospitals) and total cost of $71,415,397
($11,898.60 × 6,002 hospitals). (See
Table 5.)
TABLE 5—SUMMARY OF INFORMATION OF COLLECTION BURDENS FOR THE FIRST YEAR
Regulation section(s)
OMB
control No.
Number of
respondents
Number of
responses
Burden per
response
(hours)
Total
annual
burden
(hours)
Total labor
cost of
reporting
($)
§ 180 .........................................................
0938–NEW
6,002
6,002
150
900,300
$71,415,397
We anticipate that these costs will
decline in subsequent years after the
first year of finalization of the rule as
hospitals gain additional efficiencies or
may utilize the business processes and
system infrastructures or software that
would be built or purchased during the
first year. We expect that the cost
associated with maintenance would be
significantly less than the cost hospitals
would incur in the first year and would
remain relatively level for a few years.
We further believe that the activities
associated with maintenance would
only require General and Operations
Managers, Business Operations
Specialists, and Network and Computer
Systems Administrators professions
listed in Table 4. Utilizing their
corresponding Adjusted Hourly Wage
rates from this table, we estimate that it
would take a general operations
manager, on average, 2 hours to review
and determine updates in compliance
with requirements. Therefore, we
estimate 2 burden hours per hospital,
with a total of 12,004 burden hours (2
hours × 6,002 hospitals). The cost is
$238.24 per hospital (2 hours ×
$119.12), with a total cost of $1,429,916
($238.24 × 6,002 hospitals).
We also estimate it would take a
business operations specialist, on
average, 32 hours to gather and compile
required information and post it to the
internet in the form and manner
specified by the final rule. For this task,
we estimate 32 burden hours per
hospital. The total burden hours are
192,064 hours (32 hours × 6,002
hospitals). Using Adjusted Hourly Wage
rates from Table 4, the cost is $2,368 per
hospital (32 hours × $74.00), with a total
cost of $14,212,736 ($2,368 × 6,002
hospitals).
Lastly, we estimate that a network and
computer system administrator would
spend, on average, 12 hours to maintain
requirements specified by this final rule.
The total burden hours are 72,024 hours
(12 hours × 6,002 hospitals). The cost is
$1,004.64 per hospital (12 hours ×
$83.72), with a total cost of $6,029,849
(72,024 hours × $83.72).
Therefore, we are finalizing the total
annual burden estimate for subsequent
years to be 46 hours (2 hours + 32 hours
+ 12 hours) per hospital with a cost of
$3,610.88 ($238.24 + $2,368.00 +
$1,004.64) per hospital. We also
estimate a total annual national burden
for subsequent years of 276,092 hours
(46 hours × 6,002 hospitals) and total
cost of $21,672,502 ($3,610.88 × 6,002
hospitals). (See Table 6.)
TABLE 6—SUMMARY OF INFORMATION OF COLLECTION BURDENS FOR SUBSQUENT YEARS
Regulation section(s)
OMB
control No.
Number of
respondents
Number of
responses
Burden per
response
(hours)
Total
annual
burden
(hours)
Total labor
cost of
reporting
($)
§ 180 .........................................................
0938–NEW
6,002
6,002
46
276,092
$21,672,502
As healthcare costs continue to rise,
healthcare affordability has become an
area of intense focus. Healthcare
spending is projected to consume
almost 20 percent of the economy by
2027.183 We believe that one reason for
this upward spending trajectory in
spending is the lack of transparency in
healthcare pricing. Additionally,
numerous studies suggest that
consumers want greater healthcare
pricing transparency. For example, a
study of HDHP enrollees found that
respondents wanted additional
healthcare price information so that
they could make more informed
decisions about where to seek care
based on price.184 Health economists
and other experts state that significant
cost containment cannot occur without
widespread and sustained transparency
in provider prices. We believe there is
a direct connection between
transparency in hospital standard
charge information and having more
affordable healthcare and lower
healthcare coverage costs. We believe
healthcare markets could work more
efficiently and provide consumers with
183 National Health Expenditure Fact Sheet,
Centers for Medicare & Medicaid Services, April 26,
2019. Available at: https://www.cms.gov/researchstatistics-data-and-systems/statistics-trends-andreports/nationalhealthexpenddata/nhe-factsheet.html.
184 Sinaiko AD, et al. Cost-Sharing Obligations,
High-Deductible Health Plan Growth, and Shopping
for Health Care: Enrollees with Skin in the Game.
JAMA Intern Med. March 2016; 176(3), 395–397.
Available at: https://jamanetwork.com/journals/
jamainternalmedicine/fullarticle/2482348.
V. Regulatory Impact Analysis
A. Statement of Need
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higher-value healthcare if we promote
policies that encourage choice and
competition. The intent of this rule is to
promote price transparency in hospital
standard charges to implement section
2718(e) of the PHS Act. We believe that
in doing so, healthcare costs will
decrease through increased competition
and consumers will be empowered to
make more informed decisions about
their healthcare. We believe these
finalized requirements will represent an
important step towards putting
consumers at the center of their
healthcare and ensuring they have
access to needed information.
We further identified a need to
impose CMPs to ensure compliance
with the requirements of this final rule.
The amount of the CMP is $300 per day
per hospital. We believe this amount to
be sufficient to prompt hospitals to
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timely and properly display standard
charges in both machine-readable and
consumer-friendly formats in
accordance with the requirements of
this final rule.
B. Overall Impact
We have examined the impacts of this
rule as required by Executive Order
12866 on Regulatory Planning and
Review (September 30, 1993), Executive
Order 13563 on Improving Regulation
and Regulatory Review (January 18,
2011), the Regulatory Flexibility Act
(RFA) (September 19, 1980, Pub. L. 96–
354), section 1102(b) of the SSA, section
202 of the Unfunded Mandates Reform
Act of 1995 (March 22, 1995; Pub. L.
104–4), Executive Order 13132 on
Federalism (August 4, 1999), the
Congressional Review Act (5 U.S.C.
804(2)), and Executive Order 13771 on
Reducing Regulation and Controlling
Regulatory Costs (January 30, 2017).
Executive Orders 12866 and 13563
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Section 3(f) of Executive Order
12866 defines a ‘‘significant regulatory
action’’ as an action that is likely to
result in a rule: (1) Having an annual
effect on the economy of $100 million
or more in any 1 year, or adversely and
materially affecting a sector of the
economy, productivity, competition,
jobs, the environment, public health or
safety, or state, local or tribal
governments or communities (also
referred to as ‘‘economically
significant’’); (2) creating a serious
inconsistency or otherwise interfering
with an action taken or planned by
another agency; (3) materially altering
the budgetary impacts of entitlement
grants, user fees, or loan programs or the
rights and obligations of recipients
thereof; or (4) raising novel legal or
policy issues arising out of legal
mandates, the President’s priorities, or
the principles set forth in the Executive
Order.
An RIA must be prepared for major
rules with economically significant
effects ($100 million or more in any 1
year). In aggregate, we estimate that this
rule will cost approximately $71.4
million for hospitals to implement
nationwide, in the initial year of
implementation. In subsequent years,
we anticipate minimal burden on
hospitals for remaining compliant with
the requirements to make public
standard charges by annually updating
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the data they make public because, as
explained in the CY 2020 OPPS/ASC
proposed rule, we believe most of the
effort will be in reviewing the rule for
compliance, selecting the hospital
‘shoppable’ services, determining the
ancillary services and displaying the
shoppable services in a consumerfriendly manner. After the first year,
hospitals would only need to update the
data at least once every 12 months. We
estimate that these annual updates and
general operations for complying with
the final rule will cost hospitals
$21,672,502 annually after the initial
year.
Almost all hospitals operating within
the United States will be affected by the
requirement to make standard charges
public in both a machine-readable, and
consumer-friendly manner. Although
the level of disclosure of standard
charge data required under this final
rule is unprecedented, we do not expect
the requirements of the final rule to
disrupt normal business operations
because hospitals already keep and
maintain these data within their billing
and accounting systems. However, OMB
has determined that the actions are
economically significant within the
meaning of section 3(f) of the Executive
Order. Therefore, OMB has reviewed
this regulation, and the Department of
Health and Human Services has
provided the following assessment of its
impact.
C. Anticipated Effects
This final rule would affect each
hospital (as defined at 45 CFR 180.20)
operating within the United States. We
estimate that the final rule applies to
6,002 hospitals operating within the
United States under the definition of
‘‘hospital’’ discussed in section II.B.1. of
this final rule. To estimate this number,
we subtracted 208 federally-owned or
operated hospitals from the total
number of United States hospitals, 6,210
hospitals.185 In order to comply with
regulatory updates finalized in the final
rule in the initial year, hospitals would
first need to review the rule. We
estimate that this task would take a
lawyer, on average, 5 hours to perform
their review, and a general operations
manager, on average, 5 hours to review
and determine compliance
requirements. We then estimate it
would take a business operations
specialist, on average, 80 hours to
complete necessary processes and
procedures to gather and compile
required information and post it to the
185 American
Hospital Association. Fast Facts on
U.S. Hospitals, 2019. Available at: https://
www.aha.org/statistics/fast-facts-us-hospitals.
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65597
internet in the form and manner
specified by the final rule. We also
estimate that a network and computer
system administrator would spend, on
average, 30 hours to meet requirements
specified by this final rule. Lastly, we
estimate it would take a registered
nurse, on average, 30 hours to capture
necessary clinical input to determine a
representative services package for a
given service. Therefore, we are
finalizing the total burden estimate to be
150 hours per hospital for the first year
immediately following the finalization
of this rule.
For the burden hours in subsequent
years, we estimate that it would take a
general operations manager, on average,
2 hours to review and determine
updates in compliance requirements, a
business operations specialist, on
average, 32 hours to update necessary
processes and procedures to gather and
compile required information and post
it to the internet in the form and manner
specified by this final rule, and a
network and computer system
administrator would spend, on average,
12 hours to maintain requirements
specified by this final rule. Therefore,
we are finalizing the total burden
estimate for the subsequent years to be
46 hours per hospital.
In order to estimate the cost
associated with these activities, we use
the hourly cost for each labor category
used in this analysis by referencing
Bureau of Labor Statistics report on
Occupational Employment and Wages
(May 2018 186). There are many
professions involved in any business’s
processes. Therefore, we use the wage
rate of a profession as a proxy for
professional activities under such
category. Also, we calculate the cost of
overhead at 100 percent of the mean
hourly wage in line with the Hospital
Inpatient Quality Reporting Program
and the Hospital Outpatient Quality
Reporting Program (81 FR 57260 and 82
FR 59477, respectively). As a result, we
use adjusted hourly wage rate of
$138.68 for lawyers, adjusted hourly
wage rate of $119.12 for general and
operational managers, adjusted hourly
wage rate of $74 for business operations
specialists, adjusted hourly wage rate of
$83.72 for network and computer
systems administrators and hourly wage
rate of $72.60 for registered nurses. With
these numbers, we estimate a cost of
$11,898.60 per hospital with total cost
of $71.4 million for affected hospitals
nationwide in the initial period for
186 Bureau of Labor Statistics. National
Occupational Employment and Wage Estimates,
May 2018. Available at: https://www.bls.gov/oes/
2018/may/oes_nat.htm.
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implementing the requirements we are
finalizing with this rule.
1. Effects on Private Sector
As discussed in the CY 2020 OPPS/
ASC proposed rule (84 FR 39631
through 39632), we considered the
estimated effects on the private sector,
and welcomed public comments on the
impact of the proposed requirements on
the private sector. As discussed in the
Collection of Information section of this
final rule, we continue to believe the
burden on hospitals would be minimal.
We also indicated that we believe the
requirements in the final rule would
encourage hospitals to adhere to best
practices and industry standards by
developing more robust and more
efficient revenue integrity processes
while working to comply with these
requirements. Additionally, we are
finalizing policies that could reduce
potential compliance burdens, for
example, we are finalizing as a
modification that a hospital offering an
internet-based price estimator tool that
meets applicable requirements, is
regarded as having met requirements to
make public its standard charges for
selected shoppable services in a
consumer-friendly manner. Some
hospitals already offer such tools, so
fewer hospitals would need to develop
display of consumer-friendly pricing
information from scratch. Moreover,
such hospitals would spend fewer hours
complying because they would only
need to review their existing price
estimator tool to evaluate whether it
meets the criteria specified at
180.60(a)(2).
Therefore, we considered these new
variables in estimating burden and cost
after the initial period of
implementation, and determined their
value would largely depend upon the
hospitals’ initial readiness and
compliance status. We believe some
variables serve to reduce the hours
required for one or more activities
associated with complying with the
final rule after the first year. For
example, to be compliant initially, the
hospital must determine its shoppable
services and ancillary services for
display, must determine the most
consumer-friendly format and display
site, and must collect payer-specific
negotiated charge information from its
contracts or existing revenue
management cycle process. Such
activities are necessary only in the
initial period of implementation for
hospitals that do not already adhere to
industry standards and best practices;
once those activities have been
completed, a hospital would simply
need to update the standard charge data
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on an annual basis going forward. In
addition, these variables may correlate
and drive more changes in factors that
would affect cost estimating after the
initial period of implementation. Due to
these considerations, we provided an
updated burden estimate that reduces
the number of total annual hours in
subsequent years and are finalizing with
this rule.
Comment: A few commenters stated
that CMS has not demonstrated that the
benefit of the policies outweigh the
costs of implementing the rule.
Response: We appreciate commenters’
input. However, we disagree with this
comment. This final rule seeks to
further advance hospital price
transparency efforts that initiated with
the FY 2015 IPPS/LTCH PPS and FY
2019 IPPS/LTCH PPS rules seeking to
implement section 2718(e) of the PHS
Act. At the time these prior rules were
published, and as echoed in the
comments we are responding to in this
final rule, we heard from many
stakeholders and public commenters
that more guidelines and specificity
around the form and manner in which
hospitals make standard charges public
would be helpful. Such commenters
requested that CMS include
requirements for more types of standard
charges, as gross charges or the
chargemaster alone are not sufficient for
patients to estimate their financial
obligations or to drive improvements in
value-based care. This final rule goes a
step farther by requiring hospitals to
make public payer-specific negotiated
charges, the de-identified minimum
negotiated charge, the de-identified
maximum negotiated charge, and
discounted cash prices, in addition to
gross charges for all items and services.
Throughout section II of this final rule,
we discuss the benefits of informing and
empowering the public with hospital
price information. These requirements
would make public data that consumers
could use to better understand the cost
of care, and inform their healthcare
decision-making, before receiving
services. Further, technology vendors
may innovate and create new products,
including internet-based price estimator
tools, or upgrade existing technologies
to support hospitals in meeting these
requirements and aiding consumers and
healthcare providers in using data that
is made public by hospitals. Other
members of the public, such as
employers, would be better informed to
monitor insurer effectiveness and to
help their employees shop for value.
In section V of this final rule, we
analyze effects of these requirements on
both the private sector and consumers.
In section IV of this final rule, we detail
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how we determined the estimated
burden of the requirements we are
finalizing, at 150 hours with a cost of
$11,898.60 per hospital, and how we
arrived at these figures. In the following
sub-sections of the RIA, we categorize
our analyses within the estimated
effects on consumers, small entities,
small rural hospitals, and alternatives
considered. We provide analyses from
these perspectives to demonstrate that
these requirements would bring
consumers and other stakeholders’
insights into healthcare costs, as well as
the reasonable burden estimate for
hospitals that takes into account
commenters’ concerns. In summary, we
believe the overall benefits to
consumers and healthcare markets
nationwide will exceed the burden. For
the initial year of implementation, we
are finalizing an estimate of 150 hours
and cost $11,898.60 per hospital for the
burden of the requirements we are
finalizing in this final rule that takes
into account input from public
comments.
Comment: We received some
comments on the potential impacts of
the proposed hospital price
transparency requirements on CAHs,
rural hospitals, and SCHs, including
their suggestion that CMS exempt these
entities from part or all requirements to
make standard charges public.
Response: We believe that the benefits
to consumers, and to the general public
as a whole, outweigh the operational
challenges faced by these entities.
Further, elsewhere in the RIA (see
section V.C.5 of this final rule), we
analyze effects on small rural hospitals.
Comment: Many commenters
cautioned that disclosure of payerspecific negotiated charges would
increase, not decrease, healthcare costs
in certain markets due to
anticompetitive behaviors or increases
in prices as a result of hospital
knowledge of better rates negotiated by
neighboring hospitals.
Response: We continue to believe, as
supported by (for instance) academic
research, economics research, or both,
that the healthcare market could work
more efficiently and provide consumers
with high-value healthcare through
policies that encourage choice and
competition. Research suggests that in a
normal market, price transparency
(more generally) will result in reduced
rates, overall.187 There are models in the
187 Christensen HB, et al. 2018. ‘‘The Only
Prescription Is Transparency: The Effect of ChargePrice-Transparency Regulation on Healthcare
Prices.’’ SSRN Scholarly Paper ID 2343367.
Rochester, NY: Social Science Research Network.
Available at: https://papers.ssrn.com/
abstract=2343367.
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States that have shown that release of
the information has driven costs down
not up.188 On aggregate, we believe the
effects on competition, resulting from
hospital price transparency, would
drive down healthcare prices. We
acknowledge, that knowledge by a
hospital of other hospitals’ payerspecific negotiated charges could also
drive up rates; especially if a hospital
discovers it is currently being paid less
than other hospitals by a payer and,
thereby, negotiates higher rates. On the
other hand, payers may negotiate lower
rates, if they discover hospitals have
negotiated lower rates with competing
payers.
Comment: Typically described in the
context of commenters’ concerns on
specific proposals, and as described
within section II of this final rule,
commenters suggested a number of
possible unanticipated consequences for
the private sector of the proposed
requirements for hospitals to make
public standard charges, including the
following:
• The disclosure of payer-specific
negotiated charges is likely to result in
anti-competitive behavior and anti-trust
exposure.
• Under the proposed requirements
for hospitals to make public standard
charges including payer-specific
negotiated charges, hospitals would be
exposed to litigation risk, due to the
belief that these contractual
reimbursement rates are proprietary.
• The proposal would contradict the
goals of CMS’ Patients-over Paperwork
initiative.
• The requirement to disclose
standard charges for all items and
services as defined under the CY 2020
OPPS/ASC proposed rule would result
in hospital closures.
• Complying with the requirements,
as proposed, would be cost-prohibitive
for CAHs, rural hospitals, and small
hospitals, among others.
• The CY 2020 OPPS/ASC proposed
rule’s focus on standard charges would
negatively impact hospitals’ transition
to value-based care.
Response: We appreciate commenters’
concerns, and we have addressed these
concerns elsewhere in this final rule.
We do not believe that these concerns
affect our estimate of the impact of the
requirements we are finalizing, and
accordingly we decline to adjust our
economic analyses based on these
concerns alone.
188 Brown ZY. Equilibrium Effects of Health Care
Price Information. The Review of Economics and
Statistics. Published October 2019; 101:4, 699–712.
Available at: https://www-personal.umich.edu/
∼zachb/zbrown_eqm_effects_price_
transparency.pdf.
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As we detailed in Section IV.B, we
estimated the total burden to implement
the requirements of this rule to be 150
hours at a cost of $11,898.60 per
hospital. We noted that hospitals
nationwide are at different stages of
readiness to offer consumers transparent
price information or are at various levels
of participation in posting of charge and
price information. We also believe that
different hospitals may face different
constraints when estimating their
burden and resources required. We
believe that some hospitals will already
have a framework or business processes
in place that they can leverage that
would minimize additional burden.
However, there will be other hospitals
that will have additional burden, above
our projected 150 hours we estimated,
to meet the requirements of this rule.
Therefore, we are providing alternative
estimates on a range of hours in this
impact analysis. We note that most
commenters stated that a reasonable
estimate for burden based for
implementing existing requirements to
disclose standard charges is within the
range of 60–250 hours, therefore we are
providing cost estimates ranging from
60 hours to 250 hours.
For a low estimate, we now estimate
it would take a take a lawyer 2 hours (at
$138.68 per hour); a general operations
manager 2 hours (at $119.12 per hour);
business operations specialist 32 hours
(at $74 per hour), a network and
computer system administrator 12 hours
(at $83.72 per hour); a registered nurse
12 hours (at $72.60 per hour). Therefore,
we are providing a low estimate of the
total burden for the first year to be 60
hours (2 hours + 2 hours + 32 hours +
12 hours + 12 hours) per hospital with
a cost of $4,759.44 per hospital. Table
7 provides the total cost.
For a high estimate, we now estimate
it would take a take a lawyer 8 hours (at
$138.68 per hour); a general operations
manager 8 hours (at $119.12 per hour);
business operations specialist 134 hours
(at $74 per hour), a network and
computer system administrator 50 hours
(at $83.72 per hour); a registered nurse
50 hours (at $72.60 per hour). Therefore,
we are providing a high estimate of the
total burden for the first year to be 250
hours (8 hours + 8 hours + 134 hours
+ 50 hours + 50 hours) per hospital with
a cost of $19,794.40 per hospital. Table
7 provides the total cost.
TABLE 7—COST RANGE ESTIMATES
Hours per
hospitals
PO 00000
60
250
Frm 00076
Cost per
hospital
4,759.44
19,794.40
Fmt 4701
Sfmt 4700
Total cost
28,566,159
118,805,989
65599
2. Effects on Consumers
As discussed in the CY 2020 OPPS/
ASC proposed rule (84 FR 39632
through 39633), we considered the
estimated effects on the consumers, and
welcomed public comments on the
impact of the proposed requirements on
consumers. As indicated in this final
rule, we believe the requirements from
this final rule will make public data
necessary for healthcare consumers to
better understand how the level of price
dispersion in various healthcare markets
and its impacts on healthcare spending
and consumer out-of-pocket costs. The
information may also benefit other
consumers of these data, for example,
employers, third party tool developers,
clinicians at the point of care, or
economics research to drive value-based
policy development. We noted in the
CY 2020 OPPS/ASC proposed rule that
the negotiated charges for various
procedures vary widely within and
across geographic regions in the United
States.189 Some factors associated with
the level of hospital price dispersion in
a geographic area are the hospital’s size,
healthcare demand, labor costs, and
technology, although it was the
hospital’s market power (level of
competition) that was most positively
associated with high price
dispersion.190 191 One major barrier to
fully understanding healthcare price
variation (and understanding the impact
of transparency of healthcare pricing in
general) is the lack of availability of
negotiated charges to researchers and
the public.192 We continue to believe
that requirements from this final rule
will make hospital charge information
available, which will generate a better
understanding of (1) hospital price
dispersion, and (2) the relationship
between hospital price dispersion and
healthcare spending. Additionally, we
believe understanding this relationship
through the disclosure of pricing data
could lead to downward price pressure
and reductions in overall spending
system-wide.
189 Kennedy K, et al. Health Care Cost Institute.
Past the Price Index: Exploring Actual Prices Paid
for Specific Services by Metro Area. Healthy
Marketplace Index. April 30, 2019. Available at:
https://www.healthcostinstitute.org/blog/entry/hmi2019-service-prices.
190 Cooper Z, et al. The Price Ain’t Right?
Hospital Prices and Health Spending on the
Privately Insured. The Quarterly Journal of
Economics. December 2015. Available at: https://
pdfs.semanticscholar.org/cb9c/f90786cc39ddac6
d88f3ba1074a7c2d5f0a5.pdf.
191 Bai G and Anderson GF. Market Power: Price
Variation Among Commercial Insurers For Hospital
Services. Health Affairs. Oct 2018; 37(10): 1615–
1622. Available at: https://www.healthaffairs.org/
doi/10.1377/hlthaff.2018.0567.
192 Ibid.
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Consumers may feel more satisfied
with their care when they are
empowered to make decisions about
their treatment. A recent survey 193
indicated a strong desire for price
transparency and openness. Eighty-eight
percent of the population polled,
demanded improved transparency with
their total financial responsibility,
including co-pays and deductibles.
Other studies such suggest that
improving a patient’s financial
experience served as the biggest area to
improve overall customer
satisfaction.194 Literature regarding
consumer engagement with existing
price transparency interventions
demonstrates that disclosing price
information positively impacts
consumers by allowing them to compare
prices for common procedures and shift
their demand towards lower-priced
options. One study examined consumer
use of an employer-sponsored, private
price transparency tool and its impact
on claims payments for three common
medical services: Laboratory tests;
advanced imaging services; and
clinician office visits.195 That study
found that those who used the tool had
lower claims payments by
approximately 14 percent for laboratory
tests; 13 percent for advanced imaging
services; and approximately one percent
for office visits compared to those who
did not use the tool. Those using the
tool mainly searched for information on
shoppable services and also tended to
have more limited insurance coverage.
Price transparency initiatives have
more impact when they are combined
with other cost control tools like
reference-based pricing. For example,
for a plan with reference-based pricing,
price transparency tools were associated
with a reduction of 32 percent in lab test
prices over three years.196
193 See Gruessner V. Consumer Satisfaction Dips
When Payers Lack Price Transparency. Private
Payers News (October 3, 2016). Available at: https://
healthpayerintelligence.com/news/consumersatisfaction-dips-when-payers-lack-pricetransparency.
194 See for example, Government Accountability
Office. September 2011. Health Care Price
Transparency: Meaningful Price Information Is
Difficult for Consumers to Obtain Prior to Receiving
Care. Available at: https://www.gao.gov/assets/590/
585400.pdf. Experian Health, Improve the
healthcare financial journey. Patient Engagement
(June 21, 2018). Available at: https://
www.experian.com/blogs/healthcare/2018/06/
healthcare-financial-journey/.
195 Whaley C, et al. ‘‘Association Between
Availability of Health Service Prices and Payments
for These Services.’’ JAMA. 2014; 312(16):1670–
1676. Available at https://jamanetwork.com/
journals/jama/fullarticle/1917438.
196 Robinson JC, Whaley BA, Brown TT.
Association of Reference Pricing for Diagnostic
Laboratory Testing With Changes in Patient (2016)
JAMA Int Med. 2016; 176(9); 1353–1359. Available
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Employers have also been
encouraging consumers to share in the
savings realized from engaging in
comparative shopping. The state of
Kentucky’s public employee benefit
program’s price transparency shared
savings initiative has saved state
taxpayers $13 million dollars since its
inception in 2015, and almost $2
million in cash benefits have been
shared with the state’s public
employees.197 Another study of a group
of 35 self-funded employers who
deployed a shared savings program in
2017 demonstrated an overall 2.1
percent cost reduction of the cost of
medical care and total savings of $23
million a year, with 23 percent of the
employees receiving shared savings
rewards.198
Finally, studies indicate that the
existence of comparative price shopping
information has the effect of reducing
healthcare costs for everyone, regardless
of whether they engage in shopping
behavior. A national study of state price
transparency efforts found an overall
reduction of hospital pricing by 5
percent and a state of New Hampshire
effort reduced consumer costs by 5
percent.199 200
Comment: Typically described in the
context of commenters’ concerns on
specific proposals, and as described
within section II of this final rule,
commenters suggested a number of
possible unanticipated consequences for
consumers of the proposed
requirements for hospitals to make
public standard charges, including the
following:
• The volume of data required for the
display of standard charges under the
rule would confuse consumers and
potentially cause them to seek out the
at: https://jamanetwork.com/journals/jamainternal
medicine/fullarticle/2536187.
197 Rhoads J. Right to Shop for Public Employees:
How Health Care Incentives are Saving Money in
Kentucky. Foundation for Government
Accountability. March 8, 2019. Available at: https://
thefga.org/wp-content/uploads/2019/03/RTSKentucky-HealthCareIncentivesSavingMoneyDRAFT8.pdf.
198 Whaley CM, et al. Paying Patients To Switch:
Impact Of A Rewards Program On Choice Of
Providers, Prices, And Utilization. Health Affairs.
March 2019. Available at: https://
www.healthaffairs.org/doi/10.1377/
hlthaff.2018.05068.
199 Christensen HB, et al. 2018. ‘‘The Only
Prescription Is Transparency: The Effect of ChargePrice-Transparency Regulation on Healthcare
Prices.’’ SSRN Scholarly Paper ID 2343367.
Rochester, NY: Social Science Research Network.
Available at: https://papers.ssrn.com/
abstract=2343367.
200 Brown ZY. Equilibrium Effects of Health Care
Price Information. The Review of Economics and
Statistics. Published October 2019; 101:4, 699–712.
Available at: https://www-personal.umich.edu/
∼zachb/zbrown_eqm_effects_price_
transparency.pdf.
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cheapest care, rather than the most
effective or best quality care.
• The burden of understanding costs
of care would shift from hospitals and/
or payers to consumers.
• The information on standard
charges would still not be sufficient to
inform consumers of their plan-specific,
out-of-pocket costs. The concerns
included that the required information
would be insufficient for consumers to
rely on, as well as concerns that too
much information is being required,
will be overwhelming and potentially
confusing to consumers.
Response: We appreciate commenters’
concerns, and we have addressed these
concerns elsewhere in this final rule.
We believe the requirements we are
finalizing for hospitals to make public
standard charges will provide
information to consumers that helps
inform their healthcare decisionmaking, and therefore ultimately benefit
consumers. Informed decision-making,
in turn, may have other positive effects;
for example, as research suggests,
informed healthcare consumers, that
have a price estimate before getting care
are more likely to pay their bills in a
timely manner.201 202
We do not believe that these concerns
about unintended consequences on
consumers affect our estimate of the
impact of the requirements we are
finalizing, and accordingly we decline
to adjust our economic analyses based
on these concerns alone.
3. Effects on Small Entities
The RFA requires agencies to analyze
options for regulatory relief of small
entities, if a rule has a significant impact
on a substantial number of small
entities. More than half of 6,002
hospitals are small entities, either by
nonprofit status or by having revenues
of less than $41.5 million in any 1
year.203 We analyzed these hospitals
and found that the estimated burden
from this final rule never exceeded 1
percent of reported revenue for any
hospital in this category, including the
201 Kutscher, B. ‘‘Report: Consumers demand
price transparency, but at what cost?’’ Modern
Healthcare. June 2015. Available at: https://
www.modernhealthcare.com/article/20150623/
NEWS/150629957/consumers-demand-pricetransparency-but-at-what-cost.
202 HFMA Executive Roundtable: Reimagining
Patient Access. December 2015. Available at:
https://api.hfma.org/Content.aspx?id=43731.
203 U. S. Small Business Administration, Table of
Small Business Size Standards, Matched to North
American Industry Classification System Codes
(size standards effective August 19, 2019). Available
at: https://www.sba.gov/sites/default/files/2019-08/
SBA%20Table%20of%20Size%20Standards_
Effective%20Aug%2019%2C%202019_Rev.pdf.
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hospital with the lowest revenue.204 For
the over 3,000 hospitals that meet the
standards for small entities defined by
the SBA, we estimate the burden from
this final rule to be, on average, 0.007
percent of hospital total annual revenue.
It is reasonable to assume that the
inclusion or exclusion of hospitals with
nonprofit status would not drive the
percentages to go over the threshold
because even the historically lowest
revenue hospitals indicate the burden
would not exceed at most about 1
percent of total hospital revenue in the
most extreme case. As its measure of
significant economic impact on a
substantial number of small entities,
HHS uses a change in revenue of more
than 3 to 5 percent. We do not believe
that this threshold will be reached by
the requirements in this final rule. As a
result, the Secretary has determined that
this final rule will not have a significant
impact on a substantial number of small
entities.
4. Effects on Small Rural Hospitals
Section 1102(b) of the SSA requires us
to prepare an RIA if a rule may have a
significant impact on the operations of
a substantial number of small rural
hospitals. This analysis must conform to
the provisions of section 604 of the
RFA. For purposes of section 1102(b) of
the SSA, we define a small rural
hospital as a hospital that is located
outside of a metropolitan statistical area
and has fewer than 100 beds. We
identified almost 1,900 hospitals as
having rural status and fewer than 100
beds. We note that commenters
submitted various concerns related to
burden for smaller or less resourced
hospitals. We have responded to these
concerns throughout this final rule. As
noted previously, we are aware that
hospitals are in varying stages of
readiness for implementation of this
final rule. While smaller or rural
hospitals may not have the staff or
automation that larger hospital systems
may have (which may increase burden
relative to a better resourced hospital or
hospital system), they are likely to have
far fewer contracts with payers and
provide fewer items and services
overall, which would reduce rural
hospital burden compared to larger
hospitals in regions with many payers.
For this reason it is difficult to
determine a unique impact on small
rural hospitals. For these small, rural
hospitals, we estimate the burden from
this final rule to be, on average, 0.037
percent of hospital total annual
204 CMS Office of the Actuary analysis of 2016
Medicare Cost Report data.
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revenue.205 Therefore, we conclude that
this final rule will not have a significant
impact on the operations of a substantial
number of small rural hospitals.
65601
D. Alternatives Considered
The final rule promulgates rules for
hospital compliance with section
2718(e) of the PHS Act and aims to
make price information more readily
available to the public. As described in
the CY 2020 OPPS/ASC proposed rule
(84 FR 39633), we considered a number
of alternative approaches to maximize
the value and accessibility of these data
to the public generally and directly to
consumers. For example, proposals to
require release of hospital standard
charge data in an API format. We also
considered other types of ‘‘standard
charges’’ that could be useful to
consumers. For example, in addition to
or instead of the requirement to disclose
gross charges and payer-specific
charges, we sought comment on
whether we should consider a definition
of ‘standard charge’ to be a volumedriven negotiated charge, the minimum/
median/maximum negotiated charge, or
all allowed charges. Such charges could
be relevant to specific groups of
individuals, particularly those with
health insurance coverage. We also
sought comment on a definition of
‘standard charge’ that might be relevant
to subgroups of individuals who are
self-pay, specifically, types of standard
charges representing the discounted
cash price for a service package, or the
median cash price.
We finalized the definition of
standard charges to include gross charge
(as discussed in section II.D.2 of this
final rule), and payer-specific negotiated
charge (as discussed in section II.D.3),
as proposed. We finalized modifications
to include within the definition of
standard charges the discounted cash
price (as described in section II.D.4.c of
this final rule), as well as the deidentified minimum negotiated charge,
and de-identified maximum negotiated
charge (as discussed in section II.D.4.d
of this final rule). Of the other
alternatives considered, we determined
that allowed amounts of plans that are
not negotiated are already publicly
disclosed (as discussed in section
II.D.4.b of this final rule), and that the
median negotiated charge would have
limited usefulness for consumers (as
discussed in section II.D.4.d of this final
rule). We also decided not to require
standardization in the release of
hospital standard charges, such as by
requiring data be presented in an API
format, noting that the requirements we
are finalizing in this final rule, for
hospitals to make public their standard
charges, are a good initial step.
As a result of comments, we
considered an alternative in which CMS
would specify all 300 shoppable
services and specify the corresponding
ancillary services. We estimate that this
could reduce burden for hospitals by
removing the clinical input necessary to
develop such service groupings which
would result in a first year burden of
$9,721 per hospital, or $58.3 million for
all hospitals.
Finally, we also considered an
alternative approach that would require
hospitals to make public a
comprehensive machine-readable file of
all standard charges for all hospital
items and services, but not require
hospitals to display charges for
shoppable services in a consumerfriendly manner. We estimate that this
could reduce burden for hospitals by
removing the clinical input necessary
and decrease the number of hours for
the other professions which would
result in a first year burden of $4,860
per hospital, or $29.2 million for all
hospitals.
205 Hospital Cost Report PUF is used for
calculating these statistics. The latest PUF file
publicly available is a 2014 dataset as of July 15,
2018, available at this link: https://www.cms.gov/
Research-Statistics-Data-and-Systems/StatisticsTrends-and-Reports/Medicare-Provider-CostReport/HospitalCostPUF.html.
E. Accounting Statement and Table
In accordance with OMB Circular A–
4, Table 8 depicts an accounting
statement summarizing the assessment
of the benefits and costs associated with
this regulatory action.
5. Unfunded Mandates
Section 202 of the Unfunded
Mandates Reform Act of 1995 (UMRA)
also requires that agencies assess
anticipated costs and benefits before
issuing any rule whose mandates
require spending in any 1 year of $100
million in 1995 dollars, updated
annually for inflation. In 2019, that
threshold is approximately $154
million. This final rule contains no such
unfunded mandates.
6. Federalism Analysis
Executive Order 13132 establishes
certain requirements that an agency
must meet when it promulgates a
proposed rule (and subsequent final
rule) that imposes substantial direct
requirement costs on state and local
governments, preempts state law, or
otherwise has Federalism implications.
Since this regulation does not impose
any costs on state or local governments,
the requirements of Executive Order
13132 are not applicable.
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TABLE 8—ACCOUNTING STATEMENT ESTIMATED IMPACTS
[CYs 2020–2022]
Units
Primary
estimate
(million)
Category
Discount
rate
(%)
Year
dollars
Period
covered
Benefits
Qualitative ........................................................................................................
The rule is anticipated to have the potential to reduce the range of
prices charged by hospitals such that a net savings would result
for payers and consumers from a corresponding reduction in income to hospitals. Price transparency would help to create a
healthcare information ecosystem that allows and encourages
the healthcare market to tailor products and services to compete
for patients, thereby increasing quality, decreasing costs, and
helping them live better, healthier lives.
Costs
Annualized monetized $ millions/year .............................................................
Subchapter E—Price Transparency
F. Regulatory Reform Analysis Under
E.O. 13771
Executive Order 13771, titled
Reducing Regulation and Controlling
Regulatory Costs, was issued on January
30, 2017 and requires that the costs
associated with significant new
regulations ‘‘shall, to the extent
permitted by law, be offset by the
elimination of existing costs associated
with at least two prior regulations.’’
This final rule is considered an
Executive Order 13771 regulatory
action. We estimate the rule generates
$23.0 million in annualized costs in
2016 dollars, discounted at 7 percent
relative to year 2016 over a perpetual
time horizon. Details on the estimated
costs of this rule can be found in the
preceding and subsequent analyses.
G. Conclusion
The analysis in this section, together
with the remainder of this preamble,
provides an RIA. In accordance with the
provisions of Executive Order 12866,
this regulation was reviewed by OMB.
List of Subjects in 45 CFR Part 180
Definitions, Hospitals, Reporting and
recordkeeping requirements.
For reasons stated in the preamble of
this document, the Department of
Health and Human Services amends 45
CFR subtitle A by adding subchapter E
to read as follows:
■
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$39.4
38.7
PART 180—HOSPITAL PRICE
TRANSPARENCY
PARTS 181–199 [RESERVED]
PART 180—HOSPITAL PRICE
TRANSPARENCY
Sec.
Subpart A—General Provisions
180.10 Basis and scope.
180.20 Definitions.
180.30 Applicability.
Subpart B—Public Disclosure Requirements
180.40 General requirements.
180.50 Requirements for making public
hospital standard charges for all items
and services.
180.60 Requirements for displaying
shoppable services in a consumerfriendly manner.
Subpart C—Monitoring and Penalties for
Noncompliance
180.70 Monitoring and enforcement.
180.80 Corrective action plans.
180.90 Civil monetary penalties.
Subpart D—Appeals of Civil Monetary
Penalties
180.100 Appeal of penalty.
180.110 Failure to request a hearing.
Authority: 42 U.S.C. 300gg–18, 42 U.S.C.
1302.
Subpart A—General Provisions
§ 180.10
Basis and scope.
This part implements section 2718(e)
of the Public Health Service (PHS) Act,
which requires each hospital operating
within the United States, for each year,
to establish, update, and make public a
list of the hospital’s standard charges for
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2019
2019
7
3
2020–2022
2020–2022
items and services provided by the
hospital, including for diagnosis-related
groups (DRGs) established under section
1886(d)(4) of the Social Security Act.
This part also implements section
2718(b)(3) of the PHS Act, to the extent
that section authorizes CMS to
promulgate regulations for enforcing
section 2718(e). This part also
implements section 1102(a) of the Social
Security Act, which authorizes the
Secretary to make and publish rules and
regulations, not inconsistent with that
Act, as may be necessary to the efficient
administration of the functions for
which the Secretary is charged under
that Act.
§ 180.20
Definitions.
The following definitions apply to
this part, unless specified otherwise:
Ancillary service means an item or
service a hospital customarily provides
as part of or in conjunction with a
shoppable primary service.
Chargemaster (Charge Description
Master or CDM) means the list of all
individual items and services
maintained by a hospital for which the
hospital has established a charge.
De-identified maximum negotiated
charge means the highest charge that a
hospital has negotiated with all third
party payers for an item or service.
De-identified minimum negotiated
charge means the lowest charge that a
hospital has negotiated with all third
party payers for an item or service.
Discounted cash price means the
charge that applies to an individual who
pays cash (or cash equivalent) for a
hospital item or service.
Gross charge means the charge for an
individual item or service that is
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reflected on a hospital’s chargemaster,
absent any discounts.
Hospital means an institution in any
State in which State or applicable local
law provides for the licensing of
hospitals, that is licensed as a hospital
pursuant to such law or is approved, by
the agency of such State or locality
responsible for licensing hospitals, as
meeting the standards established for
such licensing. For purposes of this
definition, a State includes each of the
several States, the District of Columbia,
Puerto Rico, the Virgin Islands, Guam,
American Samoa, and the Northern
Mariana Islands.
Items and services means all items
and services, including individual items
and services and service packages, that
could be provided by a hospital to a
patient in connection with an inpatient
admission or an outpatient department
visit for which the hospital has
established a standard charge. Examples
include, but are not limited to, the
following:
(1) Supplies and procedures.
(2) Room and board.
(3) Use of the facility and other items
(generally described as facility fees).
(4) Services of employed physicians
and non-physician practitioners
(generally reflected as professional
charges).
(5) Any other items or services for
which a hospital has established a
standard charge.
Machine-readable format means a
digital representation of data or
information in a file that can be
imported or read into a computer
system for further processing. Examples
of machine-readable formats include,
but are not limited to, .XML, .JSON and
.CSV formats.
Payer-specific negotiated charge
means the charge that a hospital has
negotiated with a third party payer for
an item or service.
Service package means an aggregation
of individual items and services into a
single service with a single charge.
Shoppable service means a service
that can be scheduled by a healthcare
consumer in advance.
Standard charge means the regular
rate established by the hospital for an
item or service provided to a specific
group of paying patients. This includes
all of the following as defined under
this section:
(1) Gross charge.
(2) Payer-specific negotiated charge.
(3) De-identified minimum negotiated
charge.
(4) De-identified maximum negotiated
charge.
(5) Discounted cash price.
Third party payer means an entity
that is, by statute, contract, or
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agreement, legally responsible for
payment of a claim for a healthcare item
or service.
§ 180.30
Applicability.
(a) General applicability. Except as
provided in paragraph (b) of this
section, the requirements of this part
apply to hospitals as defined at § 180.20.
(b) Exception. Federally owned or
operated hospitals are deemed by CMS
to be in compliance with the
requirements of this part including but
not limited to:
(1) Federally owned hospital
facilities, including facilities operated
by the U.S. Department of Veterans
Affairs and Military Treatment Facilities
operated by the U.S. Department of
Defense.
(2) Hospitals operated by an Indian
Health Program as defined in section
4(12) of the Indian Health Care
Improvement Act.
(c) Online availability. Unless
otherwise stated, hospital charge
information must be made public
electronically via the internet.
Subpart B—Public Disclosure
Requirements
§ 180.40
General requirements.
A hospital must make public the
following:
(a) A machine-readable file containing
a list of all standard charges for all items
and services as provided in § 180.50.
(b) A consumer-friendly list of
standard charges for a limited set of
shoppable services as provided in
§ 180.60.
§ 180.50 Requirements for making public
hospital standard charges for all items and
services.
(a) General rules. (1) A hospital must
establish, update, and make public a list
of all standard charges for all items and
services online in the form and manner
specified in this section.
(2) Each hospital location operating
under a single hospital license (or
approval) that has a different set of
standard charges than the other
location(s) operating under the same
hospital license (or approval) must
separately make public the standard
charges applicable to that location.
(b) Required data elements. A hospital
must include all of the following
corresponding data elements in its list
of standard charges, as applicable:
(1) Description of each item or service
provided by the hospital.
(2) Gross charge that applies to each
individual item or service when
provided in, as applicable, the hospital
inpatient setting and outpatient
department setting.
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65603
(3) Payer-specific negotiated charge
that applies to each item or service
when provided in, as applicable, the
hospital inpatient setting and outpatient
department setting. Each payer-specific
negotiated charge must be clearly
associated with the name of the third
party payer and plan.
(4) De-identified minimum negotiated
charge that applies to each item or
service when provided in, as applicable,
the hospital inpatient setting and
outpatient department setting.
(5) De-identified maximum negotiated
charge that applies to each item or
service when provided in, as applicable,
the hospital inpatient setting and
outpatient department setting.
(6) Discounted cash price that applies
to each item or service when provided
in, as applicable, the hospital inpatient
setting and outpatient department
setting.
(7) Any code used by the hospital for
purposes of accounting or billing for the
item or service, including, but not
limited to, the Current Procedural
Terminology (CPT) code, the Healthcare
Common Procedure Coding System
(HCPCS) code, the Diagnosis Related
Group (DRG), the National Drug Code
(NDC), or other common payer
identifier.
(c) Format. The information described
in paragraph (b) of this section must be
published in a single digital file that is
in a machine-readable format.
(d) Location and accessibility. (1) A
hospital must select a publicly available
website for purposes of making public
the standard charge information
required under paragraph (b) of this
section.
(2) The standard charge information
must be displayed in a prominent
manner and clearly identified with the
hospital location with which the
standard charge information is
associated.
(3) The hospital must ensure that the
standard charge information is easily
accessible, without barriers, including
but not limited to ensuring the
information is accessible:
(i) Free of charge;
(ii) Without having to establish a user
account or password; and
(iii) Without having to submit
personal identifying information (PII).
(4) The digital file and standard
charge information contained in that file
must be digitally searchable.
(5) The file must use the following
naming convention specified by CMS,
specifically: <ein>_<hospital-name>_
standardcharges.[json|xml|csv].
(e) Frequency of updates. The hospital
must update the standard charge
information described in paragraph (b)
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of this section at least once annually.
The hospital must clearly indicate the
date that the standard charge data was
most recently updated, either within the
file itself or otherwise clearly associated
with the file.
§ 180.60 Requirements for displaying
shoppable services in a consumer-friendly
manner.
(a) General rules. (1) A hospital must
make public the standard charges
identified in paragraphs (b)(3) through
(6) of this section, for as many of the 70
CMS-specified shoppable services that
are provided by the hospital, and as
many additional hospital-selected
shoppable services as is necessary for a
combined total of at least 300 shoppable
services.
(i) In selecting a shoppable service for
purposes of this section, a hospital must
consider the rate at which it provides
and bills for that shoppable service.
(ii) If a hospital does not provide 300
shoppable services, the hospital must
make public the information specified
in paragraph (b) of this section for as
many shoppable services as it provides.
(2) A hospital is deemed by CMS to
meet the requirements of this section if
the hospital maintains an internet-based
price estimator tool which meets the
following requirements.
(i) Provides estimates for as many of
the 70 CMS-specified shoppable
services that are provided by the
hospital, and as many additional
hospital-selected shoppable services as
is necessary for a combined total of at
least 300 shoppable services.
(ii) Allows healthcare consumers to,
at the time they use the tool, obtain an
estimate of the amount they will be
obligated to pay the hospital for the
shoppable service.
(iii) Is prominently displayed on the
hospital’s website and accessible to the
public without charge and without
having to register or establish a user
account or password.
(b) Required data elements. A hospital
must include, as applicable, all of the
following corresponding data elements
when displaying its standard charges
(identified in paragraphs (b)(3) through
(6) of this section) for its list of
shoppable services selected under
paragraph (a)(1) of this section:
(1) A plain-language description of
each shoppable service.
(2) An indicator when one or more of
the CMS-specified shoppable services
are not offered by the hospital.
(3) The payer-specific negotiated
charge that applies to each shoppable
service (and to each ancillary service, as
applicable). Each list of payer-specific
negotiated charges must be clearly
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associated with the name of the third
party payer and plan.
(4) The discounted cash price that
applies to each shoppable service (and
corresponding ancillary services, as
applicable). If the hospital does not offer
a discounted cash price for one or more
shoppable services (or corresponding
ancillary services), the hospital must list
its undiscounted gross charge for the
shoppable service (and corresponding
ancillary services, as applicable).
(5) The de-identified minimum
negotiated charge that applies to each
shoppable service (and to each
corresponding ancillary service, as
applicable).
(6) The de-identified maximum
negotiated charge that applies to each
shoppable service (and to each
corresponding ancillary service, as
applicable).
(7) The location at which the
shoppable service is provided,
including whether the standard charges
identified in paragraphs (b)(3) through
(6) of this section for the shoppable
service apply at that location to the
provision of that shoppable service in
the inpatient setting, the outpatient
department setting, or both.
(8) Any primary code used by the
hospital for purposes of accounting or
billing for the shoppable service,
including, as applicable, the Current
Procedural Terminology (CPT) code, the
Healthcare Common Procedure Coding
System (HCPCS) code, the Diagnosis
Related Group (DRG), or other common
service billing code.
(c) Format. A hospital has discretion
to choose a format for making public the
information described in paragraph (b)
of this section online.
(d) Location and accessibility of
online data. (1) A hospital must select
an appropriate publicly available
internet location for purposes of making
public the information described in
paragraph (b) of this section.
(2) The information must be displayed
in a prominent manner that identifies
the hospital location with which the
information is associated.
(3) The shoppable services
information must be easily accessible,
without barriers, including but not
limited to ensuring the information is:
(i) Free of charge.
(ii) Accessible without having to
register or establish a user account or
password.
(iii) Accessible without having to
submit personal identifying information
(PII).
(iv) Searchable by service description,
billing code, and payer.
(e) Frequency. The hospital must
update the standard charge information
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described in paragraph (b) of this
section at least once annually. The
hospital must clearly indicate the date
that the information was most recently
updated.
Subpart C—Monitoring and Penalties
for Noncompliance
§ 180.70
Monitoring and enforcement.
(a) Monitoring. (1) CMS evaluates
whether a hospital has complied with
the requirements under §§ 180.40,
180.50, and 180.60.
(2) CMS may use methods to monitor
and assess hospital compliance with the
requirements under this part, including,
but not limited to, the following, as
appropriate:
(i) CMS’ evaluation of complaints
made by individuals or entities to CMS.
(ii) CMS review of individuals’ or
entities’ analysis of noncompliance.
(iii) CMS audit of hospitals’ websites.
(b) Actions to address hospital
noncompliance. If CMS concludes that
the hospital is noncompliant with one
or more of the requirements of § 180.40,
§ 180.50, or § 180.60, CMS may take any
of the following actions, which
generally, but not necessarily, will occur
in the following order:
(1) Provide a written warning notice
to the hospital of the specific
violation(s).
(2) Request a corrective action plan
from the hospital if its noncompliance
constitutes a material violation of one or
more requirements, according to
§ 180.80.
(3) Impose a civil monetary penalty
on the hospital and publicize the
penalty on a CMS website according to
§ 180.90 if the hospital fails to respond
to CMS’ request to submit a corrective
action plan or comply with the
requirements of a corrective action plan.
§ 180.80
Corrective action plans.
(a) Material violations requiring a
corrective action plan. CMS determines
if a hospital’s noncompliance with the
requirements of this part constitutes
material violation(s) requiring a
corrective action plan. A material
violation may include, but is not limited
to, the following:
(1) A hospital’s failure to make public
its standard charges required by
§ 180.40.
(2) A hospital’s failure to make public
its standard charges in the form and
manner required under §§ 180.50 and
180.60.
(b) Notice of violation. CMS may
request that a hospital submit a
corrective action plan, specified in a
notice of violation issued by CMS to a
hospital.
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(c) Compliance with corrective action
plan requests and corrective actions. (1)
A hospital required to submit a
corrective action plan must do so, in the
form and manner, and by the deadline,
specified in the notice of violation
issued by CMS to the hospital and must
comply with the requirements of the
corrective action plan.
(2) A hospital’s corrective action plan
must specify elements including, but
not limited to:
(i) The corrective actions or processes
the hospital will take to address the
deficiency or deficiencies identified by
CMS.
(ii) The timeframe by which the
hospital will complete the corrective
action.
(3) A corrective action plan is subject
to CMS review and approval.
(4) After CMS’ review and approval of
a hospital’s corrective action plan, CMS
may monitor and evaluate the hospital’s
compliance with the corrective actions.
(d) Noncompliance with corrective
action plan requests and requirements.
(1) A hospital’s failure to respond to
CMS’ request to submit a corrective
action plan includes failure to submit a
corrective action plan in the form,
manner, or by the deadline, specified in
a notice of violation issued by CMS to
the hospital.
(2) A hospital’s failure to comply with
the requirements of a corrective action
plan includes failure to correct
violation(s) within the specified
timeframes.
§ 180.90
Civil monetary penalties.
(a) Basis for imposing civil monetary
penalties. CMS may impose a civil
monetary penalty on a hospital
identified as noncompliant according to
§ 180.70, and that fails to respond to
CMS’ request to submit a corrective
action plan or comply with the
requirements of a corrective action plan
as described in § 180.80(d).
(b) Notice of imposition of a civil
monetary penalty. (1) If CMS imposes a
penalty in accordance with this part,
CMS provides a written notice of
imposition of a civil monetary penalty
to the hospital via certified mail or
another form of traceable carrier.
(2) This notice to the hospital may
include, but is not limited to, the
following:
(i) The basis for the hospital’s
noncompliance, including, but not
limited to, the following:
(A) CMS’ determination as to which
requirement(s) the hospital has violated.
(B) The hospital’s failure to respond
to CMS’ request to submit a corrective
action plan or comply with the
requirements of a corrective action plan,
as described in § 180.80(d).
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(ii) CMS’ determination as to the
effective date for the violation(s). This
date is the latest date of the following:
(A) The first day the hospital is
required to meet the requirements of
this part.
(B) If a hospital previously met the
requirements of this part but did not
update the information annually as
required, the date 12 months after the
date of the last annual update specified
in information posted by the hospital.
(C) A date determined by CMS, such
as one resulting from monitoring
activities specified in § 180.70, or
development of a corrective action plan
as specified in § 180.80.
(iii) The amount of the penalty as of
the date of the notice.
(iv) A statement that a civil monetary
penalty may continue to be imposed for
continuing violation(s).
(v) Payment instructions.
(vi) Intent to publicize the hospital’s
noncompliance and CMS’ determination
to impose a civil monetary penalty on
the hospital for noncompliance with the
requirements of this part by posting the
notice of imposition of a civil monetary
penalty on a CMS website.
(vii) A statement of the hospital’s
right to a hearing according to subpart
D of this part.
(viii) A statement that the hospital’s
failure to request a hearing within 30
calendar days of the issuance of the
notice permits the imposition of the
penalty, and any subsequent penalties
pursuant to continuing violations,
without right of appeal in accordance
with § 180.110.
(3) If the civil monetary penalty is
upheld, in part, by a final and binding
decision according to subpart D of this
part, CMS will issue a modified notice
of imposition of a civil monetary
penalty, to conform to the adjudicated
finding.
(c) Amount of the civil monetary
penalty. (1) CMS may impose a civil
monetary penalty upon a hospital for a
violation of each requirement of this
part.
(2) The maximum daily dollar amount
for a civil monetary penalty to which a
hospital may be subject is $300. Even if
the hospital is in violation of multiple
discrete requirements of this part, the
maximum total sum that a single
hospital may be assessed per day is
$300.
(3) The amount of the civil monetary
penalty will be adjusted annually using
the multiplier determined by OMB for
annually adjusting civil monetary
penalty amounts under part 102 of this
title.
(d) Timing of payment of civil
monetary penalty. (1) A hospital must
PO 00000
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Sfmt 4700
65605
pay the civil monetary penalty in full
within 60 calendar days after the date of
the notice of imposition of a civil
monetary penalty from CMS under
paragraph (b) of this section.
(2) In the event a hospital requests a
hearing, pursuant to subpart D of this
part, the hospital must pay the amount
in full within 60 calendar days after the
date of a final and binding decision,
according to subpart D of this part, to
uphold, in whole or in part, the civil
monetary penalty.
(3) If the 60th calendar day described
in paragraphs (d)(1) and (2) of this
section is a weekend or a Federal
holiday, then the timeframe is extended
until the end of the next business day.
(e) Posting of notice. (1) CMS will post
the notice of imposition of a civil
monetary penalty described in
paragraphs (b) and (f) of this section on
a CMS website.
(2) In the event that a hospital elects
to request a hearing, pursuant to subpart
D of this part:
(i) CMS will indicate in its posting,
under paragraph (e)(1) of this section,
that the civil monetary penalty is under
review.
(ii) If the civil monetary penalty is
upheld, in whole, by a final and binding
decision according to subpart D of this
part, CMS will maintain the posting of
the notice of imposition of a civil
monetary penalty on a CMS website.
(iii) If the civil monetary penalty is
upheld, in part, by a final and binding
decision according to subpart D of this
part, CMS will issue a modified notice
of imposition of a civil monetary
penalty according to paragraph (b)(3) of
this section, to conform to the
adjudicated finding. CMS will make this
modified notice public on a CMS
website.
(iv) If the civil monetary penalty is
overturned in full by a final and binding
decision according to subpart D of this
part, CMS will remove the notice of
imposition of a civil monetary penalty
from a CMS website.
(f) Continuing violations. CMS may
issue subsequent notice(s) of imposition
of a civil monetary penalty, according to
paragraph (b) of this section, that result
from the same instance(s) of
noncompliance.
Subpart D—Appeals of Civil Monetary
Penalties
§ 180.100
Appeal of penalty.
(a) A hospital upon which CMS has
imposed a penalty under this part may
appeal that penalty in accordance with
subpart D of part 150 of this title, except
as specified in paragraph (b) of this
section.
E:\FR\FM\27NOR2.SGM
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(b) For purposes of applying subpart
D of part 150 of this title to appeals of
civil monetary penalties under this part:
(1) Civil money penalty means a civil
monetary penalty according to § 180.90.
(2) Respondent means a hospital that
received a notice of imposition of a civil
monetary penalty according to
§ 180.90(b).
(3) References to a notice of
assessment or proposed assessment, or
notice of proposed determination of
civil monetary penalties, are considered
to be references to the notice of
imposition of a civil monetary penalty
specified in § 180.90(b).
(4) Under § 150.417(b) of this title, in
deciding whether the amount of a civil
money penalty is reasonable, the ALJ
may only consider evidence of record
relating to the following:
(i) The hospital’s posting(s) of its
standard charges, if available.
(ii) Material the hospital timely
previously submitted to CMS (including
VerDate Sep<11>2014
22:36 Nov 26, 2019
Jkt 250001
with respect to corrective actions and
corrective action plans).
(iii) Material CMS used to monitor
and assess the hospital’s compliance
according to § 180.70(a)(2).
(5) The ALJ’s consideration of
evidence of acts other than those at
issue in the instant case under
§ 150.445(g) of this title does not apply.
§ 180.110
Failure to request a hearing.
(a) If a hospital does not request a
hearing within 30 calendar days of the
issuance of the notice of imposition of
a civil monetary penalty described in
§ 180.90(b), CMS may impose the civil
monetary penalty indicated in such
notice and may impose additional
penalties pursuant to continuing
violations according to § 180.90(f)
without right of appeal in accordance
with this part.
(1) If the 30th calendar day described
in this paragraph (a) is a weekend or a
Federal holiday, then the timeframe is
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extended until the end of the next
business day.
(2) [Reserved]
(b) The hospital has no right to appeal
a penalty with respect to which it has
not requested a hearing in accordance
with § 150.405 of this title, unless the
hospital can show good cause, as
determined at § 150.405(b) of this title,
for failing to timely exercise its right to
a hearing.
PARTS 181–199—[RESERVED]
Dated: November 5, 2019.
Seema Verma,
Administrator, Centers for Medicare &
Medicaid Services.
Dated: November 7, 2019.
Alex M. Azar II,
Secretary, Department of Health and Human
Services.
[FR Doc. 2019–24931 Filed 11–15–19; 4:15 pm]
BILLING CODE 4120–01–P
E:\FR\FM\27NOR2.SGM
27NOR2
]]>Agencies
[Federal Register Volume 84, Number 229 (Wednesday, November 27, 2019)]
[Rules and Regulations]
[Pages 65524-65606]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-24931]
Federal Register / Vol. 84 , No. 229 / Wednesday, November 27, 2019 /
Rules and Regulations
[[Page 65524]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Subchapter E
[CMS-1717-F2]
RIN 0938-AU22
Medicare and Medicaid Programs: CY 2020 Hospital Outpatient PPS
Policy Changes and Payment Rates and Ambulatory Surgical Center Payment
System Policy Changes and Payment Rates. Price Transparency
Requirements for Hospitals To Make Standard Charges Public
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
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SUMMARY: This final rule establishes requirements for hospitals
operating in the United States to establish, update, and make public a
list of their standard charges for the items and services that they
provide. These actions are necessary to promote price transparency in
health care and public access to hospital standard charges. By
disclosing hospital standard charges, we believe the public (including
patients, employers, clinicians, and other third parties) will have the
information necessary to make more informed decisions about their care.
We believe the impact of these final policies will help to increase
market competition, and ultimately drive down the cost of health care
services, making them more affordable for all patients.
DATES: This final rule is effective on January 1, 2021.
FOR FURTHER INFORMATION CONTACT:
Price Transparency of Hospital Standard Charges, contact Dr. Terri
Postma or Elizabeth November, (410) 786-8465 or via email at
[email protected].
Quality Measurement Relating to Price Transparency, contact Dr.
Reena Duseja or Dr. Terri Postma via email at
[email protected].
SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments
received before the close of the comment period are available for
viewing by the public, including any personally identifiable or
confidential business information that is included in a comment. We
post all comments received before the close of the comment period on
the following website as soon as possible after they have been
received: https://www.regulations.gov/. Follow the search instructions
on that website to view public comments.
Current Procedural Terminology (CPT) Copyright Notice
Throughout this final rule, we use CPT codes and descriptions to
refer to a variety of services. We note that CPT codes and descriptions
are copyright 2018 American Medical Association. All Rights Reserved.
CPT is a registered trademark of the American Medical Association
(AMA). Applicable Federal Acquisition Regulations (FAR) and Defense
Federal Acquisition Regulations (DFAR) apply.
Table of Contents
I. Summary and Background
A. Executive Summary
B. Statutory Basis and Current Guidance
II. Requirements for Hospitals To Make Public a List of Their
Standard Charges
A. Introduction and Overview
B. Definition of ``Hospital'' and Hospitals Regarded as Having
Met Requirements
C. Definition of ``Items and Services'' Provided by Hospitals
D. Definitions for Types of ``Standard Charges''
E. Requirements for Public Disclosure of All Hospital Standard
Charges for All Items and Services in a Comprehensive Machine-
Readable File
F. Requirements for Displaying Shoppable Services in a Consumer-
Friendly Manner
G. Monitoring and Enforcement of Requirements for Making
Standard Charges Public
H. Appeals Process
III. Comments Received in Response To Request for Information:
Quality Measurement Relating to Price Transparency for Improving
Beneficiary Access to Provider and Supplier Charge Information
IV. Collection of Information Requirements
A. Response to Comments
B. ICR for Hospital Price Transparency
V. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Anticipated Effects
D. Alternatives Considered
E. Accounting Statement and Table
F. Regulatory Reform Analysis Under E.O. 13771
G. Conclusion
Regulation Text
I. Summary and Background
A. Executive Summary
1. Purpose
In this final rule, we establish requirements for all hospitals
(including hospitals not paid under the Medicare Outpatient Prospective
Payment System (OPPS)) in the United States for making hospital
standard charges available to the public pursuant to section 2718(e) of
the PHS Act, as well as an enforcement scheme under section 2718(b)(3)
of the PHS Act to enforce those requirements. These requirements, as
well as the enforcement scheme, are additionally authorized by section
1102(a) of the Social Security Act.
This final rule also addresses comments we received on our
proposals to implement section 2718(b) and (e), as well as a request
for information on quality measurement relating to price transparency
included in the ``Medicare Program; Proposed Changes to Hospital
Outpatient Prospective Payment and Ambulatory Surgical Center Payment
Systems and Quality Reporting Programs; Price Transparency of Hospital
Standard Charges; Proposed Revisions of Organ Procurement Organizations
Conditions of Coverage; Proposed Prior Authorization Process and
Requirements for Certain Covered Outpatient Department Services;
Potential Changes to the Laboratory Date of Service Policy; Proposed
Changes to Grandfathered Children's Hospitals-Within-Hospitals'' (84 FR
39398 through 39644), herein referred to as the ``CY 2020 OPPS/ASC
proposed rule,'' which was displayed in the Federal Register on July
29, 2019, with a comment period that ended on September 27, 2019.
The final rule with comment period titled ``Medicare Program:
Changes to Hospital Outpatient Prospective Payment and Ambulatory
Surgical Center Payment Systems and Quality Reporting Programs;
Revisions of Organ Procurement Organizations Conditions of Coverage;
Prior Authorization Process and Requirements for Certain Covered
Outpatient Department Services; Potential Changes to the Laboratory
Date of Service Policy; Changes to Grandfathered Children's Hospitals-
Within-Hospitals; Notice of Closure of Two Teaching Hospitals and
Opportunity to Apply for Available Slots,'' referred to hereinafter as
the ``CY 2020 OPPS/ASC final rule with comment period,'' was displayed
in the Federal Register on November 1, 2019. In that final rule with
comment period, we explained our intent to summarize and respond to
public comments on the proposed requirements for hospitals to make
public their standard charges in a forthcoming final rule. This final
rule is being published as a supplement to the CY 2020 OPPS/ASC final
rule with comment period.
2. Summary of the Major Provisions
We are adding a new Part 180--Hospital Price Transparency to Title
45 of the Code of Federal Regulations (CFR) that will codify our
regulations on price transparency that implement section
[[Page 65525]]
2718(e) of the PHS Act. In this final rule, we are finalizing the
following policies: (1) A definition of ``hospital''; (2) definitions
for five types of ``standard charges'' (specifically, gross charges and
payer-specific negotiated charges, as proposed, plus the discounted
cash price, the de-identified minimum negotiated charge, and the de-
identified maximum negotiated charge) that hospitals would be required
to make public; (3) a definition of hospital ``items and services''
that would include all items and services (both individual and
packaged) provided by the hospital to a patient in connection with an
inpatient admission or an outpatient department visit; (4) federally
owned/operated facilities are deemed to have met all requirements; (5)
requirements for making public a machine-readable file that contains a
hospital's gross charges and payer-specific negotiated charges, as
proposed, plus discounted cash prices, the de-identified minimum
negotiated charge, and the de-identified maximum negotiated charge for
all items and services provided by the hospital; (6) requirements for
making public payer-specific negotiated charges, as proposed, plus
discounted cash prices, the de-identified minimum negotiated charge,
and the de-identified maximum negotiated charge, for 300 ``shoppable''
services that are displayed and packaged in a consumer-friendly manner,
plus a policy to deem hospitals that offer internet-based price
estimator tools as having met this requirement; (7) monitoring hospital
noncompliance with requirements for publicly disclosing standard
charges; (8) actions that would address hospital noncompliance, which
include issuing a written warning notice, requesting a corrective
action plan (CAP), and imposing civil monetary penalties (CMPs) on
noncompliant hospitals and publicizing these penalties on a CMS
website; and (9) appeals of CMPs.
3. Summary of Costs and Benefits
We estimate the total burden for hospitals to review and post their
standard charges for the first year to be 150 hours per hospital at
$11,898.60 per hospital for a total burden of 900,300 hours (150 hours
x 6,002 hospitals) and total cost of $71,415,397 ($11,898.60 x 6,002
hospitals), as discussed in section V of this final rule. We estimate
the total annual burden for hospitals to review and post their standard
charges for subsequent years to be 46 hours per hospital at $3,610.88
per hospital for a total annual burden for subsequent years of 276,092
hours (46 hours x 6,002 hospitals) and total annual cost of $21,672,502
($3,610.88 x 6,002 hospitals).
B. Statutory Basis and Current Guidance
Section 1001 of the Patient Protection and Affordable Care Act
(ACA) (Pub. L. 111-148), as amended by section 10101 of the Health Care
and Education Reconciliation Act of 2010 (Pub. L. 111-152), amended
Title XXVII of the PHS Act, in part, by adding a new section 2718(e) of
the PHS Act. Section 2718 of the PHS Act, entitled ``Bringing Down the
Cost of Health Care Coverage,'' requires each hospital operating within
the United States for each year to establish (and update) and make
public a list of the hospital's standard charges for items and services
provided by the hospital, including for diagnosis related groups (DRGs)
established under section 1886(d)(4) of the Social Security Act (SSA).
In the FY 2015 inpatient prospective payment system (IPPS)/long-
term care hospital (LTCH) prospective payment system (PPS) proposed and
final rules (79 FR 28169 and 79 FR 50146, respectively), we reminded
hospitals of their obligation to comply with the provisions of section
2718(e) of the PHS Act and provided guidelines for its implementation.
At that time, we required hospitals to either make public a list of
their standard charges or their policies for allowing the public to
view a list of those charges in response to an inquiry. In addition, we
stated that we expected hospitals to update the information at least
annually, or more often as appropriate, to reflect current charges. We
also encouraged hospitals to undertake efforts to engage in consumer-
friendly communication of their charges to enable consumers to compare
charges for similar services across hospitals and to help consumers
understand what their potential financial liability might be for items
and services they obtain at the hospital.
In the FY 2019 IPPS/LTCH PPS proposed rule and final rule (83 FR
20164 and 83 FR 41144, respectively), we again reminded hospitals of
their obligation to comply with the provisions of section 2718(e) of
the PHS Act and updated our guidelines for its implementation. The
announced update to our guidelines became effective January 1, 2019,
and took one step to further improve the public accessibility of
standard charge information. Specifically, we updated our guidelines to
require hospitals to make available a list of their current standard
charges via the internet in a machine-readable format and to update
this information at least annually, or more often as appropriate. We
subsequently published two sets of Frequently Asked Questions (FAQs)
\1\ that provided additional guidance to hospitals, including a FAQ
clarifying that while hospitals could choose the format they would use
to make public a list of their standard charges, the publicly posted
information should represent their standard charges as reflected in the
hospital's chargemaster. We also clarified that the requirement applies
to all hospitals operating within the United States and to all items
and services provided by the hospital.
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\1\ Available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Downloads/FAQs-Req-Hospital-Public-List-Standard-Charges.pdf and https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ProspMedicareFeeSvcPmtGen/Downloads/Additional-Frequently-Asked-Questions-Regarding-Requirements-for-Hospitals-To-Make-Public-a-List-of-Their-Standard-Charges-via-the-internet.pdf.
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II. Requirements for Hospitals To Make Public a List of Their Standard
Charges
A. Introduction and Overview
1. Background
As healthcare costs continue to rise, healthcare affordability has
become an area of intense focus. Healthcare spending is projected to
consume almost 20 percent of the economy by 2027.\2\ One reason for
this upward spending trajectory is the lack of transparency in
healthcare pricing.3 4 5 6 Numerous studies suggest that
consumers want greater healthcare pricing transparency. For example, a
study of high deductible health plan enrollees found that respondents
wanted additional healthcare price information so they could make more
informed decisions about where to seek
[[Page 65526]]
care based on price.\7\ Health economists and other experts state that
significant cost containment cannot occur without widespread and
sustained transparency in provider prices.\8\ We believe there is a
direct connection between transparency in hospital standard charge
information and having more affordable healthcare and lower healthcare
coverage costs. We believe healthcare markets could work more
efficiently and provide consumers with higher-value healthcare if we
promote policies that encourage choice and competition.\9\ As we have
stated on numerous occasions, we believe that transparency in
healthcare pricing is critical to enabling patients to become active
consumers so that they can lead the drive towards value.\10\
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\2\ CMS. National Health Expenditures Projections, 2018-2027:
Forecast Summary. Available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/ForecastSummary.pdf.
\3\ Scheurer D. Lack of Transparency Plagues U.S. Health Care
System. The Hospitalist. 2013 May; 2013(5). Available at: https://www.the-hospitalist.org/hospitalist/article/125866/health-policy/lack-transparency-plagues-us-health-care-system.
\4\ Bees J. Survey Snapshot: Is Transparency the Answer to
Rising Health Care Costs? New England Journal of Medicine Catalyst.
March 20, 2019. Available at: https://catalyst.nejm.org/health-care-cost-transparency-answer/.
\5\ Wetzell S. Transparency: A Needed Step Towards Health Care
Affordability. American Health Policy Institute. March, 2014.
Available at: https://www.americanhealthpolicy.org/Content/documents/resources/Transparency%20Study%201%20-%20The%20Need%20for%20Health%20Care%20Transparency.pdf.
\6\ Robert Wood Johnson Foundation. How Price Transparency Can
Control the Cost of Health Care. March 1, 2016. Available at:
https://www.rwjf.org/en/library/research/2016/03/how-price-transparency-controls-health-care-cost.html.
\7\ Sinaiko AD, et al. Cost-Sharing Obligations, High-Deductible
Health Plan Growth, and Shopping for Health Care: Enrollees with
Skin in the Game. JAMA Intern Med. March 2016; 176(3), 395-397.
Available at: https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2482348.
\8\ Boynton A, and Robinson JC. Appropriate Use Of Reference
Pricing Can Increase Value. Health Affairs. July 7, 2015. Available
at: https://www.healthaffairs.org/do/10.1377/hblog20150707.049155/full/.
\9\ Azar AM, Mnuchin ST, and Acosta A. ``Reforming America's
Healthcare System Through Choice and Competition.'' December 3,
2018. Available at: https://www.hhs.gov/sites/default/files/Reforming-Americas-Healthcare-System-Through-Choice-and-Competition.pdf.
\10\ Bresnick J. Verma: Price Transparency Rule a ``First Step''
for Consumerism. January 11, 2019. Available at: https://healthpayerintelligence.com/news/verma-price-transparency-rule-a-first-step-for-consumerism.
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Many empirical studies have investigated the impact of price
transparency on markets, with most research, consistent with
predictions of standard economic theory, showing that price
transparency leads to lower and more uniform prices.\11\ Traditional
economic analysis suggests that if consumers were to have better
pricing information for healthcare services, providers would face
pressure to lower prices and provide better quality care.\12\ Falling
prices may, in turn, expand consumers' access to healthcare.\13\
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\11\ Congressional Research Service Report for Congress: Does
Price Transparency Improve Market Efficiency? Implications of
Empirical Evidence in Other Markets for the Healthcare Sector, July
24, 2007 (updated April 29, 2008). Available at: https://crsreports.congress.gov/product/pdf/RL/RL34101.
\12\ Ibid.
\13\ Ibid.
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Presently, however, the information that healthcare consumers need
to make informed decisions based on the prices of healthcare services
is not readily available. The Government Accountability Office (GAO)
report (2011), ``Health Care Price Transparency: Meaningful Price
Information is Difficult for Consumers to Obtain Prior to Receiving
Care,'' \14\ found that healthcare price opacity, coupled with the
often wide pricing disparities for particular procedures within the
same market, can make it difficult for consumers to understand
healthcare prices and to effectively shop for value. The report
references a number of barriers that make it difficult for consumers to
obtain price estimates in advance for healthcare services. Such
barriers include the difficulty of predicting healthcare service needs
in advance, a complex billing structure resulting in bills from
multiple providers, the variety of insurance benefit structures, and
concerns related to the public disclosure of rates negotiated between
providers and third party payers. The GAO report goes on to explore
various price transparency initiatives, including tools that consumers
could use to generate price estimates in advance of receiving a
healthcare service. The report notes that pricing information displayed
by tools varies across initiatives, in large part due to limits
reported by the initiatives in their access or authority to collect
certain necessary price data. According to the GAO report, transparency
initiatives with access to and integrated pricing data from both
providers and insurers were best able to provide reasonable estimates
of consumers' complete costs.
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\14\ GAO. Health Care Price Transparency: Meaningful Price
Information Is Difficult for Consumers to Obtain Prior to Receiving
Care. Publicly released October 24, 2011. Available at: https://www.gao.gov/products/GAO-11-791.
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The concept of making healthcare provider charges and insurance
benefit information available to consumers is not new; some States have
required disclosure of pricing information by providers and payers for
a number of years. More than half of the States have passed legislation
establishing price transparency websites or mandating that health
plans, hospitals, or physicians make price information available to
consumers.\15\ As of early 2012, there were 62 consumer-oriented,
State-based healthcare price comparison websites.\16\ Half of these
websites were launched after 2006, and most were developed and funded
by a State government agency (46.8 percent) or hospital association
(38.7 percent).\17\ Most websites report prices of inpatient care for
medical conditions (72.6 percent) or surgeries (71.0 percent).
Information about prices of outpatient services such as diagnostic or
screening procedures (37.1 percent), radiology studies (22.6 percent),
prescription drugs (14.5 percent), or laboratory tests (9.7 percent)
are reported less often.\18\
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\15\ Desai S, et al. Association Between Availability of a Price
Transparency Tool and Outpatient Spending. JAMA. 2016;315(17):1874-
1881. Available at: https://jamanetwork.com/journals/jama/fullarticle/2518264.
\16\ Kullgren JT, et al. A census of state health care price
transparency websites. JAMA. 2013;309(23):2437-2438. Available at:
https://jamanetwork.com/journals/jama/fullarticle/1697957.
\17\ Ibid.
\18\ Ibid.
---------------------------------------------------------------------------
Since the early 2000s, California-licensed hospitals have been
required to annually submit to the State, for public posting on a State
website: The charge description master (CDM, also known as a
``chargemaster''); a list of the hospital's average charges for at
least 25 common outpatient procedures, including ancillary services;
and the estimated percentage increase in gross revenue due to price
changes.\19\ The information is required to be submitted in plain
language using easily understood terminology.\20\ In 2012,
Massachusetts began requiring insurers to provide, upon request, the
estimated amount insured patients will be responsible to pay for
proposed admissions, procedures, or services based upon the information
available to the insurer at the time, and also began requiring
providers to disclose the charge for the admission, procedure, or
service upon request by the patient within 2 working days.\21\ Since
2015, Oregon has offered pricing data for the top 100 common hospital
outpatient procedures and top 50 common inpatient procedures on its
OregonHospitalGuide.org website, which displays the median negotiated
amount of the procedure by hospital and includes patient paid amounts
such as deductibles and copayments. The data are derived from State-
mandated annual hospital claims collection by the State's all payer
claims database (APCD) and represent the service package cost for each
of the procedures, including ancillary services and elements related to
the procedure, with the exception of professional fees which are billed
separately.\22\ More recently, in 2018, Colorado began requiring
hospitals to post the prices of the 50 most used DRG codes and the 25
most used outpatient CPT codes or healthcare services
[[Page 65527]]
procedure codes with a ``plain-English description'' of the service,
which must be updated at least annually.\23\
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\19\ Available at: https://oshpd.ca.gov/data-and-reports/cost-transparency/hospital-chargemasters/2018-chargemasters/.
\20\ Jenkins K. CMS Price Transparency Push Trails State
Initiatives. The National Law Review. February 8, 2019. Available
at: https://www.natlawreview.com/article/cms-price-transparency-push-trails-state-initiatives.
\21\ Ibid.
\22\ Available at: https://oregonhospitalguide.org/ and https://oregonhospitalguide.org/understanding-the-data/procedure-costs.html.
\23\ Jenkins K. CMS Price Transparency Push Trails State
Initiatives. The National Law Review. February 8, 2019. Available
at: https://www.natlawreview.com/article/cms-price-transparency-push-trails-state-initiatives.
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Not only have States taken an interest in price transparency, but
insurers and self-funded employers have also moved in this direction.
For example, some self-funded employers are using price transparency
tools to incentivize their employees to make cost-conscious decisions
when purchasing healthcare services. Most large insurers have embedded
cost estimation tools into their member websites, and some provide
their members with comparative cost and value information, which
includes rates that the insurers have negotiated with in-network
providers and suppliers.
Research suggests that making such consumer-friendly pricing
information available to the public can reduce healthcare costs for
consumers. Specifically, recent research evaluating the impact of New
Hampshire's price transparency efforts reveals that providing insured
patients with information about prices can have an impact on the out-
of-pocket costs consumers pay for medical imaging procedures, not only
by helping users of New Hampshire's website choose lower-cost options,
but also by leading to lower prices that benefited all patients,
including those in the State that did not use the
website.24 25
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\24\ Brown ZY. What would happen if hospitals openly shared
their prices? The Conversation. January 30, 2019. Available at:
https://theconversation.com/what-would-happen-if-hospitals-openly-shared-their-prices-110352.
\25\ Brown ZY. An Empirical Model of Price Transparency and
Markups in Health Care. August 2019. Available at: https://www-
personal.umich.edu/~zachb/
zbrown_empirical_model_price_transparency.pdf.
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Despite the growing consumer demand and awareness of the need for
healthcare pricing data, there continues to be a gap in easily
accessible pricing information for consumers to use for healthcare
shopping purposes. Specifically, there is inconsistent (and many times
nonexistent) availability of provider charge information, among other
limitations to understanding data made available or barriers to use of
the data. We believe this information gap can, in part, be filled by
the new requirements we are finalizing in this final rule, under
section 2718(e) of the PHS Act, as described below. As we explained in
the CY 2020 OPPS/ASC proposed rule, we believe that ensuring public
access to hospital standard charge data will promote and support
current and future price transparency efforts. We believe that this, in
turn, will enable healthcare consumers to make more informed decisions,
increase market competition, and ultimately drive down the cost of
healthcare services, making them more affordable for all patients.
2. Summary of Proposals and General Comments
In the CY 2020 OPPS/ASC proposed rule (84 FR 39398), we indicated
that health care consumers continue to lack the meaningful pricing
information they need to choose the healthcare services they want and
need despite our prior requirements for hospitals to publicly post
their chargemaster rates online. Based on feedback from hospitals and
consumers following the January 1, 2019 implementation of the revised
guidelines, and in accordance with President's Executive Order on
``Improving Price and Quality Transparency in American Healthcare to
Put Patients First'' (June 24, 2019), we proposed an expansion of
hospital charge display requirements to include charges and information
based on negotiated rates and for common shoppable items and services,
in a manner that is consumer-friendly. We also proposed to establish a
mechanism for monitoring and the application of penalties for
noncompliance.
Specifically, we proposed to add a new Part 180--Hospital Price
Transparency to title 45 CFR which would contain our regulations on
price transparency for purposes of section 2718(e) of the PHS Act. We
made proposals related to: (1) A definition of ``hospital''; (2)
different reporting requirements that would apply to certain hospitals;
(3) definitions for two types of ``standard charges'' (specifically,
gross charges and payer-specific negotiated charges) that hospitals
would be required to make public, and a request for public comment on
other types of standard charges that hospitals should be required to
make public; (4) a definition of hospital ``items and services'' that
would include all items and services (both individual and packaged)
provided by the hospital to a patient in connection with an inpatient
admission or an outpatient department visit; (5) requirements for
making public a machine-readable file that contains a hospital's gross
charges and payer-specific negotiated charges for all items and
services provided by the hospital; (6) requirements for making public
payer-specific negotiated charges for select hospital-provided items
and services that are ``shoppable'' and that are displayed and packaged
in a consumer-friendly manner; (7) monitoring for hospital
noncompliance with requirements for publicly disclosing standard
charges; (8) actions that would address hospital noncompliance, which
include issuing a written warning notice, requesting a CAP, and
imposing CMPs on noncompliant hospitals and publicizing these penalties
on a CMS website; and (9) appeals of CMPs.
Comment: Commenters included individual consumers, patient
advocates, hospitals and health systems, private insurers, employers,
medical associations, health benefits consultants, health information
technology (IT) organizations and organizations with price transparency
expertise, and academic institutions, among others. The majority of
commenters expressed broad support for our proposed policies (in whole
or in part) or agreed with the objectives we seek to accomplish through
these requirements. Many of these commenters stated that the disclosure
of hospital standard charges would serve to increase competition, drive
down healthcare prices, and allow consumers to compare healthcare costs
across facilities and to have better control over their budgets and the
financing of their healthcare needs.
Many commenters shared personal stories and examples of their
experiences, illustrating their desire to shop and learn healthcare
service prices in advance, and expressed frustration at their current
inability to prospectively access medical costs. Commenters also
provided specific examples of the ways that knowledge of healthcare
pricing in advance would benefit consumers and empower them to make
lower cost choices. Many commenters stated that consumers have a
``right to know'' or ``right to understand'' healthcare costs in
advance of receiving treatment.
Individual consumers that submitted comments generally praised the
proposals. One commenter stated it is the ``best attempt [thus] far to
provide price transparency to the American public.'' But other
commenters who supported hospital disclosure of charge information as a
necessary first step also recognized that such disclosure would still
fall, as one commenter stated, ``far short of the full price and cost
transparency we need in every part of our healthcare system.''
By contrast, many organizations, including those representing
hospitals and insurers, that submitted comments expressed strong
concerns with the proposals and generally questioned
[[Page 65528]]
whether hospital charge disclosures would effectively reduce healthcare
costs. Many of these entities commented on the practicalities and
usefulness of displaying hospital standard charges and asserted that
the proposal would not ``directly'' and ``materially'' serve the stated
interest of improving consumer access to healthcare pricing information
to help drive down healthcare costs.
Commenters that objected to the proposals also pointed out that
disclosure of hospital charges would be insufficient to permit a
consumer to obtain an out-of-pocket estimate in advance because
consumers with insurance need additional information from payers. Some
commenters generally indicated that the proposed disclosures would be
of little benefit or use to consumers. Further, several commenters
suggested that, for patients with health insurance, insurers, not
hospitals, should be the primary source of price information, and that
insurers should inform and educate their members on potential out-of-
pocket costs in advance of elective services. Some expressed concerns
that patients could be confused by hospital charge information and
misinterpret the standard charge data the hospital is required to
display.
Response: We thank the many commenters for their support of CMS'
price transparency initiative in general, and our proposals to require
hospitals to make public their standard charge information in
particular, which, for reasons articulated in the CY 2020 OPPS/ASC
proposed rule, we agree can improve consumer knowledge of the price of
healthcare items and services in advance. For example, disclosure of
payer-specific negotiated charges can help individuals with high
deductible health plans (HDHPs) or those with co-insurance determine
the portion of the negotiated charge for which they will be responsible
for out-of-pocket. We believe that regulations we are finalizing in
this final rule, implementing section 2718(e) of the PHS Act, requiring
hospitals make public standard charges, are imperative for several
reasons, including that consumers currently do not have the information
they need in a readily usable way or in context to inform their
healthcare decision-making. Further, we believe that greater
transparency will increase competition throughout the market and
address healthcare costs. For instance, disclosure of pricing
information will allow providers, hospitals, insurers, employers and
patients to begin to engage each other and better utilize market forces
to address the high cost of medical care in a more widespread fashion.
While we understand the commenters' concerns that disclosure of
hospital standard charges may not be used by all consumers, we disagree
that the availability of such data would be of little benefit to
consumers generally. We continue to believe there is a direct
connection between transparency in hospital standard charge information
and having more affordable healthcare and lower healthcare coverage
costs. We believe healthcare markets could work more efficiently and
provide consumers with higher-value healthcare if we promote policies
that encourage choice and competition. As we noted in the CY 2020 OPPS/
ASC proposed rule, and restated in section II.A.2 of this final rule,
numerous studies suggest that consumers want greater transparency and
price information so that they can make more informed decisions about
where to seek care based on price (84 FR 39572).
We do, however, agree with commenters who indicated that disclosure
of hospital charge information alone may be insufficient or does not go
far enough for consumers to know their out-of-pocket costs in advance
of receiving a healthcare service. As we indicated in the CY 2020 OPPS/
ASC proposed rule (84 FR 39574), there are many barriers to obtaining
an out-of-pocket estimate in advance and to make price comparisons for
healthcare services, including that the data necessary for such an
analysis are not available to the general public for personal use.
Necessary data to make out-of-pocket price comparisons depends on an
individual's circumstances. For example, a self-pay individual may
simply want to know the amount a healthcare provider will accept in
cash (or cash equivalent) as payment in full, while an individual with
health insurance may want to know the charge negotiated between the
healthcare provider and payer, along with additional individual
benefit-specific information such as the amount of cost-sharing, the
network status of the healthcare provider, how much of a deductible has
been paid to date, and other information. We therefore agree with
commenters who recognize that these policies to require hospitals to
make public their standard charges are merely a necessary first step.
We discuss the importance and necessity of specific types of hospital
standard charges in section II.D of this final rule.
In response to commenters suggesting that insurers should be the
primary source of price information, we disagree that insurers alone
should bear the complete burden or responsibility for price
transparency. At least one key reason that insurers cannot alone bear
the burden is that, in numerous instances, they are not participants in
the transaction; for example, as discussed in section II.D of this
final rule, self-pay patients and insured patients who are considering
paying in cash have an interest in understanding hospitals' cash
prices, or for employers who want to contract directly with hospitals.
We also note that the proposed rule entitled Transparency in Coverage
(file code CMS-9915-P) would place complementary transparency
requirements on most individual and group market health insurance
issuers and group health plans.
Comment: A few commenters asked CMS not to move forward with the
final rule, stating that price transparency should be done only at the
state level. These commenters expressed concern that CMS moving forward
in this area would either limit price transparency to a ``one size fits
all'' approach or complicate or undercut efforts already ongoing in
several states. These commenters suggested that instead of federal
mandates, CMS could work with hospitals to provide meaningful
information to patients about their out-of-pocket costs for their
hospital care by improving financial counseling, or provide grant
dollars for states to improve their own price transparency programs.
More generally, many commenters asserted that several hospitals
already respond to consumer requests for actionable healthcare pricing
information in advance of receiving care, such as through existing
tools, publicizing how and from whom patients can obtain price
estimates, providing individualized financial counseling, or a
combination of these methods.
Response: We believe it is appropriate to promulgate regulations
pursuant to section 2718(e) of the PHS Act.
We further believe that transparency in pricing is a national
issue, which Congress has recognized by enacting hospital price
transparency statutory requirements.
We appreciate the commenters' concerns about the possible
interactions between new federal requirements for hospitals to make
public standard charges and existing State price transparency
initiatives, or hospital initiatives. As we discussed in the CY 2020
OPPS/ASC proposed rule, we have sought ways to ensure sufficient
flexibility in the new requirements, particularly around the form and
[[Page 65529]]
manner of making public hospital price information, as well as the
frequency of making public this information. As with the proposed
requirements, we continue to believe that the requirements we are
finalizing in this final rule will align with and enhance ongoing State
and hospital efforts for the display of hospital charge information. We
note that while many States have made progress in promoting price
transparency, most State efforts continue to fall short. For example, a
group that tracks State progress found in their most recent report that
all but seven States scored an ``F'' on price transparency.\26\ States
that excel at promoting price transparency (for example, New Hampshire
and Maine, the only two States to receive an ``A'' rating) are also
States where the price of shoppable services has reportedly decreased
\27\ or fostered a more competitive market.\28\ We believe these final
rules will provide a national framework upon which States can either
begin or continue to build.
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\26\ de Brantes F, et al. Price Transparency & Physician Quality
Report Card 2017. Catalyst for Payment Reform. Available at: https://www.catalyze.org/wp-content/uploads/2017/11/Price-Transparency-and-Physician-Quality-Report-Card-2017_0-1.pdf.
\27\ Brown ZY. Equilibrium Effects of Health Care Price
Information. The Review of Economics and Statistics. Published
October 2019; 101:4, 699-712. Available at: https://www-
personal.umich.edu/~zachb/zbrown_eqm_effects_price_transparency.pdf.
\28\ Gudiksen KL, et al. The Secret of Health Care Prices: Why
Transparency Is in the Public Interest. California Health Care
Foundation. July 2019. Available at: https://www.chcf.org/wp-content/uploads/2019/06/SecretHealthCarePrices.pdf.
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We commend those hospitals that are already publicly releasing
their standard charges and providing patients individualized assistance
to help them understand their projected costs in advance of receiving
care. However, not all hospitals are prioritizing providing such
assistance. Moreover, we do not believe that such existing hospital
initiatives diminish the need to, and benefits of, establishing
consistent, nationwide requirements for hospitals to make public
standard charges. We encourage efforts to provide consumers with
additional price information (beyond the requirements established in
this final rule) and for hospitals to continue to educate and provide
prospective out-of-pocket information to patients. By doing so,
hospitals can help consumers gain an understanding of hospital standard
charge information and thereby support consumers in making cost
conscious decisions regarding their care in advance.
Comment: Some commenters generally indicated that the proposals for
hospitals to disclose their standard charges would be very burdensome
to implement. Several commenters also suggested that the proposed price
transparency requirements are contrary to the Patients over Paperwork
initiative, which is a CMS initiative that aims to remove regulatory
obstacles that get in the way of providers spending time with patients.
Response: The Patients over Paperwork initiative is in accord with
President Trump's Executive Order that directs federal agencies to
``cut the red tape'' to reduce burdensome regulations. Through
``Patients over Paperwork,'' CMS established an internal process to
evaluate and streamline regulations with a goal to reduce unnecessary
burden, to increase efficiencies, and to improve the beneficiary
experience.\29\ Generally, we believe the final requirements will
increase transparency in hospital charge information and will achieve
one of our primary goals of putting patients first and empowering them
to make the best decisions for themselves and their families.\30\
Efficiencies could also be gained through implementation of these
requirements for markets, providers and patients.31 32 33 To
implement section 2718(e) of the PHS Act and to achieve these goals,
some burden on hospitals is necessary. However, we have sought through
rulemaking to minimize the burden wherever possible.
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\29\ CMS.gov website, Patients Over Paperwork, at https://www.cms.gov/Outreach-and-Education/Outreach/Partnerships/PatientsOverPaperwork.html.
\30\ CMS.gov, Patients Over Paperwork webpage, available at
https://www.cms.gov/About-CMS/story-page/patients-over-paperwork.html; see also 84 FR 27021 (RFI describing CMS' top
priority as putting patients first and empowering them to make the
best decisions for themselves and their families).
\31\ Kim M. The Effect of Hospital Price Transparency in Health
Care Markets. 2011. Available at: https://repository.upenn.edu/dissertations/AAI3475926/.
\32\ CRS Report to Congress: Does Price Transparency Improve
Market Efficiency? Implications of Empirical Evidence in Other
Markets for the Health Sector. July 24, 2007. Available at: https://fas.org/sgp/crs/secrecy/RL34101.pdf.
\33\ Santa J. The Healthcare Imperative: Lowering Costs and
Improving Outcomes: Workshop Series Summary. 2010. Available at:
https://www.ncbi.nlm.nih.gov/books/NBK53921/.
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We acknowledge commenters' concerns related to burden. However, we
believe that the burdens placed on hospitals to make public their
standard charge data is outweighed by the benefit that the availability
of these data will have in informing patients regarding healthcare
costs and choices and improving overall market competition. Since we
believe that transparency is necessary to improve healthcare value and
empower patients, we believe the need justifies the additional burden.
While the burdens hospitals may incur to implement these requirements
might be administrative in nature, we believe that the benefits to
consumers, and to the public as a whole, justify this regulatory action
and that we are thereby prioritizing patients through this regulatory
action.
Comment: A few commenters offered suggestions for how to improve
hospital price transparency in general, including the following:
Presenting pricing data with quality, health outcomes, and
other relevant data.
Encouraging shared decision-making and cost of care
conversations between patients and clinicians at the point of care.
Addressing unexpected costs of care and providing consumer
protections from unexpected and unnecessary out-of-pocket spending,
such as those resulting from incidents where the patient is billed at
rates that are inconsistent with publicly posted prices for their payer
(referred to by a few commenters as ``price surprise''), or billed by
out-of-network providers that provided treatment at an in-network
facility, or the practice where the provider bills the patient for the
balance between the amount the patient's health insurance plan covers
and the amount that the provider charges (``balance billing'').
Response: We acknowledge that additional barriers have to be
overcome to allow consumers to identify appropriate sites of care for
needed healthcare services, determine out-of-pocket costs in advance,
and utilize indicators of quality of care to make value-based
decisions. As we have previously described, we believe the policies we
are finalizing in this final rule requiring hospitals to make public
standard charges are a necessary and important first step in ensuring
transparency in healthcare prices for consumers, but that the release
of hospital standard charge information is not sufficient by itself to
achieve our ultimate goals for price transparency. We also note that
our final policies do not preclude hospitals from undertaking
additional transparency efforts beyond making public their standard
charges. HHS continues to explore other authorities to further advance
the Administration's goal of enhancing consumers' ability to choose the
healthcare that is best for them, to make fully informed decisions
about their healthcare, and to access both useful price and quality
information and
[[Page 65530]]
provide incentives to find low-cost, high-quality care.
We agree that cost-of-care conversations at the point of care are
important. National surveys show that a majority of patients and
physicians want to have these conversations, but often the information
necessary for actionable conversations is unavailable.\34\ A recent
supplemental issue of the Annals of Internal Medicine \35\ highlighted
this issue and identified best practices for integrating cost-of-care
conversations at the point of care. We believe that disclosure of
hospital standard charges along with the disclosure of payer
information is the first step to ensuring patients and practitioners
have actionable data to support meaningful cost-of-care conversations.
We encourage these conversations and the disclosure of additional
relevant information to support patient decisions about their care.
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\34\ University of Utah Health website, Let's Talk About Money,
https://uofuhealth.utah.edu/value/lets-talk-about-money.php.
\35\ Fostering Productive Health Care Cost Conversations:
Sharing Lessons Learned and Best Practices. May 2019 Vol: 170, Issue
9_Supplement. Annals of Internal Medicine. Available at: https://annals.org/aim/issue/937992.
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We also agree that ``surprise billing'' is an issue of great
concern to consumers and of great interest to both federal and state
lawmakers. The policies finalized in this final rule will not resolve
that issue entirely, although it is possible that disclosure of
hospital standard charges could help mitigate some surprise billing
experienced by consumers.
Comment: One commenter suggested that Medicare and Medicaid
beneficiaries need an easy way to report fraud and balance billings by
providers.
Response: There already exist multiple avenues by which anyone
suspecting healthcare fraud, waste, or abuse in Medicare and/or
Medicaid may readily report it to oversight authorities. For example,
the HHS Office of Inspector General (OIG) Hotline accepts tips and
complaints from all sources about potential fraud, waste, abuse, and
mismanagement in HHS' programs (see https://oig.hhs.gov/FRAUD/REPORT-FRAUD/INDEX.ASP for instructions). Additionally, anyone wishing to
report instances of potential Medicare fraud may contact Medicare's
toll-free customer service operations at 1-800-MEDICARE (1-800-633-
4227), and obtain additional information at www.medicare.gov/fraud.
Anyone suspecting Medicaid fraud, waste, or abuse is encouraged to
report it to the Program Integrity contact of the respective State
Medicaid Agency (see https://www.medicaid.gov/about-us/contact-us/contact-state-page.html for the 50 United States, the District of
Columbia, the US Virgin Islands, and Puerto Rico).
B. Definition of ``Hospital'' and Hospitals Regarded as Having Met
Requirements
1. Definition of ``Hospital''
Section 2718(e) of the PHS Act does not define ``hospital.''
Initially, we considered proposing to adopt a definition of
``hospital'' that is used either in other sections of the PHS Act or in
the SSA, but we found that no single or combined definition was
suitable because those other definitions were applicable to specific
programs or Medicare participation and therefore had program-specific
requirements that made them too narrow for our purposes. For example,
we considered referencing the definition of ``hospital'' at section
1861(e) of the SSA because that definition is well understood by
institutions that participate as hospitals for purposes of Medicare.
However, we were concerned that doing so could have had the
unintentional effect of limiting the institutions we believe should be
covered by section 2718(e) of the PHS Act. Even so, we believe that the
licensing requirement described at section 1861(e)(7) of the SSA
captures the institutions that we believe should be characterized as
hospitals for purposes of this section.
Accordingly, we proposed to define a ``hospital'' as an institution
in any State in which State or applicable local law provides for the
licensing of hospitals and that is: (1) Licensed as a hospital pursuant
to such law; or (2) approved, by the agency of such State or locality
responsible for licensing hospitals, as meeting the standards
established for such licensing (which we proposed to codify in new 45
CFR 180.20).
We believe this proposed definition is the best way to ensure that
section 2718(e) of the PHS Act applies to each hospital operating
within the United States. First, in addition to applying to all
Medicare-enrolled hospitals (that, by definition, must be licensed by a
State as a hospital, or otherwise approved by the State or local
licensing agency as meeting hospital licensing standards), the proposed
definition would also capture any institutions that are, in fact,
operating as hospitals under State or local law, but might not be
considered hospitals for purposes of Medicare participation. As
discussed in section XVI.A.2. of the CY 2020 OPPS/ASC proposed rule (84
FR 39572 through 39573), many States have promoted price transparency
initiatives, and some require institutions they license as hospitals to
make certain charges public as a part of those initiatives. Therefore,
defining a hospital by its licensure (or by its approval by the State
or locality as meeting licensing standards) may carry the advantage of
aligning the application of Federal and State price transparency
initiatives to the same institutions.
We also proposed that, for purposes of the definition of
``hospital,'' a State includes each of the several States, the District
of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and
the Northern Mariana Islands. We stated that this proposed definition
of State would be consistent with how that term is defined under
section 2791(d)(14) of the PHS Act. We further stated that we believed
that adopting this definition of ``State'' for purposes of section
2718(e) of the PHS Act is appropriate because, unlike the other
provisions in section 2718 which apply to health insurance issuers,
section 2718(e) applies to hospitals. Therefore, it is distinguishable
from the approach outlined in the July 2014 letters \36\ to the
Territories regarding the PHS Act health insurance requirements
established or amended by Public Law 111-148 and Public Law 111-152.
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\36\ The July 2014 letters are available at: https://www.cms.gov/CCIIO/Resources/Letters/#Health%20Market%20Reforms.
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Our proposed definition focused on whether or not the institution
is licensed by the State or under applicable local law as a hospital,
or is approved, by the agency of such State or locality responsible for
licensing hospitals, as meeting the standards established for such
licensing. As such, a ``hospital'' under our proposed definition
includes each institution that satisfies the definition, regardless of
whether that institution is enrolled in Medicare or, if enrolled,
regardless of how Medicare designates the institution for its purposes.
Thus, we noted that the proposed definition includes critical access
hospitals (CAHs), inpatient psychiatric facilities (IPFs), sole
community hospitals (SCHs), and inpatient rehabilitation facilities
(IRFs), which we previously identified in our guidelines as being
hospitals for the purposes of section 2718(e) of the PHS Act,\37\ as
well as any other type of institution, so long as it is licensed as
[[Page 65531]]
a hospital (or otherwise approved) as meeting hospital licensing
standards.
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\37\ Available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ProspMedicareFeeSvcPmtGen/Downloads/Additional-Frequently-Asked-Questions-Regarding-Requirements-for-Hospitals-To-Make-Public-a-List-of-Their-Standard-Charges-via-the-internet.pdf.
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Finally, we noted that the proposed definition of ``hospital'' did
not include entities such as ambulatory surgical centers (ASCs) or
other non-hospital sites-of-care from which consumers may seek
healthcare items and services. We discussed that, for example, non-
hospital sites may offer ambulatory surgical services, laboratory or
imaging services, or other services that are similar or identical to
the services offered by hospital outpatient departments. In the
interest of increasing opportunities for healthcare consumers to
compare prices for similar services and promoting widespread
transparency in healthcare prices, we encouraged non-hospital sites-of-
care to make public their lists of standard charges in alignment with
the proposed requirements so that consumers could make effective
pricing comparisons.
We invited public comments on our proposed definition of
``hospital,'' which we proposed to codify at 45 CFR 180.20.
Comment: A few commenters requested that CMS finalize the
definition of hospital as proposed and applauded the agency's effort to
provide a standard definition of hospital for the purposes of making
standard charges public. One commenter agreed that the definition of
hospital should not be limited to only those hospitals that participate
in Medicare.
Several commenters suggested that the proposed definition of
hospital is too limited, and suggested that CMS expand the definition
to include other providers, such as physicians, ASCs, clinics,
community health centers, and skilled nursing facilities, in order to
better educate consumers on prices for services furnished by all
provider types. A few commenters generally suggested that CMS extend
price transparency policies to all service providers and all places of
service, not just hospitals or hospital settings. One commenter
suggested that CMS expand the definition of hospital to include any
facility that conducts surgery with anesthesia.
In particular, a few commenters explained the need for ASCs to be
transparent with their prices. One commenter noted that federally
mandated payment and other policies continue to emphasize patients
obtaining care in an outpatient setting instead of an inpatient acute
care hospital and therefore the definition of hospital should reflect
the greater role ASCs are taking in the healthcare system. Commenters
also noted that ASCs provide similar services to hospitals and may
therefore compete with hospitals. On the other hand, one commenter
urged CMS to apply price transparency standards to ASCs to minimize
incentives for hospitals to defer surgeries to new ASCs formed for the
purpose of circumventing disclosure of the hospital's charges.
Commenters took diverging positions on whether IRFs should be
required to make public standard charges. A few commenters urged that
IRFs be included among the entities required to make public standard
charges. On the other hand, as described and addressed in Section
II.B.2 of this final rule, a few commenters suggested that IRFs be
exempt from the reporting requirements.
Response: We thank the commenters that supported our proposed
definition of hospital. We believe that our proposed definition of
hospital, which we are finalizing, is a broad definition that will
encompass all institutions recognized by a State as a hospital. Because
section 2718(e) of the PHS Act applies to each hospital operating
within the United States, we do not believe we have the authority to
apply the price transparency requirements to non-hospital sites of
care. For this reason, we decline to adopt commenters' suggestions that
we expand the definition of hospital to include all service providers
and places of service, including to all places of service that provide
surgical services requiring anesthesia. We also decline the commenters'
suggestions to narrow the scope of the definition of hospital, for
instance to exclude IRFs where the IRFs otherwise meet the definition
of hospital we are finalizing. We believe such an approach would not be
consistent with section 2718(e) of the Act, which applies to each
hospital operating in the United States. Given the importance of making
public standard charge data to inform consumer healthcare decision-
making, we believe it is important to not overly constrict the
definition of hospital, which might permit subsets of hospitals that
meet the definition we are finalizing to avoid public disclosure of
their standard charges.
We defer to States' or localities' hospital licensing standards for
the determination of whether an entity falls within the definition of
hospital for the purposes of new 45 CFR part 180. Any facility licensed
by a State or locality as a hospital, or that is approved by the agency
of such State or locality responsible for licensing hospitals, as
meeting the standards established for such licensing, would be
considered a ``hospital'' for the purposes of section 2718(e) of the
Act and therefore required to comply with the requirements to make
public their standard charges in the form and manner required by this
final rule. For this reason, we cannot provide an exhaustive list of
institution types encompassed within State or locality hospital
licensing laws.
Regarding specific types of entities, however, we note that
healthcare providers such as ASCs, physicians, or community health
centers would not likely satisfy our specified definition of
``hospital'' since they are not likely to be licensed by a State or
locality as a hospital or to be approved by the agency of such State or
locality responsible for licensing hospitals as meeting the standards
established for such licensing. We recognize that ASCs provide many of
the same services as hospitals and note that many ASCs already engage
in price transparency efforts of their own. We have no knowledge that
existing price transparency initiatives (those in states that already
require hospitals to make public standard charges and our existing
guidance that hospitals make public standard charges pursuant to
section 2718(e) of the PHS Act) have engendered any shifts in business
between hospitals and ASCs. However, we believe it is reasonable to
assume that shifts to the most appropriate care setting may occur as
referring providers and their patients seek out the highest value
setting for their care.
Comment: A few commenters requested clarification on how the
requirements to make standard charges public and CMS compliance actions
would apply to hospital outpatient services that are provided off-
campus, or in hospital-affiliated or hospital-owned clinics. One
commenter asked whether all hospital locations under one CMS
Certification Number (CCN) are a single hospital for the purpose of the
proposal or whether they are considered separate locations. The
commenter expressed concern that there is an absence of any connection
between the CY 2020 OPPS/ASC proposed rule's definition of ``hospital''
and the CCN. The commenter expressed concern that this lack of clarity
would hinder compliance with the proposal if finalized and lessen the
impact of the proposed penalty.
Response: We did not propose to define the term ``hospital'' with
reference to the CCN, which is the hospital identification system we
use for purposes of Medicare and Medicaid. As we discussed in the CY
2020 OPPS/ASC proposed rule, we declined to base the definition of
hospital on Medicare participation, as the statute states all hospitals
operating within the United
[[Page 65532]]
States must make available a list of their standard charges.
As discussed in section II.E.6 of this final rule, each hospital
location operating under a single hospital license (or approval) that
has a different set of standard charges than the other location(s)
operating under the same hospital license (or approval) must separately
make public the standard charges applicable to that location, as stated
in 45 CFR 180.50. All hospital location(s) operating under the same
hospital license (or approval), such as a hospital's outpatient
department located at an off-campus location (from the main hospital
location) operating under the hospital's license, are subject to the
requirements in this rule.
Final Action: We are finalizing our proposal to define ``hospital''
to mean an institution in any State in which State or applicable local
law provides for the licensing of hospitals, that is licensed as a
hospital pursuant to such law, or is approved, by the agency of such
State or locality responsible for licensing hospitals, as meeting the
standards established for such licensing. For purposes of this
definition, a State includes each of the several States, the District
of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and
the Northern Mariana Islands. We are finalizing our proposal to set
forth the definition of ``hospital'' in the regulations at new 45 CFR
180.20.
2. Special Requirements That Apply to Certain Hospitals
In the CY 2020 OPPS/ASC proposed rule (84 FR 39575 through 39576),
we proposed that hospital standard charge disclosure requirements would
not apply to federally-owned or operated hospitals, including Indian
Health Service (IHS) facilities (including Tribally-owned and operated
facilities), Veterans Affairs (VA) facilities, and Department of
Defense (DOD) Military Treatment Facilities (MTFs), because, with the
exception of some emergency services, these facilities do not provide
services to the general public and the established payment rates for
services are not subject to negotiation. Instead, each of these
facility types is authorized to provide services only to patients who
meet specific eligibility criteria. For example, individuals must meet
the requirements enumerated at 42 CFR 136.22 through 136.23 to be
eligible to receive services from IHS and Tribal facilities. Similarly,
under 38 CFR 17.43 through 17.46, VA hospitals provide hospital,
domiciliary, and nursing home services to individuals with prior
authorization who are discharged or retiring members of the Armed
Forces and, upon authorization, beneficiaries of the PHS, Office of
Workers' Compensation Programs, and other Federal agencies (38 CFR
17.43). In addition, federally-owned or operated hospitals such as IHS
and Tribal facilities \38\ impose no cost-sharing, or, in the case of
VA hospitals \39\ and DOD MTFs,\40\ little cost-sharing. With respect
to such facilities where there is cost-sharing, the charges are
publicized through the Federal Register, Federal websites, or direct
communication and therefore known to the populations served by such
facilities in advance of receiving healthcare services. Only emergency
services at federally-owned or operated facilities are available to
non-eligible individuals. Because these hospitals do not treat the
general public, their rates are not subject to negotiation, and the
cost sharing obligations for hospital provided services are known to
their patients in advance, we believe it is appropriate to establish
different requirements that apply to these hospitals.
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\38\ Section 1680r(b) of the Indian Health Care Improvement Act
(25 U.S.C. 1680r).
\39\ VA cost-sharing information available at: https://www.va.gov/HEALTHBENEFITS/cost/copays.asp.
\40\ MTF cost-sharing information available at: https://tricare.mil/Costs/Compare and https://comptroller.defense.gov/Portals/45/documents/rates/fy2019/2019_ia.pdf.
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Specifically, we proposed to deem federally owned or operated
hospitals that do not treat the general public (except for emergency
services) and whose rates are not subject to negotiation, to be in
compliance with the requirements of section 2718(e) of the PHS Act
because their charges for hospital provided services are publicized to
their patients (for example, through the Federal Register) (proposed
new 45 CFR 180.30(b)). We also requested public comments on whether
exceptions to our proposed requirements might be warranted for
hospitals (for example, hospitals located in rural areas, CAHs, or
hospitals that treat special populations) that are not federally owned
or operated, while also ensuring that charges for the services provided
by such hospitals are available to the public.
Comment: Commenters diverged as to whether additional exceptions
should be made for providers that meet the proposed definition of
``hospital,'' such that these providers would not be required to make
standard charges public. One commenter strongly recommended that CMS
not allow any exceptions to requirements for entities that meet the
proposed definition of ``hospital.''
Other commenters requested that CMS exempt CAHs, rural hospitals,
and SCHs from part or all requirements to make standard charges public.
The commenters stated that the requirements would be challenging for
small facilities and cited several justifications for this possible
exemption, including that CAHs are already at a disadvantage when
negotiating rates with third-party payers; they lack the implementation
resources due to their size and reimbursement structure; and the
likelihood of their experiencing operational disruptions as a result of
diverting staff time and other resources to comply with the proposed
requirements. On the other hand, one commenter specified that patients
receiving care in CAHs and rural hospitals deserve to know how much
services cost in advance.
A few commenters argued that LTCHs and IRFs ought to be excluded or
exempted from the requirement of having to make public their standard
charges for a variety of reasons, including: (1) Commenters' belief
that patients are unable to schedule LTCH and IRF services in advance;
(2) patients treated in LTCHs and IRFs are there for follow-up care
after a short-term acute stay in a hospital and the critical nature of
the patients' condition, and the need for tailored treatment plans for
complex conditions, would not lend itself to being shoppable; (3)
imposing price transparency requirements on LTCHs will not serve the
objectives of increased market competition or quality improvement since
sometimes there is only one LTCH in a single market and there are fewer
than 400 total LTCHs nationwide.
One commenter requested that CMS exempt institutions and hospitals
that are not enrolled in Medicare and which are not reimbursed under a
prospective payment system.
Response: Our definition of ``hospital'' is any institution in any
State in which State or applicable local law provides for the licensing
of hospitals, that is licensed as a hospital pursuant to such law or is
approved, by the agency of such State or locality responsible for
licensing hospitals, as meeting the standards established for such
licensing. As we explained in section II.B.1 of this final rule, we
defer to States' or localities' hospital licensing standards for the
determination of whether an entity falls within the definition of
hospital for the purposes of new 45 CFR part 180. We continue to
believe this definition provides the best way to ensure that section
2718(e) of the PHS Act applies to each hospital operating
[[Page 65533]]
within the United States. It also may help align the application of
these requirements with State price transparency initiatives to the
same institutions.
We appreciate the operational, resource, and other concerns raised
by commenters, however, to the extent that IRFs, CAHs, LTCHs, rural
hospitals, and SCHs (among others) fall within our proposed definition
of hospital, we believe this is appropriate because patients, or their
caregivers, should have the opportunity to know in advance (as their
circumstances permit) standard charges for these entities' items and
services, to inform their healthcare decision-making. We decline to
either exempt such hospitals from making public standard charges, or
deem such hospitals as having met requirements for making public their
standard charges.
We recognize that some small hospitals, and rural hospitals,
including CAHs and SCHs may face challenges in implementing these
requirements, but we do not believe that such challenges are
insurmountable.
We also disagree with the commenters that suggest that services
provided by LTCHs and IRFs are not shoppable. Patients, and their
caregivers, seeking long term care or rehabilitation services may have
the opportunity to shop for these services in advance, and we believe
patients and caregivers should have access to consumer-friendly charge
information for such facilities. We believe that such information could
be used by patients or their caregivers to better inform their
decision-making when a patient transfers from an acute care facility
(that falls within our definition of ``hospital'') to a post-acute care
facility (that also falls within our definition of ``hospital'').
Further, we believe that patients with complex conditions, their
caregivers, or both, may have a particular interest in using price data
to inform healthcare decision-making. We believe that the data we are
requiring hospitals to make public could inform healthcare decision-
making by patients with complex conditions, their caregivers, or both,
even though they may require additional, or specialized treatment.
We do not believe that the absence of competition for items or
services in a market should excuse hospitals from making public
standard charges that consumers may need to inform the cost of their
care. We believe transparency in hospital prices is important to
consumers' healthcare decision-making, regardless of the number of
facilities in a particular market or nationwide.
We also decline the commenter's suggestion to exempt institutions
and hospitals from the requirements to make public standard charges if
they are not enrolled in Medicare. As we explained in the CY 2020 OPPS/
ASC proposed rule, we believe that such an approach would unduly limit
the applicability of the policies for hospitals to make public standard
charges under section 2718(e) of the PHS Act (84 FR 39575).
Final Action: We are finalizing as proposed to specify at 45 CFR
180.30 provisions on the applicability of the requirements for making
public standard charges. We are finalizing as proposed to specify in 45
CFR 180.30(a) that the requirements to make public standard charges
apply to hospitals as defined at 45 CFR 180.20.
We received no comments on our proposal to deem federally owned or
operated hospitals to be in compliance with the requirements to make
public standard charges. Therefore, we are finalizing, as proposed, to
specify in 45 CFR 180.30(b) that federally owned or operated hospitals
are deemed by CMS to be in compliance with the requirements for making
public standard charges, including but not limited to:
Federally owned hospital facilities, including facilities
operated by the U.S. Department of VA and MTF operated by the U.S.
Department of Defense.
Hospitals operated by an Indian Health Program as defined
in section 4(12) of the Indian Health Care Improvement Act.
We received no comments on our proposal that hospital charge
information must be made public electronically via the internet. We are
finalizing this requirement as proposed at 45 CFR 180.30(c).
C. Definition of ``Items and Services'' Provided by Hospitals
Section 2718(e) of the PHS Act requires that hospitals make public
a list of the hospital's standard charges for items and services
provided by the hospital, including for DRGs. We proposed that, for
purposes of section 2718(e) of the PHS Act, ``items and services''
provided by the hospital are all items and services, including
individual items and services and service packages, that could be
provided by a hospital to a patient in connection with an inpatient
admission or an outpatient department visit for which the hospital has
established a standard charge. Examples of these items and services
include, but are not limited to, supplies, procedures, room and board,
use of the facility and other items (generally described as facility
fees), services of employed physicians and non-physician practitioners
(generally reflected as professional charges), and any other items or
services for which a hospital has established a charge.
Our proposed definition included both individual items and services
as well as ``service packages'' for which a hospital has established a
charge. Every hospital maintains a file system known as a chargemaster,
which contains all billable procedure codes performed at the hospital,
along with descriptions of those codes and the hospitals' own list
prices. The format and contents of the chargemaster vary among
hospitals, but the source codes are derived from common billing code
systems (such as the AMA's CPT system). Chargemasters can include tens
of thousands of line items, depending on the type of facility, and can
be maintained in spreadsheet or database formats.\41\ For purposes of
section 2718(e) of the PHS Act, we proposed to define ``chargemaster''
to mean the list of all individual items and services maintained by a
hospital for which the hospital has established a standard charge (at
proposed new 45 CFR 180.20). Each individual item or service found on
the hospital chargemaster has a corresponding ``gross'' charge (84 FR
39578 through 39579). Each individual item or service may also have a
corresponding negotiated discount, because some hospitals negotiate
with third party payers to establish a flat percent discounted rate off
the gross charge for each individual item and service listed on the
chargemaster; for example, a hospital may negotiate a 50 percent
discount off all chargemaster gross rates with a third party payer.
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\41\ Tompkins C, et al. The Precarious Pricing System For
Hospital Services. Health Affairs. January/February 2006; 25(1).
Available at: https://www.healthaffairs.org/doi/10.1377/hlthaff.25.1.45.
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In contrast to the chargemaster, or so-called ``fee-for-service''
(FFS) price list, hospitals also routinely negotiate rates with third
party payers for bundles of services, or ``service packages,'' in lieu
of charging for each and every imaging study, laboratory test, or
alcohol swab found on the chargemaster.\42\ Such service packages may
have charges established on, for example, the basis of a common
procedure or patient characteristic, or may have an established per
diem rate that includes all individual items and services furnished
during an inpatient stay. Some hospitals present ``self-pay package
pricing'' for prompt same-day payment from healthcare consumers.
[[Page 65534]]
The hospital's billing and accounting systems maintain the negotiated
charges for service packages which are commonly identified in the
hospital's billing system by recognized industry standards and codes.
For example, a DRG system may be used to define a hospital product
based on the characteristics of patients receiving similar sets of
[itemized] services.\43\ Medicare and some commercial insurers have
adopted DRG classifications as a method of inpatient hospital payment.
Other codes (for example, payer-specific codes, CPT or Healthcare
Common Procedure Coding System (HCPCS) codes) are used by hospitals and
payers to identify service packages based on procedures.
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\42\ Nichols LM, and O'Malley AS. Hospital Payment Systems: Will
Payers Like The Future Better Than The Past? Health Affairs.
January/February 2006; 25(1). Available at: https://www.healthaffairs.org/doi/10.1377/hlthaff.25.1.81.
\43\ Mistichelli J. Diagnosis Related Groups (DRGs). Georgetown
University. June, 1984. Available at: https://repository.library.georgetown.edu/handle/10822/556896.
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For purposes of section 2718(e) of the PHS Act, we proposed to
define a ``service package'' to mean an aggregation of individual items
and services into a single service with a single charge (proposed new
45 CFR 180.20). In the CY 2020 OPPS/ASC proposed rule, we explained our
belief that this was appropriate and consistent with section 2718(e) of
the PHS Act because we believe the inclusion of DRGs as an item or
service in section 2718(e) recognizes that hospital services can be
provided, and charges billed, based on the service's individual
component parts or as a more inclusive service package. While section
2718(e) of the PHS Act specifically includes items and services grouped
into DRGs as an example of the items and services for which hospitals
must list their standard charges, we explained that our proposed
definition of ``items and services'' should include not just all DRGs
(as established under 1886(d)(4) of the SSA) but also all other service
packages provided by the hospital, including, for example, service
packages the hospital provides in an outpatient setting for which a
hospital may have established a standard charge. Therefore, our
proposed definition of ``items and services'' includes both individual
items and services and service packages.
We also included in our proposed definition of ``items and
services'' provided by the hospital the services furnished by
physicians and non-physician practitioners who are employed by the
hospital. We explained our belief that the services the hospital
provides through its employed physicians and non-physician
practitioners are items and services provided by the hospital because
such clinicians are employed by the hospital specifically so it can
offer such services to its patients. In addition, the hospital
establishes and negotiates the charges for the employed physician and
non-physician services and then bills and retains the payment for the
professional services of employed physicians and non-physician
practitioners. We therefore proposed to include these services in our
proposed definition of items and services provided by the hospital
under section 2718(e) of the PHS Act, and for hospitals to make public
the charges for the services of their employed physicians and non-
physician practitioners.
We also considered including in our proposed definition of items
and services the services provided by physicians and non-physician
practitioners who are not employed by the hospitals, but who provide
services at a hospital location. For example, a procedure performed in
a hospital setting may involve anesthesiology services provided by a
non-employed physician who has established his or her own charge for
the service provided at a hospital location. These physicians and non-
physician practitioners may send a bill that is separate from the
hospital bill, or they may elect to reassign their billing rights to
the hospital that will send a single bill that includes both hospital
charges and professional service charges. Often, healthcare consumers
are not expecting an additional charge or are otherwise surprised when
they receive bills from entities other than the hospital, or when
charges for non-employed physicians and non-physician practitioners are
higher than expected (for example, when a non-employed physician is
out-of-network and the consumer's third party payer declines payment
for those services for that reason). We explained our belief that the
provision of such additional charge information would be exceptionally
valuable to give consumers a more complete picture of the total amount
they might be charged in connection with an inpatient admission or an
outpatient department visit at a hospital location, potentially helping
to address the widely recognized ``surprise billing'' issue. However,
because physicians and non-physician practitioners who are not employed
by the hospital are practicing independently, establish their own
charges for services, and receive the payment for their services, we
indicated we did not believe their charges for their services would
fall within the scope of section 2718(e) of the PHS Act as they are not
services ``provided by the hospital.''
We welcomed comments on these proposals.
Comment: A few commenters agreed with the proposed definition of
``items and services'' including service packages. Many commenters,
however, questioned the feasibility of providing standard charges for
service packages, as they believe that it is neither feasible, nor
technically possible, for a hospital to report data from its
chargemaster as service packages. A few commenters also expressed
concern that pricing for service packages as proposed presents a
challenge because service packages are often unique to each payer, and
the reimbursements negotiated with payers are not necessarily
associated with a HCPCS code, DRG, National Drug Code (NDC), or
Ambulatory Payment Classification (APC) as the proposed regulation
anticipates.
A few commenters stated that they believe CMS needs to provide
guidance or a framework to help hospitals define outpatient service
packages and attribute ancillary services to specific primary services.
Another commenter asked if the definition of ``items and services'' was
flexible enough to allow for different payment models ranging from
episodic care that has a guarantee of follow-up care being included if
a complication happens, to care models that include subscription-based
contracts.
Response: We thank commenters for their input on the proposal. We
are finalizing the definition of ``items and services'' as proposed.
As we explained in the CY 2020 OPPS/ASC proposed rule, some
hospitals routinely negotiate rates with third party payers for bundles
of services or ``service packages.'' We agree with commenters that the
standard charge for a service package is not typically found on the
hospital's chargemaster, which simply lists out all the individual
items and services. Standard charges for service packages are
negotiated between the hospital and payer and are identified by common
billing codes (for example, DRGs or APCs) or other payer-specific
identifiers that provide context to the type and scope of
individualized items and services that may be included in the package.
As explained in more detail in section II.D.3 of this final rule, the
payer-specific charge the hospital has negotiated for a service package
(also referred to as the `base rate') can be found in other parts of
the hospital billing and accounting systems than the chargemaster, or
in rate tables or the rate sheets found in hospital in-network
[[Page 65535]]
contracts with third party payers indicating the agreed upon rates for
the provision of various hospital services.
We decline to define outpatient service packages and attributed
ancillary services because we believe this would be too prescriptive
and each hospital may provide different outpatient service packages and
ancillary services. We note, however, that we provide some additional
guidance for how hospitals should display of payer-specific negotiated
charges for hospital items and services (including service packages)
and their ancillary services, as applicable, in sections II.F of this
final rule.
We also note that the definition of items and services that we are
finalizing gives hospitals flexibility to display their standard
charges for service packages that are unique to each of their payer-
specific contracts. Thus, a service package that has been negotiated
with a third party payer to include treatment for complications or
follow up care is included in our definition of hospital items and
services.
Comment: One commenter sought clarification on whether CMS is
retaining the requirement in current CMS guidelines that PPS hospitals
post a list of their standard charges for each Medicare Severity (MS)-
DRG.
Response: We are finalizing policies that would supersede the
current guidance, and require hospitals to make public their payer-
specific charges for items and services, including service packages as
identified by DRG, APC, or other common billing code. CMS previously
issued guidelines specifying that only hospitals paid under the
Medicare IPPS (referred to as subsection (d) hospitals) would be
required to establish (and update) and make public a list of their
standard charges for each DRG established under section 1886(d)(4) of
the SSA.\44\ In retrospect, we recognize that this guidance
unnecessarily limited the reporting of DRGs by hospitals according to
section 2718(e) of the PHS Act, which specifies that a hospital make
public a list of the hospital's standard charges for items and services
provided by the hospital, including for DRGs established under section
1886(d)(4) of the SSA. As indicated in our proposed definition of
``items and services,'' we interpret the statute to apply to not just
individualized items and services, but also to service packages. We
believe such service packages are identified by common billing codes
(for example, DRG or APCs), not just MS-DRGs. We are therefore
implementing new policies in these regulations. Additionally, as
discussed in more detail in section II.D.3, we clarify that the
standard charge associated with the DRG would be the base rate the
hospital has negotiated with third party payers.
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\44\ Available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ProspMedicareFeeSvcPmtGen/Downloads/Additional-Frequently-Asked-Questions-Regarding-Requirements-for-Hospitals-To-Make-Public-a-List-of-Their-Standard-Charges-via-the-internet.pdf.
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Comment: A few commenters supported a definition of items and
services that would include services of employed physicians and non-
physician practitioners (generally reflected as professional charges).
A few commenters supported a more expansive definition of items and
services that would require hospitals to post charges for all
practitioners who affiliate with a hospital. Commenters who favored
this approach typically stated that CMS should place hospitals in a
position to be fully responsible for transparency around the entire
bill, citing concerns about surprise billing where patients received a
separate bill from medical practitioners not employed by the hospital.
Response: We appreciate commenters support for the proposed
definition of items and services which would include services of
employed physicians and non-physician practitioners (generally
reflected as professional charges). We also appreciate comments
encouraging the adoption of an even broader definition of items and
services that includes services for physicians and non-physician
practitioners who are affiliated with the hospital. As stated in the CY
2020 OPPS/ASC proposed rule, because physicians and non-physician
practitioners who are not employed by the hospital are practicing
independently, establish their own charges for services, and receive
the payment for their services, we do not believe the charges for their
services fall within the scope of section 2718(e) of the PHS Act as
they are not services ``provided by the hospital.'' We note that in
section II.F.2 of this final rule, we require hospitals to display
their standard charges for shoppable services in a consumer-friendly
manner, and we provided an example template for the format hospitals
could use for this purpose. In section II.F of this final rule, we
require hospitals to group the primary shoppable service with the
ancillary services customarily provided by the hospital. We also
strongly encourage and recommend that hospitals, for the sake of
consumer-friendly presentation, indicate any additional ancillary
services that are not provided by the hospital but that the patient is
likely to experience as part of the primary shoppable service. We
recommend and encourage hospitals to indicate that such services may be
billed separately by other entities involved in the patient's care. We
believe such disclosure may be helpful to enable consumers to identify
when services of physicians or non-physician practitioners not employed
by the hospital may be separately charged.
Comment: Several commenters sought clarification on the term
``employment,'' noting there are various relationships and employment
arrangements (including, for example, full time employment by a
hospital, or independent contractor arrangements). A few commenters
described these arrangements. For example, one commenter stated that
large academic medical centers may have faculty who are housed in a
business entity affiliated with the hospital, but not necessarily
employed by that hospital. The commenter also stated there may be
instances where independent practices assign billing rights to the
hospitals entity, but those practitioners are not considered employed
by the hospital. A few commenters explained that in many instances, the
employment of physicians and non-physician practitioners represent
complicated legal organizational structures. Another commenter
explained that it could be difficult to understand in what scenarios
physicians are employed based on looking at the billing entity for
professional services.
Response: We appreciate the commenters' suggestions identifying
examples of the variation and complexity in employment models and
possible contracting relationships that may exists between hospitals
and physicians, or entities employing physicians. Given such variation
and complexity, we believe it is important to preserve flexibility for
hospitals to identify employed physicians or non-physician
practitioners under their organizational structure, and we decline at
this time to codify a definition of ``employment.''
Comment: Several commenters disagreed that services provided by
physicians and non-physician practitioners employed by hospitals should
be included in the definition of items and services. These commenters
suggested that, under the proposed approach, hospitals that employ
physicians and non-physician practitioners would be providing
displaying prices that would not be comparable with prices of hospitals
that do not employ, and therefore need not disclose, physician and non-
physician practitioner prices, and expressed
[[Page 65536]]
concern that this would result in consumer confusion. A few commenters
believed hospitals that employ physicians and non-physician
practitioners would be at a disadvantage under the proposed definition
of ``items and services,'' as their standard charges would appear
higher than hospitals that do not. One comment suggested that an
unanticipated consequence of requiring price transparency only for
employed providers could be hospitals moving capital and services into
``partnerships'' in order to take advantage of the hidden pricing that
such a partnership would enable.
Response: We disagree with commenters who suggest that services for
employed physicians should be excluded from the definition of items and
services as we believe this information will be valuable to give
consumers a complete picture of the total amount they might be charged
by a hospital.
We disagree with comments suggesting that hospital price
transparency requirements would disadvantage those hospitals that
employ physicians and non-physician practitioners as compared to
hospitals that do not. As further discussed in section II.F. of this
final rule, with respect to the requirement to make public certain
standard charges for shoppable services in a consumer-friendly format,
hospital employed physicians' and non-physician practitioners' services
may be charged as ancillary services to a primary shoppable service.
Under such circumstances, hospitals would list such ancillary services
separately from the primary shoppable service. In Table 2, in section
II.F of this final rule, we include an example for how hospitals could
format and display their shoppable services. We also note that our
final policies require that the standard charges for each shoppable
service (including ancillary services) be listed separately, not summed
(see section II.F. of this final rule). We therefore believe consumers,
comparing shoppable services for multiple hospitals, will be able to
distinguish whether or not the hospital standard charges include
charges for services of physicians and non-physician practitioners.
We also do not have sufficient information to conclude that a
requirement for hospitals to disclose standard charges for services of
employed physicians and non-physician practitioners is likely to result
in a systematic change from the practice of employing physicians and
non-physician practitioners to favoring other types of partnerships and
employment arrangements. In developing our proposals for hospital price
transparency, we drew from similar requirements of States and we are
not aware that such price transparency requirements altered the mode by
which hospitals employ physicians and non-physician practitioners.
Comment: A few commenters suggested that CMS lacked the legal basis
to establish a definition of hospital items and services that includes
services of employed physicians and non-physician practitioners.
Response: Section 2718(e) of the PHS Act requires hospitals to make
public the hospital's standard charges for items and services provided
by the hospital, including for DRGs. The term ``standard charges for
items and services'' is not defined in section 2718. We believe the
Secretary has the authority to define ``items and services.'' Since
hospitals charge patients for the services of their employed physicians
and non-physician practitioners, we believe it is reasonable for the
Secretary to define items and services as including their services.
Comment: One commenter expressed concern with requiring hospitals
to make public standard charges for services of employed emergency room
physicians, urging a cautious approach so as to not undermine the
patient protections in place under the Emergency Medical Treatment and
Labor Act (EMTALA). The commenter explained that EMTALA stipulates that
a hospital may not place any signs in the emergency department
regarding the prepayment of fees or payment of co-pays and deductibles
that may have the chilling effect of dissuading patients from coming to
the emergency department. That, the commenter said, could lead patients
to leave prior to receiving a medical screening examination and
stabilizing treatment without regard to financial means or insurance
status. The commenter expressed concern that if the hospital attempts
to provide pricing information to patients prior to stabilizing them,
it would not only constitute an EMTALA violation, but it could also
potentially cause the patient's health to deteriorate since it could
delay the patient from receiving critical care. While the commenter
noted that the penalties for violating EMTALA are steep, their larger
concern was that if price transparency for emergency care is not
approached carefully, a hospital could inadvertently put patients in
the position of making life-or-death healthcare decisions based on
costs.
Several other commenters stressed how important it is that
consumers know the cost of emergency services in non-life threatening
circumstances. One commenter explained that he or she might have used
price data (if available) to determine which hospital emergency room to
go to for treatment of a non-life threatening condition. One commenter
noted that in the case of an emergency, people would not have time for
comparison of shoppable healthcare services.
Response: We appreciate the comment expressing concern about
potential interaction between EMTALA, or section 1867 of the SSA (42
U.S.C. 1395dd), and the requirements for hospitals to make public
standard charges under section 2718(e) of the PHS Act. However, we
believe that the policies we finalize here that require hospitals to
make public standard charges online are distinct from EMTALA's
requirements and prohibitions and that the two bodies of law are not
inconsistent and can harmoniously co-exist. To be clear, the price
transparency provisions that we are finalizing do not require that
hospitals post any signage or make any statement at the emergency
department regarding the cost of emergency care or any hospital
policies regarding prepayment of fees or payment of co-pays and
deductibles. But we do believe that the policies we are finalizing, for
hospitals to make public standard charges, offer consumers
opportunities for informed decision-making by providing them with
information about the cost of care which, for example, they might
consider prior to visiting a hospital emergency department for
treatment of a non-life threatening condition.
Comment: One commenter believed that there should be better patient
education to go along with the requirements for listing standard
charges related to items and services and service packages.
Response: We note that this rule does not preclude hospitals from
taking additional measures to educate their patient populations on the
data they make publicly available.
Final Action: We are finalizing, as proposed, the meaning of
``items and services'' at new 45 CFR 180.20. In the CY 2020 OPPS/ASC
proposed rule, we had included several examples of items and services
within the definition; for clarity, we are finalizing a technical
change to enumerate these examples at 45 CFR part 180.20.
Accordingly, items and services means all items and services,
including individual items and services and service packages, that
could be provided by a hospital to a patient in connection
[[Page 65537]]
with an inpatient admission or an outpatient department visit for which
the hospital has established a standard charge. Examples include, but
are not limited to the following:
(1) Supplies and procedures.
(2) Room and board.
(3) Use of the facility and other items (generally described as
facility fees).
(4) Services of employed physicians and non-physician practitioners
(generally reflected as professional charges).
(5) Any other items or services for which a hospital has
established a standard charge.
D. Definitions for Types of ``Standard Charges''
1. Overview and Background
Under our current guidelines related to section 2718(e) of the PHS
Act (as discussed in the FY 2019 IPPS/LTCH PPS proposed rule and final
rule (83 FR 20164 and 41144, respectively)), a hospital may choose the
format it uses to make public a list of its standard charges, so long
as the information represents the hospital's current standard charges
as reflected in its chargemaster.
As we explained in the CY 2020 OPPS/ASC proposed rule, we received
feedback from several commenters in response to the 2018 requests for
information (RFIs), including hospitals and patient advocacy
organizations, who indicated that gross charges as reflected in
hospital chargemasters may only apply to a small subset of consumers;
for example, those who are self-pay or who are being asked to pay the
chargemaster rate because the hospital is not included in the patient's
insurance network. We explained that stakeholders also noted that the
charges listed in a hospital's chargemaster are typically not the
amounts that hospitals actually charge to consumers who have health
insurance because, for the insured population, hospitals charge amounts
reflect discounts to the chargemaster rates that the hospital has
negotiated with third party payers. Further, with respect to patients
who qualify for financial assistance or who pay in cash, commenters on
the RFIs pointed out that some hospitals will charge lower amounts than
the rates that appear on the chargemaster. Adding to the complexity, a
few commenters noted that hospitals often package items and services
and charge a single discounted negotiated amount for the packaged
service. For example, as discussed in II.C. of this final rule, instead
of itemizing and charging for each individual hospital item or service
found on the chargemaster, a hospital may identify a primary common
condition or procedure and charge a single negotiated or ``cash''
amount for the primary common condition or procedure that includes all
associated items and services that are necessary for treatment of the
common condition or to perform the procedures. We stated that we
believed these comments illustrated a fundamental challenge of making
healthcare prices transparent in general, and specifically with respect
to the issue of how we should best implement section 2718(e) of the PHS
Act; simply put, hospitals do not offer all consumers a single
``standard charge'' for the items and services they furnish. Rather,
the ``standard charge'' for an item or service (including service
packages) varies depending on the circumstances particular to the
consumer (84FR 39577 through 39578).
As discussed in the CY 2020 OPPS/ASC proposed rule, in developing
our proposals in this rulemaking we took into account the comments we
received from the 2018 RFIs responding to our question about how
``standard charges'' should be defined. We indicated in the CY 2020
OPPS/ASC proposed rule that we believed the variety of suggested
definitions reflected and supported our assessment that hospitals can
have different standard charges for various groups of individuals. We
stated that, in general, for purposes of 2718(e) of the PHS Act, we
believed a standard charge could be identified as a charge that is the
regular rate established by the hospital for the items and services
provided to a specific group of paying patients. Therefore, we
considered what types of standard charges may reflect certain common
and identifiable groups of paying patients and we proposed to define
standard charges to mean ``gross charges'' and ``payer-specific
negotiated charges,'' and to codify this definition in proposed new 45
CFR 180.20. As explained in the CY 2020 OPPS/ASC proposed rule, our
proposal to define standard charges as gross charges and payer-specific
negotiated charges reflects the fact that a hospital's standard charge
for an item or service is not typically a single fixed amount, but,
rather, depends on factors such as who is being charged for the item or
service, and particular circumstances that apply to an identifiable
group of people, including, for example, healthcare consumers that are
insured members of third party insurance products and plans that have
negotiated a rate on its members' behalf.
Further, in the CY 2020 OPPS/ASC proposed rule, we acknowledged
that the proposed definition of hospital ``standard charges'' would be
limited to only two of the many possibilities that exist for defining
types of hospital ``standard charges,'' and we discussed other
potential definitions that we considered, and sought public input and
comment on the alternatives and additional types of standard charges
that may be useful to consumers.
Comment: Many commenters, in particular, individuals and those
representing independent medical practices, expressed frustration
related to the opacity of healthcare prices, stating that hospital
charges are often unreasonable. Commenters described hospital billing
practices as a ``shell game'' and asserted that the use of overly
inflated chargemaster rates to negotiate with payers is an unfair
practice that leads patients to get ``gouged.'' One commenter noted
that the ``lack of price transparency circumvents market forces that
seek to keep prices within reasonable limits [which has] resulted in
the creation of a dysfunctional market with rapidly increasing and
excessive charges for which the consumer is ultimately responsible.''
Others similarly asserted that the lack of availability of healthcare
costs leads to ``predatory pricing'' on the part of hospitals and
insurance companies, and noted that millions of Americans have gone
bankrupt because they get ``stuck with bills that are beyond
reasonable.''
Many commenters asserted that hospital disclosure of standard
charges would be critical to bring accountability and increased value
to the healthcare industry; however, many other commenters stated that
they believed the movement toward value-based care could or would be
harmed by hospital disclosure of standard charges, specifically, as a
result of disclosure of payer-specific negotiated charges.
Many commenters were highly supportive of our proposals and, in
particular, of the proposals to require hospitals to make public both
gross and payer-specific negotiated charges. Many commenters asserted
that such disclosure is informative and necessary for consumers and
will improve the value of healthcare for consumers. For example,
commenters indicated that knowing the rate the insurer had negotiated
on their behalf would be essential for patients with co-insurance and
HDHPs to help determine their out-of-pocket cost estimates in advance.
Other commenters indicated that the gross charge or cash rate was
important for self-pay patients (with or without insurance) to compare
facility prices.
Many other commenters, however, disagreed with our proposals,
[[Page 65538]]
questioning the legal authority for requiring disclosure of more than
one type of hospital standard charge as proposed, with objections
focused mainly on the proposed definition and requirement to disclose
payer-specific negotiated charges.
Many commenters supported the addition of, or offered alternative
suggestions for, necessary types of standard charges such as the
discounted cash price and variations of the de-identified minimum,
median, or maximum negotiated charge.
Response: Hospital bills can be mystifying, even to those who have
been in healthcare-related professions for years; some hospital charges
are market-based, while others are not. There are three broad types of
hospital rates, depending on the patient and payer: (1) Medicaid and
Medicare FFS rates; (2) Negotiated rates with private insurers or
health plans; and (3) Uninsured or self-pay.
Medicaid FFS rates are dictated by each State and tend to be at the
lower end of market rates. Medicare FFS rates are determined by CMS and
those rates tend to be higher than Medicaid rates within a state.
Privately negotiated rates vary with the competitive structure of the
geographic market and usually tend to be somewhat higher than Medicare
rates, but in some areas of the country the two sets of rates tend to
converge.
Chargemaster (gross) rates charged to self-pay individuals bear
little relationship to market rates, are usually highly inflated,\45\
and tend to be an artifact of the way in which Medicare used to
reimburse hospitals. Under the old system, the more services a hospital
provided and longer a patient's stay, the greater the reimbursement.
Congress, recognizing that the reimbursement system created
disincentives to provide efficient care, enacted in 1983 a prospective
payment system. The primary objective of the prospective payment system
is to create incentives for hospitals to operate efficiently and
minimize unnecessary costs while at the same time ensuring that
payments are sufficient to adequately compensate hospitals for their
legitimate costs in delivering necessary care to Medicare
beneficiaries.
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\45\ Richman BD, et al. Battling the Chargemaster: A Simple
Remedy to Balance Billing for Unavoidable Out-of-Network Care. Am J
Manag Care. 2017;23(4):e100-e105. Available at: https://www.ajmc.com/journals/issue/2017/2017-vol23-n4/battling-the-chargemaster-a-simple-remedy-to-balance-billing-for-unavoidable-out-of-network-care.
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To partly compensate hospitals for certain overly costly
hospitalizations, hospitals may receive an ``outlier'' payment which is
based on the hospital's billed charges, adjusted to cost, in comparison
to the payment that would otherwise be received and an outlier
threshold. See 42 CFR 412.84. To determine whether an individual case
would qualify for an outlier payment, the hospital's cost-to-charge
ratio is applied to the covered charges to estimate the costs of the
case. In the late 1990s, many hospitals began manipulating or gaming
that ratio to make it easier to qualify for outlier payments. The
larger the charges, the smaller the ratio, but it takes time for the
ratio to be updated. Thus, by way of example, if a hospital had a cost-
to-charge ratio 1 to 5, or 20 percent, then a pill which cost the
hospital $1 to purchase might be billed to a patient at $5. However if
the hospital doubled the charge to the patient to $10, the
corresponding change in its ratio would take time to be updated. Its
costs might look like $2 instead of $1 in the interim. Rule changes
have reduced such manipulation. Nevertheless, some hospitals' charges
do not reflect market rates, and these can come into play when a
hospital bills a self-pay patient. Hospital bills that are generated
off these chargemaster rates can be inherently unreasonable when judged
against prevailing market rates.
As premiums under the ACA have become less affordable,\46\ many
individuals, both with and without insurance, have large unpaid
hospital bills. Some hospitals, including some that are categorized as
charitable, have responded by instituting collection actions against
those patients. As the number of these suits have proliferated, many
states courts have had to grapple with hospital charging systems in
order to judge whether a given set of charges was reasonable. There are
several potential metrics for assessing reasonableness of a hospital's
charge in a given case as an alternative to the chargemaster (gross)
rates described above. These include the rate Medicare would have paid
for those same services, the amount hospitals are supposed to charge
needy patients who lack insurance ``not more than the amounts generally
billed to individuals who have insurance covering such care'' (see IRC
501(r)(5)(A) or the amounts billed consistent with the financial
assistance policy each non-profit hospital is requires to have (see IRC
501(r)(4)).
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\46\ NCSL website, Health Insurance: Premiums and Increases, at
https://www.ncsl.org/research/health/health-insurance-premiums.aspx.
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We continue to believe that the public posting of hospital standard
charge information will be useful to the public, including consumers
who need to obtain items and services from a hospital, consumers who
wish to view hospital prices prior to selecting a hospital, clinicians
who use the data at the point of care when making referrals, and other
members of the public who may develop consumer-friendly price
transparency tools or perform analyses and make policy to drive value-
based care. In the CY 2020 OPPS/ASC proposed rule, we stated that we
believed these proposed requirements would represent an important step
towards putting healthcare consumers at the center of their healthcare
and ensuring they have access to the hospital standard charge
information they need. Additionally, as stated in the CY 2020 OPPS/ASC
proposed rule, we believe that requiring transparency of hospital
charges will drive competition, which, in turn, may have the effect of
not only lowering hospital charges for the most vulnerable consumers
and those with the least market power to negotiate prices, but also for
consumers who have access to charges negotiated on their behalf by a
third party payer.
We also continue to believe that price transparency will lead to
lower costs for consumers and better quality of care. As stated in the
CY 2020 OPPS/ASC proposed rule, many empirical studies have
investigated the impact of price transparency on markets, with most
research showing that price transparency leads to lower and more
uniform prices, consistent with predictions of standard economic
theory. Further, evidence shows that healthcare quality is not often
correlated with price.\47\ Traditional economic analysis suggests that
if consumers have better pricing information for healthcare services,
providers would face pressure to either lower prices or to provide
better quality of care for the prices they charge.\48\ Much of the
research evidence we considered in the development of these
requirements and in the CY 2020 OPPS/ASC proposed rule are reprised in
sections II.A, II.D.3, and in our Regulatory Impact Analysis (RIA)
(section V). Because the drive towards value depends on access to both
quality and cost information, we believe that disclosure of hospital
standard charges fully aligns with and supports our drive
[[Page 65539]]
toward value care as one half of the value proposition. In other words,
whereas hospital quality information is readily available to the
public,49 50 hospital standard charge information is not.
Disclosure of hospital standard charge information will therefore
complement quality information so that consumers can make high value
decisions about their care.
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\47\ Hussey P, et al. The Association Between Health Care
Quality and Cost A Systematic Review. Ann Intern Med. January 2013;
158(1): 27-34. Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4863949/.
\48\ Ginsburg P. Shopping For Price In Medical Care. Health
Affairs. 2007. Available at: https://www.healthaffairs.org/doi/10.1377/hlthaff.26.2.w208.
\49\ https://www.medicare.gov/hospitalcompare/search.html.
\50\ AHRQ website, Comparative Reports on Hospitals, at https://www.ahrq.gov/talkingquality/resources/comparative-reports/hospitals.html.
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Section 2718 of the PHS Act provides authority to require
disclosure of hospital standard charges. Specifically, section 2718(e)
of the PHS Act requires each hospital operating within the United
States for each year to establish (and update) and make public a list
of the hospital's standard charges for items and services provided by
the hospital, including for diagnosis-related groups established under
section 1886(d)(4) of the SSA. In addition to section 2718(e) and
section 2718(b)(3) (regarding enforcement), section 1102 of the SSA
supports the requirements in this rule. Section 1102(a) of the SSA
requires the Secretary to ``make and publish such rules and
regulations, not inconsistent with this Act, as may be necessary to the
efficient administration of the functions with which [he or she] is
charged'' under the SSA. By its terms, this provision authorizes
regulations that the Secretary determines are necessary to administer
these programs. In our view, as discussed further below, there is a
direct connection between transparency in hospital standard charge
information and having more affordable healthcare and lower healthcare
coverage costs. In addition, these requirements also promote the
efficient administration of the Medicare and Medicaid programs.
Since the PHS Act does not define ``standard charges'' for purposes
of implementation of section 2718(e) of the PHS Act, we proposed to
define standard charges by the regular rate established by the hospital
for an item or service provided to a specific group of paying patients.
The term ``rate'' is defined in the Oxford dictionary as ``a fixed
price paid or charged for something, especially goods or services.'' We
therefore use the terms ``rate'' and ``charge'' interchangeably
throughout this final rule. We believe that reading the statute to
permit disclosure of several types of charges (or ``rates'') that are
standard for different identifiable groups of people is reasonable for
several reasons. First, while there is a definition of ``charge'' in
the SSA that is used for purposes of Medicare (as commenters noted and
as discussed in more detail in II.D.2), there is not a definition of
`standard charges' in either the PHS Act or the SSA. We believe that
had Congress intended us to use the SSA definition of ``charges,''
Congress would have referenced that definition of ``charges'' and
included this provision in the SSA, as opposed to the PHS Act.
Alternatively, Congress could have indicated that hospitals make public
their ``charges'' and not qualified the term by inserting ``standard''
in front of it. Moreover, we believe the statute contemplates
disclosure of changes other than the hospital chargemaster rates
because the statute requires hospitals to disclose their ``standard
charges'' for items and services, including for diagnosis related
groups (italicized for emphasis). This suggests that the statute
contemplates disclosure of charges other than the list prices as found
in the hospital chargemaster because the hospital chargemaster contains
only list prices for individual items and services. Hospital
chargemasters do not include list prices for service packages
represented by common billing codes such as DRGs. Instead, ``standard
charges'' for service packages are determined as a result of
negotiations with third party payers.\51\ For these reasons and others
articulated in the CY 2020 OPPS/ASC proposed rule, we believe the term
``standard charges'' for purposes of implementing section 2718(e) of
the PHS Act may be defined to mean the standard charges as they relate
to different identifiable groups of people and to include charges other
than those found in the hospital chargemaster.
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\51\ Office of Attorney General, Commonwealth of Massachusetts.
Examination of Health Care Cost Trends and Cost Drivers Pursuant to
G.L. c. 12C, Sec. 17. (October 11, 2018). Available at: https://www.mass.gov/files/documents/2018/10/11/AGO%20Cost%20Trends%20Report%202018.pdf.
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As there are many different identifiable groups of paying patients
(some that are self-pay and others that are members of third party
payer insurance plans), in the CY 2020 OPPS/ASC proposed rule, we
defined two types of standard charges, specifically, the gross
(chargemaster) charges and the payer-specific negotiated charges. As
explained in section II.A. of this final rule, we continue to believe
that gross charges found in the chargemaster as well as negotiated
charges are both informative and necessary for consumers to understand
their potential out-of-pocket cost obligations, but such information is
not readily available to consumers. These two specific types of
standard charges have the potential to inform two large identifiable
groups of healthcare consumers who do not currently have ready access
to hospital charge information, specifically those who have limited
power to negotiate charges (for example, self-pay individuals) and
those who rely on third party payers to negotiate charges on their
behalf. We also continue to believe that hospital face only a limited
burden to make publicly available these types of standard charges
because good business practices necessitate that these charges be
available, maintained, and in use in hospital billing and accounting
systems.
Section 2719 of the PHS Act requires non-grandfathered plans and
issuers to provide a notice of adverse benefit determination \52\
(commonly referred to as an explanation of benefits (EOB)) to
participants, beneficiaries, and enrollees after healthcare items or
services are furnished and claims for benefits are adjudicated. We note
that presentation of both gross charges and payer-specific negotiated
charges is consistent with the standard charges found in a patient's
EOB that health insurance plans are required to provide to patients
following a healthcare service. EOBs include such data points as: The
type of service provided; the amount the hospital billed for the
service (which we define as the gross charge for purposes of
implementing section 2718(e) of the PHS Act); any discount the patient
received for using an in-network provider (which we define as the
payer-specific negotiated charge for purposes of implementing section
2718(e) of the PHS Act) or the allowed amount for out-of-network
providers; the portion or amount the plan paid the hospital; and the
remaining amount owed out-of-pocket and any portion of that amount
applied toward the deductible. It is evident that while the first two
sets of charge data are necessary for a consumer to understand their
out-of-pocket obligations, that data are insufficient as the consumer
must obtain additional information from his or her third party payer
related to the circumstances of their particular insurance plan (for
example, what portion of the payer-specific negotiated charges would be
paid by the plan and
[[Page 65540]]
other plan dependencies such as the patient's co-insurance obligations
or where the patient is in their deductible for the year). Both gross
charges and payer-specific negotiated charges are therefore necessary
starting points for patients with third party payer insurance to
understand their out-of-pocket cost obligations, and hospitals have
ready access to both. By making these two important types of standard
charges public, consumers could have the information necessary to
create what could be considered an EOB in advance of a service, rather
than having to wait for months after services were rendered to
understand the extent of their healthcare costs. We address the gross
charges as a type of standard charge in section II.D.2 of this final
rule. We address the payer-specific negotiated charge in section II.D.3
of this final rule.
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\52\ An adverse benefit determination means an adverse benefit
determination as defined in 29 CFR 2560.503-1, as well as any
rescission of coverage, as described in 29 CFR 2590.715-2712(a)(2)
(whether or not, in connection with the rescission, there is an
adverse effect on any particular benefit at that time). See 26 CFR
54.9815-2719, 29 CFR 2590.715-2719 and 45 CFR 147.136. Plans subject
to the requirements of ERISA (including grandfathered health plans)
are also subject to a requirement to provide an adverse benefit
determination under 29 CFR 2560.503-1.
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Finally, we appreciate commenter support and suggestions for
alternative types of standard charges and are finalizing three
additional types of standard charges in response to comments.
Specifically, we are finalizing the discounted cash price (as discussed
in section II.D.4.c of this final rule), as well as the de-identified
minimum negotiated charge and the de-identified maximum negotiated
charge which are discussed in section II.D.4.d of this final rule.
Final Action: After considering the public comments, we are
finalizing as proposed our definition of standard charges at 45 CFR
180.20 to mean the regular rate established by the hospital for an item
or service provided to a specific group of paying patients. We are also
finalizing two types of standard charges, gross charges and payer-
specific negotiated charges (as discussed in more detail in sections
II.D.2 and II.D.3 of this final rule). Further, as a result of broad
stakeholder support for the discounted cash price as an alternative
type of standard charge because of its greater applicability to self-
pay individuals, we are adding the discounted cash price as a third
type of standard charge (as discussed in more detail in section
II.D.4.c of this final rule). In response to the many commenters who
supported variations of the de-identified minimum, median and maximum
negotiated charges, we are finalizing modifications to define the de-
identified minimum negotiated charge, and de-identified maximum
negotiated charge as a fourth and fifth type of standard charge (as
discussed in more detail in section II.D.4.d of this final rule). Each
of these types of standard charges (the gross charge, the payer-
specific negotiated charge, the discounted cash price, the de-
identified minimum negotiated charge, and the de-identified maximum
negotiated charge) and the comments received are discussed in more
detail in sections II.D.2, II.D.3, and II.D.4.c and II.D.4.d of this
final rule, respectively.
2. Definition of ``Gross Charges'' as a Type of Standard Charge
We proposed that, for purposes of the first type of ``standard
charge,'' a ``gross charge'' would be defined as the charge for an
individual item or service that is reflected on a hospital's
chargemaster, absent any discounts (at new 45 CFR 180.20). As we
explained in the CY 2020 OPPS/ASC proposed rule (84 FR 39576 through
39577), the hospital chargemaster contains a list of all individual
items and services the hospital provides. The gross charges reflected
in the chargemaster often apply to a specific group of individuals who
are self-pay, but do not reflect charges negotiated by third party
payers. We also noted that the chargemaster does not include charges
that the hospital may have negotiated for service packages, such as per
diem rates, DRGs or other common payer service packages, and therefore
this type of standard charge would not include standard charges for
service packages.
We proposed to require hospitals to make public their gross charges
because, in addition to applying to a specific group of individuals,
based on research and stakeholder input, we believe gross charges are
useful to the general public, necessary to promote price transparency,
and necessary to drive down premium and out-of-pocket costs for
consumers of healthcare services. For example, studies suggest that the
gross charge plays an important role in the negotiation of prices with
third party insurance products that are subsequently sold to
consumers.\53\ Specifically, as hospital executives and others familiar
with hospital billing cycles often note, hospitals routinely use gross
charges as a starting point for negotiating discounted rates with third
party payers, and higher gross charges have been found to be associated
with both higher negotiated rates and, in turn, higher premiums and
out-of-pocket costs for insured individuals.54 55 As such,
gross charges are relevant to all consumers, including those with
insurance coverage. We stated in the CY 2020 OPPS/ASC proposed rule
that we believe that requiring transparency of hospital gross charges
may drive competition, which, in turn, might have the effect of not
only lowering hospital charges for the most vulnerable consumers and
those with the least market power to negotiate prices, but also for
consumers who have access to charges negotiated on their behalf by a
third party payer.
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\53\ Bai G and Anderson GF. Market Power: Price Variation Among
Commercial Insurers for Hospital Services. Health Affairs. Oct 2018;
37(10): 1615-1622. Available at: https://www.healthaffairs.org/doi/10.1377/hlthaff.2018.0567.
\54\ Bai G and Anderson GF. Extreme Markup: The Fifty US
Hospitals With The Highest Charge-To-Cost Ratios. Health Affairs.
Jun 2015; 34(6): 922-928. Available at: https://www.healthaffairs.org/doi/10.1377/hlthaff.2014.1414.
\55\ Batty M and Ippolito B. Mystery of The Chargemaster:
Examining The Role Of Hospital List Prices in What Patients Actually
Pay. Health Affairs. April 2017; 36(4): 689-696. Available at:
https://www.healthaffairs.org/doi/10.1377/hlthaff.2016.0986.
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Additionally, we indicated in the CY 2020 OPPS/ASC proposed rule
that third party developers of consumer price transparency tools can
use gross charges in conjunction with additional information (such as
an individual's specific insurance and benefit information and quality
data) to develop and make available consumer-friendly out-of-pocket
cost estimates that allow consumers to compare healthcare service
prices across hospitals and other nonhospital settings of care.
Moreover, we noted in the CY 2020 OPPS/ASC proposed rule (84 FR 39572
through 39573) that research suggests that making such consumer-
friendly information available to the public has been demonstrated to
reduce consumer healthcare costs. As such, we concluded that public
access to hospital gross charges is critical to inform all patients
(both self-pay and insured) of their choices and drive transparency in
prices and proposed to codify the proposed definition of ``gross
charges'' at new 45 CFR 180.20. We invited public comment on our
proposal to define a type of ``standard charge'' as a ``gross charge''
and on our proposed definition of ``gross charge.''
Comment: Several commenters specifically agreed with our proposal
to include gross charges as a type of standard charges. A few
commenters also stated that they believed gross charges should be the
only definition of ``standard charge.'' Several commenters, however,
disagreed with the proposed inclusion of gross charges as a type of
standard charge due to their belief that the definition conflicts with
the definition of ``charges'' used in CMS's Provider Reimbursement
Manual Part 1 (PRM1). Several commenters emphasized the importance of
CMS remaining consistent with its definitions of ``charges'' due to
their belief that deviating from these definitions would undermine the
accuracy of hospital cost
[[Page 65541]]
reports which is fundamental to the Medicare rate-setting process.
Response: We thank commenters for their support of a definition of
the first type of standard charge to be the ``gross charge'' and
disagree with commenters who state that the gross charge should be the
only standard charge. As further explained in section II.D.1 of this
final rule, we believe the statute contemplates standard charges other
than those found in the hospital chargemaster. Additionally, we sought
comment last year on a definition of ``standard charges'' and, as a
result of comments, we were persuaded a singular ``standard'' that
applies to all identifiable groups of patients is not possible because
groups of patients with third party payer insurance have different
standard charges that apply to them than do patients without third
party payer coverage. We therefore decline to adopt the several
commenters' suggestions that we finalize the gross charge as the only
type of hospital standard charge.
Further, we do not believe our proposed definition of ``gross
charges'' for purposes of implementing section 2718(e) of the PHS Act
conflicts with definitions of ``charges'' found in the PRM1, which
states ``Charges refer to the regular rates established by the provider
for services rendered to both beneficiaries and to other paying
patients. Charges should be related consistently to the cost of the
services and uniformly applied to all patients whether inpatient or
outpatient. All patients' charges used in the development of
apportionment ratios should be recorded at the gross value; i.e.,
charges before the application of allowances and discounts
deductions.'' \56\ In fact, we believe our definition of ``gross
charge'' as the charge for an individual item or service that is
reflected on a hospital's chargemaster, absent any discounts, is the
same as the charges referenced in the PRM1 and that hospitals use to
create cost reports for Medicare purposes. We further do not believe
that the term ``charges'' as used in the PRM is in conflict because the
term is defined for a specific purpose and use, that is, for purposes
of Medicare cost reporting. For this reason, we disagree with
commenters that our definition of ``gross charges'' as a type of
standard charge in any way undermines the accuracy of hospital Medicare
cost reports.
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\56\ Part I, Chapter 22, Section 2202.4 of the Medicare Provider
Reimbursement Manual https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021929.html.
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Additionally, gross charges may also sometimes be referred to as
``billed charges'' or ``billed amounts'' and appear on a patient's EOB
as the first charge listed, and are the first step in explaining the
patient's out-of-pocket obligations. When the consumer has no insurance
and is self-pay, there is no EOB and the hospital often applies the
gross charges to the consumer if no other pre-arrangement has been
worked out (for example, if the consumer has not taken advantage of a
discounted cash price offered by the hospitals).
Comment: Regarding the need for and usefulness of gross charges as
a type of standard charge, several commenters asserted that gross
charge data would be meaningful to the public and necessary for full
price transparency. A few commenters emphasized the positive difference
this information would make if people had the ability to see
information, for example one commenter stated that they would like to
see the different levels of room charges on a list, stating that it
would make a big difference for most people. A few commenters added
that by seeing costs up front they could make an informed decision
before receiving care, in order to both anticipate their bill and
potentially shop around. A few commenters also expressed that by seeing
all charges up front, consumers could determine whether ``self-pay''
would be a better deal for them than paying the insurance copay and
deductible. By contrast, several commenters disagreed that gross
charges would be applicable or useful to the public, because they
believe that they do not represent what most consumers would actually
pay (particularly those with third party payer coverage) and would not
be meaningful to the public. One commenter stated that even in the
hands of app developers, this data may have little relevance to insured
individuals because the data wouldn't be presented in the context of
the individual's health plan. One commenter disagreed with hospitals
posting gross charges because they believe that in rural areas, the
appearance of high prices may deter a consumer from seeking care.
Response: We thank the commenters for their input. We agree with
stakeholders who suggested that while the gross charge may be
applicable to some self-paying patients, it is not the standard charge
that applies to groups of insured patients. Even some self-paying
patients may find that some hospitals offer a cash discounted price off
their chargemaster rates (as discussed in more detail in section
II.D.4.c of this final rule). Because of this, we are finalizing
definitions for several types of standard charges that would be
applicable to both self-pay patients as well as consumers with third
party payer coverage. As we outlined in more detail in the CY 2020
OPPS/ASC proposed rule (84 FR 39578 through 39579), research suggests
that gross charges appear to play an important role in prices paid by
consumers with third-party insurance products because higher gross
charges are associated with higher negotiated rates, premiums, and
consumer out-of-pocket costs. For consumers who are self-pay or who
lack insurance, such information can be useful in advance of selecting
a provider of healthcare services to help patients determine potential
out-of-pocket cost obligations. This information may also have high
value for researchers and other academics who can assess regional and
national cost trends to determine the effectiveness of price
transparency efforts, and for lawmakers to determine policy
improvements that are necessary to drive toward value in healthcare. As
noted in II.D.1 in this final rule, the presentation of gross charges
is the starting point for insured patient's EOBs, which contain
multiple charge and other data points necessary for patients to
understand their out-of-pocket cost obligations. We therefore believe
that disclosure of gross charges are useful to the general public and
necessary to promote price transparency and reduce premiums and out-of-
pocket costs for consumers of healthcare.
We recognize the unique challenges that rural hospitals face, but
disagree that rural hospitals making standard charges public would
deter patients from seeking necessary care, especially where there is
already minimal competition with a CAH or sole community hospital. We
believe instead that this information would allow consumers to include
price considerations in their treatment plan for elective procedures,
which may result in selecting the most appropriate setting for their
care and increased patient satisfaction.
Final Action: At new 45 CFR 180.20, we are finalizing as proposed a
definition of gross charge, as a type of standard charge, to mean the
charge for an individual item or service that is reflected on a
hospital's chargemaster, absent any discounts.
3. Definition of ``Payer-Specific Negotiated Charge'' as a Type of
Standard Charge
As noted in section II.D.1. of this final rule, in general, for
purposes of 2718(e), we believe a standard charge can be identified as
a regular rate established
[[Page 65542]]
by the hospital for the items and services provided to a specific group
of paying patients. We proposed that, for purposes of the second type
of ``standard charge,'' the ``payer-specific negotiated charge'' would
be defined as the charge that the hospital has negotiated with a third
party payer for an item or service. We further proposed to define
``third party payer'' for purposes of section 2718(e) of the PHS Act as
an entity that, by statute, contract, or agreement, is legally
responsible for payment of a claim for a healthcare item or service,
and to codify this definition at new 45 CFR 180.20. As the reference to
``third party'' suggests, this definition excludes an individual who
pays for a healthcare item or service that he or she receives (such as
self-pay patients).
We proposed to focus on a second type of ``standard charge''
related to negotiated rates because most consumers (over 90 percent
\57\) rely on a third party payer to cover a portion or all of the cost
of healthcare items and services, including a portion or all of the
cost of items and services provided by hospitals (in accordance with
the terms and conditions of the third party payer's contract agreement
with that consumer). Some third party payers (for example, FFS Medicare
and Medicaid) currently make public the maximum rate they pay for a
hospital item or service. However, many third party payers do not
reveal their negotiated rates, even to individuals on behalf of whom
they pay. Additionally, many contracts between third party payers and
hospitals contain so-called ``gag clauses'' that prohibit hospitals
from disclosing the rates they have negotiated with third party
payers.\58\ Because consumers are not generally part of the
negotiations or privy to the resulting negotiated rates, consumers
often find it difficult to learn in advance of receiving a healthcare
service the rate their third party payers may pay and subsequently what
the individual's portion of the cost will be. Having insight into the
charges negotiated on one's behalf is necessary for insured healthcare
consumers to determine and compare their potential out-of-pocket
obligations prior to receipt of a healthcare service. For example, if a
healthcare consumer knows that he or she will be responsible for a co-
pay of 20 percent of the charges for a hospital service, he or she can
compare the charges that the third party negotiated with hospital A and
hospital B and, from that, the consumer can determine his or her
expected out-of-pocket costs at hospital A versus hospital B.
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\57\ Berchick E, et al. Health Insurance Coverage in the United
States: 2017. United States Census Bureau, September 2018. Available
at: https://www.census.gov/content/dam/Census/library/publications/2018/demo/p60-264.pdf.
\58\ King JS, Muir MA, Alessi SA. Clarifying Costs Can Increased
Price Transparency Reduce Healthcare Spending? 4 William & Mary
Policy Review 319 (2013). Available at: https://pdfs.semanticscholar.org/f604/1a0484c65c593525d0c07e040cf655697f2d.pdf.
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In the CY 2020 OPPS/ASC proposed rule, we explained that knowing a
negotiated charge is also important because a growing number of insured
healthcare consumers are finding that some services are more affordable
if the consumer chooses to forego utilizing their insurance product and
simply pays out-of-pocket. For example, stakeholders and reports
indicate that an increasing number of consumers are discovering that
sometimes providers' cash discounts can mean paying lower out-of-pocket
costs than paying the out-of-pocket costs calculated after taking into
account a third party payer's higher negotiated
rate.59 60 61 62 However, consumers cannot make such
determinations without knowing the rate their third party payer has
negotiated.
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\59\ Beck M. How to Cut Your Health-Care Bill: Pay Cash. The
Wall Street Journal. February 15, 2016. Available at: https://www.wsj.com/articles/how-to-cut-your-health-care-bill-pay-cash-1455592277.
\60\ Rosato D. How Paying Your Doctor in Cash Could Save You
Money. Consumer Reports. May 4, 2018. Available at: https://www.consumerreports.org/healthcare-costs/how-paying-your-doctor-in-cash-could-save-you-money/.
\61\ Terhune C. Many hospitals, doctors offer cash discount for
medical bills. Los Angeles Times. March 27, 2012. Available at:
https://www.latimes.com/business/healthcare/la-fi-medical-prices-20120527-story.html.
\62\ Weissmann D. `An Arm And A Leg': Can You Shop Around For A
Lower-Priced MRI? Kaiser Health News. June 19, 2019. Available at:
https://khn.org/news/an-arm-and-a-leg-can-you-shop-around-for-a-lower-priced-mri/.
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For the reasons discussed above, we indicated that we agreed with
2018 RFI commenters that gross charges (as a type of standard charge)
could be applicable to one identifiable group of consumers (for
example, self-pay) but are not enough for another large and
identifiable group of consumers (for example, those with third party
insurance) to know their charges for hospital items. Thus, we proposed
that a type of ``standard charge'' is the ``payer-specific negotiated
charge'' that would be defined as the charge (or rate) that a hospital
has negotiated with a third party payer for an item or service. We
stated that we decided to focus on negotiated rates rather than all
payer rates because charges that are not negotiated (for example, FFS
Medicare or Medicaid rates) are often already publicly available.
In the CY 2020 OPPS/ASC proposed rule, we stated that it is clear
that such data is necessary for consumers to be able to determine their
potential out-of-pocket costs in advance, and that we believe the
release of such data would help drive down healthcare costs (as
discussed above and supported by recent price transparency research).
However, we also stated we recognized that the impact resulting from
the release of negotiated rates is largely unknown and that some
stakeholders had expressed concern that the public display of
negotiated rates, at least without additional legislative or regulatory
efforts, may have the unintended consequence of increasing healthcare
costs of hospital services in highly concentrated markets or as a
result of anticompetitive behaviors.\63\
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\63\ King JS, Muir MA, Alessi SA. Clarifying Costs Can Increased
Price Transparency Reduce Healthcare Spending? 4 William & Mary
Policy Review 319 (2013). Available at: https://pdfs.semanticscholar.org/f604/1a0484c65c593525d0c07e040cf655697f2d.pdf.
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Moreover, we recognized in the CY 2020 OPPS/ASC proposed rule that
requiring release of all payer-specific negotiated charges for all
hospital items and services (both individual items and services as well
as service packages) would mean releasing a large amount of data. To
get a sense for the number of potential negotiated rates a hospital may
have, we conducted an internal analysis of plans in the regulated
individual and small group insurance markets under the ACA. Our
analysis indicated that the number of products or lines of service per
rating area ranges from approximately 1 to 200 in the individual market
(averaging nearly 20 products or lines of service in each rating area),
while in the small market group, the number ranges from 1 to 400
(averaging nearly 40 products or lines of service in each rating area).
We further noted our belief that most, if not all, hospitals maintain
such data electronically because these data are used routinely for
billing, and concluded that disclosure of such large amounts of charge
information would present little burden for a hospital to
electronically pull and display online in a machine-readable format (as
discussed in more detail in the CY 2020 OPPS/ASC proposed rule at 84 FR
39581 through 39585). We went on to explain that ensuring display of
such a large amount of data in a consumer-friendly manner may pose
greater challenges.
In the CY 2020 OPPS/ASC proposed rule, we noted that, in displaying
the payer-specific negotiated charges, hospitals would display all
negotiated charges, including, for example, charges
[[Page 65543]]
negotiated with Medicare Advantage plans because such rates are
negotiated. Conversely, hospitals would not include payment rates that
are not negotiated, such as rates set by certain healthcare programs
that are directly government-financed, for example, those set by CMS
for FFS Medicare. We indicated, however, that we believed the display
of a non-negotiated rate (for example, display of a Medicare and
Medicaid FFS rate for an item or service) in conjunction with the gross
charge and the payer-specific negotiated charges for the same item or
service could be informative for the public and that the proposals
would not preclude hospitals from displaying them.
Finally, we proposed to codify the definition of ``payer-specific
negotiated charge'' and ``third party payer'' at new 45 CFR 180.20. We
invited public comment on our proposal to define a type of ``standard
charge'' as a ``payer-specific negotiated charge.'' We also sought
public comment on whether and how the release of such specific charge
information could result in unintended consequences and on whether and
how there may be different methods for making such information
available to individuals who seek to understand what their out-of-
pocket cost obligations may be in advance of receiving a healthcare
service.
Comment: Many individual commenters and organizations, including
patient/consumer advocates, IT and tool developers, medical
associations, and small business plan entities, were strongly in favor
of the release of payer-specific negotiated charges, indicating that
such information is essential for individual decision-making. One
commenter stated that the Administration's goal to improve the value of
care relies on the disclosure of negotiated rates.
By contrast, many commenters, including commenters from hospitals
and large insurers, indicated that the release of gross charges or
payer-specific negotiated charges would not be helpful or meaningful to
consumers who want to know their individual out-of-pocket estimates.
Many commenters noted that the release of gross and payer-negotiated
charges is not sufficient by itself, highlighting consumers' need for
additional information (such as co-pay, deductible, etc.) to get an
individualized out-of-pocket estimate. Several commenters stated their
belief that identification of the payer was not necessary for
negotiated charges to be useful to the public. Several commenters
raised concern related to the potential for patient confusion over the
posting of negotiated charges, including if they try to determine how
it impacts their financial obligation or over potential discrepancies
between the amount the hospital makes public and the amount the insurer
indicates to the patient in EOBs sent after the fact. Many commenters
stated that they do not believe consumers will use this information.
Response: We appreciate the response from stakeholders who
expressed support for our proposed definition of a type of standard
charge as the payer-specific negotiated charge. We agree for the policy
reasons indicated in the CY 2020 OPPS/ASC proposed rule (84 FR 39579
through 39580) and by commenters that public disclosure of payer-
specific negotiated charge (also known as negotiated rates) is
essential for insured individuals' decision-making. For the reasons we
have indicated, we disagree with commenters who indicated that payer-
specific negotiated charges are meaningless to consumers, but we do
agree that a payer-specific negotiated charge does not, in isolation,
provide a patient with an individualized out-of-pocket estimate. As
explained in the GAO report we describe in section II.A. of this final
rule, payer-specific negotiated charges are a critical piece of
information necessary for patients to determine their potential out-of-
pocket cost estimates in advance of a service. As explained in section
II.D.1 of this final rule, EOBs are designed to communicate provider
charges and resulting patient cost obligations, taking third party
payer insurance into account, and the payer-specific negotiated charge
is a standard and critical data point found on patient's EOB. When a
consumer has access to payer-specific negotiated charge information
prior to receiving a healthcare service (instead of sometimes weeks or
months after the fact when the EOB arrives), in combination with
additional information from payers, it can help him or her determine
potential out-of-pocket cost. Knowing a negotiated charge is also
important because a growing number of insured healthcare consumers are
finding that some services are more affordable when they elect to
forego utilizing their health insurance product and, instead, pay out-
of-pocket. We further agree that consumers may be able to get a general
sense of the cost of healthcare services by viewing de-identified
negotiated rates, and we address this issue in more detail in section
II.D.4.d of this final rule. However, we believe that having hospitals
disclose payer-specific negotiated charges would provide consumers with
more specific information for their particular circumstance and
insurance plan.
We disagree that there will be confusing discrepancies between the
posted hospital charges and the patient's EOB because payer-specific
negotiated rates are agreed upon, and, therefore, known in advance by
both hospitals and third party payers. We suggest that hospitals access
and review the rate sheets (also referred to as rate tables or fee
schedules) that are typically included in the contracts hospitals have
with third party payers in order to ensure the information they make
public is consistent with their contracted rates.
Finally, based on the multitude of comments we received from
patient advocates and individual consumers, we believe that patients
will use the charge information that hospitals make public.
Additionally, hospital charge information can inform shared decision-
making and patient-centric referrals at the point of care. Recent
research suggests that an increasing number of patients are seeking
information from their providers about the anticipated costs of
healthcare services. For example, in a recent national survey, a
majority of patients, physicians, and employers are ready, or feel a
responsibility, to have cost of healthcare conversations.\64\ Such
conversations depend on the availability of standard charge
information.
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\64\ University of Utah Health website, Let's Talk About Money,
https://uofuhealth.utah.edu/value/lets-talk-about-money.php.
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Comment: Many commenters, including hospital associations and large
insurers, questioned CMS' legal authority to require disclosure of
payer-specific negotiated charges. For example, many commenters
believed that payer-specific negotiated rates are proprietary and
requiring their disclosure would infringe upon intellectual property
rights recognized by Congress through the Defend Trade Secrets Act of
2016 (DTSA).\65\ A few commenters indicated that disclosure of payer-
specific negotiated charges was likely limited under the Freedom of
Information Act (FOIA). Commenters argued that the FOIA protects trade
secrets and confidential commercial or financial information against
broad public disclosure. These commenters further asserted that the
requirement to disclose payer-specific negotiated charges would violate
the First Amendment, and, therefore, compelling disclosure would be
unconstitutional. Several commenters pointed out that
[[Page 65544]]
some contracts between hospitals and payers include non-disclosure
clauses, prohibiting the hospital from disclosing the rates they
negotiated with third party payers.
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\65\ 18 U.S.C. 1836.
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Response: We believe that we have authority to define ``standard
charges'' to mean the regular rate established by the hospital for an
item or service provided to a specific group of paying patients, and
that one type of standard charges is payer-specific negotiated charges.
As explained in section II.D.2 of this final rule, the term ``standard
charges'' is not defined in either the SSA or the PHS Act. We are also
not aware of any historical usage of the term by the industry, and note
that its association with the rates in a hospital chargemaster appears
to have originated with our guidelines that took effect on January 1,
2019. Additionally, we note that many stakeholders (including
hospitals) have provided feedback that our current guidelines are
neither sufficient to inform consumers (particularly those with
insurance) what their charges for a hospital item or service will be,
nor reflective of the financial liability that they will actually
incur. We therefore concluded it would be reasonable to define payer-
specific negotiated charges as a type of ``standard charge.''
We do not believe that the payer-specific negotiated charges
hospitals would be required to disclose are proprietary or would
constitute trade secrets. To the contrary, this information is already
generally disclosed to the public in a variety of ways, for example,
through State databases and patient EOBs. For example, New Hampshire
has released payer and provider specific negotiated rates in its state
operated HealthCost database. Maine has also been releasing negotiated
rate information for over a decade. Additionally, the rates are
routinely available to patients through EOBs. As noted elsewhere, that
presentation of both gross charges and payer-specific negotiated
charges is consistent with the standard charges found in a patient's
EOBs that health insurance plans are required to provide to patients
following a healthcare service. EOBs include such data points as: The
type of service provided; the amount the hospital billed for the
service (which we define as the gross charge for purposes of these
requirements); any in-network discount an insured patient received
(which we define as the payer-specific negotiated charge for purposes
of these requirements); and the remaining amount owed out-of-pocket and
any portion of that amount applied toward the patient's deductible.
Additionally, negotiated rates are relatively easy to access, for
example, by competitors in a local market, by price transparency
vendors who use reverse engineering to determine negotiated rates for
their tools, and by private entities that use crowdsourcing efforts to
collect the standard charge information found on EOBs and display them
online to assist the public in price shopping.\66\
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\66\ https://clearhealthcosts.com/pricecheck-share-form/.
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With respect to the Defend Trade Secrets Act of 2016, we do not
believe it is applicable here, as it applies only to trade secrets that
are ``misappropriated,'' which is defined by reference to, among other
things, ``improper means,'' where there was a ``duty to maintain the
secrecy,'' or ``accident or mistake.'' We do not believe any of the
meanings of the term ``misappropriation'' under the Defend Trade
Secrets Act apply to a circumstance where an agency rule requires
disclosure of certain information. 18 U.S.C. 1836 et seq.
Finally, to the extent commenters intended to cite the Trade
Secrets Act, we note that it applies only to disclosures ``not
authorized by law,'' in contrast to the circumstance here, where this
final rule requires disclosure of certain information. 18 U.S.C. 1905.
We would also note that, as a threshold matter, the Trade Secrets Act
contemplates disclosure by a federal actor (``an officer or employee of
the United States or of any department or agency thereof . . . ''), and
not disclosures by private entities, as contemplated by this final
rule.
Consistent with price transparency and economics research
(discussed in section II.D.1 and elsewhere in this final rule), we
believe that the disclosure of payer-specific negotiated charges would
serve a greater public interest and that ``concealing negotiated price
information serves little purpose other than protecting dominant
providers' ability to charge above-market prices and insurers' ability
to avoid paying other providers those same elevated rates.'' \67\ For
Maine, one State official indicated that ``to date, there is no
evidence that the release of [Maine Health Data Organization] claims
data has resulted in an anticompetitive market. In fact, quite the
opposite. Transparency is what fosters a competitive market.'' \68\
Similarly, disclosure of claims data in New Hampshire has resulted in
increased competition and reduced prices for healthcare services.\69\
Additionally, even if a contract between a hospital and a payer
contained a provision prohibiting the public disclosure of its terms,
it is our understanding that such contracts typically include
exceptions where a particular disclosure is required by Federal law.
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\67\ Catalyst for Payment Reform. ``Report Card on State Price
Transparency Laws,'' July 2015. Available at: https://www.catalyze.org/wp-content/uploads/woocommerce_uploads/2017/04/2015-Report-Card-on-State-Price-Transparency-Laws.pdf.
\68\ Gudiksen KL, et al. The Secret of Health Care Prices: Why
Transparency Is in the Public Interest. California Health Care
Foundation. July 2019. Available at: https://www.chcf.org/wp-content/uploads/2019/06/SecretHealthCarePrices.pdf.
\69\ Brown ZY. Equilibrium Effects of Health Care Price
Information. The Review of Economics and Statistics. Published
October 2019; 101:4, 699-712. Available at: https://www-
personal.umich.edu/~zachb/zbrown_eqm_effects_price_transparency.pdf.
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With respect to FOIA, while Exemption 4 does protect confidential
trade secrets or confidential commercial information, it does not apply
to disclosures by private entities such as hospitals as contemplated by
this rule.
Finally, requiring hospitals to make public standard charges is
consistent with First Amendment jurisprudence. Rules, such as this one,
that require certain factual commercial disclosures pass muster under
the First Amendment where the disclosure advances a government interest
and does not unduly burden speech. When the government requires
accurate disclosures in the marketing of regulated products under
appropriate circumstances, it does not infringe on protected First
Amendment interests. As the United States Supreme Court recognized in
Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626 (1985) and
recently confirmed in Nat'l Inst. of Family and Life Advocates v.
Becerra, 138 S. Ct. 2361, 2372, 2376 (2018) (``NIFLA''), required
disclosures of factual, noncontroversial information in commercial
speech may be subject to more deferential First Amendment scrutiny.
Under the approach articulated in Zauderer, courts have upheld required
disclosures of factual information in the realm of commercial speech
where the disclosure requirement reasonably relates to a government
interest and is not unjustified or unduly burdensome such that it would
chill protected speech.\70\ As further discussed below, and cited
elsewhere in this final rule, the required disclosures here advance the
[[Page 65545]]
government's substantial interest in providing consumers with factual
price information to facilitate more informed health care decisions, as
well as the government's substantial interest in lowering healthcare
costs, as further discussed below.\71\ As discussed elsewhere in this
final rule, each of the standard charges we have chosen specifically
because they are relevant to a specific group of consumers. For
example, the negotiated charges are directly relevant to patients
covered by a payer's specific insurance product. We note that hospitals
regularly use their payer-specific negotiated charges to determine
insured patient out-of-pocket costs, and payer-specific negotiated
charges are also regularly supplied to consumers on EOBs.
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\70\ See Zauderer, 471 U.S. at 651; Milavetz v. United States,
559 U.S. 229, 250, 252-53 (2010); NIFLA, 138 S. Ct. at 2376 (``[W]e
do not question the legality of . . . purely factual and
uncontroversial disclosures about commercial products.'').
\71\ See generally, Pharm. Care Mgmt. Ass'n v. Rowe, 429 .3d
294, 310 (1st Cir. 2005) (recognizing that the government interest
in cost-effective health care justified disclosure of financial
interests of pharmacy benefit managers); N.Y. State Rest. Ass'n v.
N.Y. City Bd. Of Health, 556 F.3d 114, 134 (2d Cir. 2009)
(recognizing that the government interest in ``promot[ing] informed
consumer decision-making'' justified posting of calories on menus in
chain restaurants).
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Furthermore, these disclosures would neither ``drown[ ] out the
[speaker's] own message'' or ``effectively rule[ ] out'' a mode of
communication.\72\ Indeed, the requirement to provide standard charge
information is not unduly burdensome where, as here, the hospital has
the ability to convey other information of its choosing in the
remainder of the website and other interactions with the public.
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\72\ NIFLA, 138 S. Ct. at 2378.
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Some comments assert that the rule should be evaluated under the
intermediate scrutiny test for commercial speech articulated in Central
Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n, 447 U.S. 557 (1980).
Under that test, agencies can regulate speech where the regulation
advances a substantial government interest and the regulation is no
more extensive than necessary to serve that interest. Although many of
these comments failed to offer any explanation as to why the more
deferential review under Zauderer would not apply, one comment asserted
that the Zauderer test is limited to disclosures that appear in
advertising. We disagree. ``Although the Court in Zauderer may have
referred repeatedly to advertising . . . , these references were
contextual and not the sine qua non of Zauderer's reasoning. Zauderer
did not base its holding on any notion of estoppel or equity, but on
the lack of a significant constitutional interest in not disclosing
factual and noncontroversial information to consumers.'' CTIA--Wireless
Ass'n v. City of Berkeley, 158 F. Supp. 3d 897, 903 (N.D. Cal. 2016),
aff'd, 928 F.3d 832, 842 (9th Cir. 2019).
In any event, although we believe that Zauderer provides the
appropriate framework for review, the rule also satisfies the elements
of the Central Hudson test. The government interest here is clear. As
discussed above, the required disclosures here advance the government's
substantial interest in providing consumers with factual price
information to facilitate more informed health care decisions. In
addition, these disclosures advance the government's substantial
interest in lowering healthcare costs. Healthcare costs continue to
rise, and healthcare spending is projected to consume almost 20 percent
of the economy by 2027.\73\ Hospital spending accounts for a
substantial share of overall healthcare spending, and hospital charges
for similar procedures can vary significantly from hospital to
hospital. It is well-documented that the lack of transparency in
hospital prices is a barrier that prevents consumers from understanding
what their financial liability will be for hospital items and services,
and that lack of knowledge not only affects their ability to shop for
value, but also gives them no ability to proactively make decisions
that could impact that financial liability. Additionally, as discussed
in section II.D.1, these rising costs impact the Medicare Trust Funds
and the amount paid to hospitals by Medicare.
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\73\ CMS. National Health Expenditures Projections, 2018-2027:
Forecast Summary. Available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/ForecastSummary.pdf.
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We note further that public comments received for this rule,
healthcare consumers resoundingly expressed support for having access
to hospital pricing information. This public sentiment is echoed in
numerous studies and surveys show that consumers are concerned about
the high cost of healthcare, want to be able to know prices prior to
purchasing a healthcare service, and are frustrated by the lack of
access to information on medical costs before receiving medical
services.74 75 76 77
78 Employers are also actively seeking healthcare pricing
information for initiatives that drive reductions in healthcare
costs79 80 81 and once they have
access, they are able to drive healthcare value.\82\
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\74\ Sinha SL, et al. ``The Demographics of Healthcare Price
Transparency.'' Accenture Consulting, 2017. Available at: https://www.accenture.com/_acnmedia/pdf-69/accenture-health-the-demographics-of-healthcare-price-transparency-infographic.pdf.
\75\ Foundation for Government Accountability. ``Poll: Voters
Want The Right To Shop For Health Care.'' January 29, 2018.
Available at: https://thefga.org/poll/right-to-shop-poll/.
\76\ Schleifer D, et al. ``Still Searching: How People Use
Health Care Price Information in the United States.'' Public Agenda,
April 2017. Available at: https://www.publicagenda.org/wp-content/uploads/2019/09/PublicAgenda_StillSearching_Brief_2017.pdf.
\77\ ``News Reports about a Weakening Economy Impacting How Some
Patients Seek Medical Treatment.'' TransUnion. September 17, 2019.
Available at: https://newsroom.transunion.com/news-reports-about-a-weakening-economy-impacting-how-some-patients-seek-medical-treatment/.
\78\ Shih YT, and Chien C. A review of cost communication in
oncology: Patient attitude, provider acceptance, and outcome
assessment. Cancer, 123: 928-39. Available at: https://onlinelibrary.wiley.com/doi/full/10.1002/cncr.30423.
\79\ Livingston S. Setting the bar for hospital prices: NC aims
to tie reimbursement to Medicare for state employees. Modern
Healthcare. March 2, 2019. Available at: https://www.modernhealthcare.com/hospitals/setting-bar-hospital-prices.
\80\ Prager E. Consumer Responsiveness to Simple Health Care
Prices: Evidence from Tiered Hospital Networks. September 21, 2017.
Available at: https://pdfs.semanticscholar.org/053e/218f13dcd7f21002c623268151918fa708f0.pdf?_ga=2.190709035.1212076034.1563994376-1742025875.1563994376.
\81\ Wu S, et al. Price Transparency for MRIs Increased Use Of
Less Costly Providers And Triggered Provider Competition. Health
Affairs. August 2014; 33(8). Available at: https://doi.org/10.1377/hlthaff.2014.0168.
\82\ Sachdev G, et al. Self-Insured Employers Are Using Price
Transparency To Improve Contracting With Health Care Providers: The
Indiana Experience. Health Affairs. October 7, 2019. Available at:
https://www.healthaffairs.org/do/10.1377/hblog20191003.778513/full/.
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The rule is also narrowly tailored to achieve the government's
interest because there is a direct connection between the disclosure of
hospital standard charge information and reduced healthcare costs and
increased patient satisfaction. As we have described elsewhere in this
final rule, we believe the regulations we are establishing are an
important first step in providing information to consumers to support
their healthcare decision-making. Although some States have made
progress in promoting price transparency, most State efforts fall
short. Further, existing hospital initiatives to make public their
gross charges are not sufficient to provide insured consumers with the
information applicable to them. Specifically, insured consumers need to
understand the rates third party payers have negotiated (payer-specific
negotiated charges) on their behalf for hospital items and services.
There is emerging evidence that when healthcare consumers use
healthcare pricing information, cost savings results for both inpatient
and outpatient care without sacrificing
[[Page 65546]]
quality.83 84 85 86
87 Moreover, cost savings drive competition 88
89 and create a `spillover' effect benefitting all regional
consumers.90 91 92 Additionally,
providers are discovering that providing price estimates ahead of a
healthcare service results in fewer billing-related complaints,
decreased revenue losses for the provider, and overall increased
patient satisfaction.93 94 Finally, we are not
aware of any alternatives to the policies in this final rule that would
be as effective in achieving these results. As discussed above and
elsewhere in this final rule, hospital chargemaster disclosures do not
include the charges applicable to insured consumers; and relying on
individual hospitals for voluntary disclosures may not allow consumers
to make comparisons between hospitals or sufficiently drive competition
or create ``spillover'' effects. Similarly, relying on state-by-state
initiatives would only benefit consumers in some states.
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\83\ Robinson JC and Brown TT. Increases In Consumer Cost
Sharing Redirect Patient Volumes And Reduce Hospital Prices For
Orthopedic Surgery. Health Affairs. August 2013; 32(8). Available
at: https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2013.0188.
\84\ Blase B. ``How Price Transparency Would Revolutionize
Healthcare.'' New York Post. October 12, 2019. Available at: https://nypost.com/2019/10/12/how-price-transparency-would-revolutionize-healthcare/.
\85\ Rhoads J. Right to Shop for Public Employees: How Health
Care Incentives are Saving Money in Kentucky. Foundation for
Government Accountability. March 8, 2019. Available at: https://thefga.org/wp-content/uploads/2019/03/RTS-Kentucky-HealthCareIncentivesSavingMoney-DRAFT8.pdf
\86\ Lieber EMJ. ``Does It Pay to Know Prices in Health Care?''
American Economic Journal. 2017, 9(1): 154-179. Available at:
https://pubs.aeaweb.org/doi/pdfplus/10.1257/pol.20150124.
\87\ Whaley C, et al. ``Association Between Availability of
Health Service Prices and Payments for These Services.'' JAMA. 2014;
312(16):1670-1676. Available at https://jamanetwork.com/journals/jama/fullarticle/1917438.
\88\ Boynton A, and Robinson JC. Appropriate Use Of Reference
Pricing Can Increase Value. Health Affairs. July 7, 2015. Available
at: https://www.healthaffairs.org/do/10.1377/hblog20150707.049155/full/.
\89\ Wu S, et al. Price Transparency for MRIs Increased Use Of
Less Costly Providers And Triggered Provider Competition. Health
Affairs. August 2014; 33(8). Available at: https://doi.org/10.1377/hlthaff.2014.0168.
\90\ Brown ZY. Equilibrium Effects of Health Care Price
Information. The Review of Economics and Statistics. Published
October 2019; 101:4, 699-712. Available at: https://www-
personal.umich.edu/~zachb/zbrown_eqm_effects_price_transparency.pdf.
\91\ Wu S, et al. Price Transparency for MRIs Increased Use Of
Less Costly Providers And Triggered Provider Competition. Health
Affairs. August 2014; 33(8). Available at: https://doi.org/10.1377/hlthaff.2014.0168.
\92\ Blase B. ``How Price Transparency Would Revolutionize
Healthcare.'' New York Post. October 12, 2019. Available at: https://nypost.com/2019/10/12/how-price-transparency-would-revolutionize-healthcare/.
\93\ Otero HJ, et al. The Cost-Estimation Department: A Step
Toward Cost Transparency in Radiology. JACR. February 2019; 16(2):
194-95. Available at: https://www.jacr.org/article/S1546-1440(18)30981-5/fulltext.
\94\ Hammer DC. ``Adapting customer service to consumer-directed
health care: by implementing new tools that provide greater
transparency in billing, hospitals can decrease collection costs
while improving consumer satisfaction.'' Healthcare Financial
Management. September 2006; 60(9). Available at: https://go.galegroup.com/ps/anonymous?id=GALE%7CA151440927&sid=googleScholar&v=2.1&it=r&linkaccess=abs&issn=07350732&p=AONE&sw=w.
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Comment: Many commenters expressed confusion related to the term
payer-specific negotiated charge, indicating that such a hospital
charge does not exist, or that the term is in conflict with terminology
used within the healthcare industry, such as ``negotiated rates'' or
the ``allowed amount.'' Several commenters asserted that hospitals do
not negotiate ``payment rates,'' ``methodologies'' or ``allowed
amounts'' with third party payers. Additionally, many commenters
suggested in general usage (and according to one commenter, as defined
by dictionary.com), the definition of ``standard'' means ``usual,
common, or customary'' and asserted that payer-specific negotiated
charges are not usual, common, or customary because they vary from
payer to payer.
Other commenters seemed to suggest that payer-specific charges
could not be identified because, as one commenter noted, rates
associated with DRGs can have three levels of payments based on the
types of co-morbidities and can change based on change in a patient's
condition or treatment plan.
Response: As explained in the CY 2020 OPPS/ASC proposed rule, we
could not identify an existing definition of ``standard charges,'' nor
do we believe that a single ``standard charge'' can be identified for
purposes of implementing section 2718(e) of the PHS Act, since factors
such as insured status and the particular third-party payer plan drive
the hospital charges borne by consumers. Therefore, we proposed a new
definition for ``standard charges'' (which can also be called
``rates'') that could apply to certain identifiable groups of
individuals--specifically, individuals that are self-pay and
individuals that have third party payer coverage. Thus, the charges the
hospital has negotiated with a specific payer for a hospital item or
service are the standard charges that apply to consumers with a
specific plan through a specific insurer--in other words, the rate is
the usual or common rate for the members of that plan. Therefore, one
type of ``standard charge'' is the gross rate or charge found in the
hospital chargemaster (which aligns with the PRM1's definition of
``charges'') while another ``standard charge'' is the charge or rate
that the hospital has negotiated with a third party payer for an item
or service.
When hospitals contract with a third party payer to be included in
the plan's network, the hospital and insurer agree to specific, often
discounted, prices that will apply to items or services furnished by
the hospital. Best practice according to healthcare financial
management experts and revenue cycle managers dictates that these
payer-specific negotiated charges should be included in hospital
contracts and listed in associated rate sheets (also called rate tables
or fee schedules). Rate sheets include a list of all hospital items and
services for which the hospital and payer have established regular
rates (for example, the payer-specific negotiated charges that apply to
hospital items and services). Hospitals also routinely keep and
maintain such rate sheets to police and validate their reimbursements
from payers as part of their revenue management cycle, holding payers
accountable for the rates they have negotiated with the hospital. Such
rates tables are also used by hospitals to compare against benchmarks
(such as Medicare FFS rates) to determine where it is advantageous to
renegotiate for higher amounts at the next opportunity. The contracted
rate, sometimes called the ``negotiated rate,'' ``in-network amount,''
``allowed charges'' or ``negotiated discount'' can be significantly
lower than what the hospital would charge an individual who did not
have an insurance company negotiating discounts on his or her behalf,
and this contracted rate is reflected in the patient's EOB after the
healthcare service has been provided. As such, we do not believe the
term ``payer-specific negotiated charges'' conflicts with any
particular defined industry term or with the term ``charges'' as
defined by Medicare. We further clarify that the payer-specific
negotiated charge is the charge the hospital has negotiated with a
third party for an item or service and does not refer to the amount the
hospital is ultimately paid by the insurer or patient for an item or
service. We believe that it is unlikely such amounts could be
considered hospital standard charges and that it would prove very
difficult for a hospital to make such amounts public in advance, given
that, as commenters point out, the actual paid amounts are dependent on
information that the hospital does not have without
[[Page 65547]]
contacting the insurer to determine the specifics of the patient's
obligations under the patient's contract with the insurer.
We note that the payer-specific negotiated charge for a DRG is the
rate the hospital has negotiated for the DRG as a service package. We
clarify that the requirement to make public the payer-specific
negotiated charge for a DRG would mean the base rate that is negotiated
by the hospital with the third party payer, and not the adjusted or
final payment received by the hospital for a packaged service.
Comment: In response to CMS' request for comment on the potential
unintended consequences of releasing payer-specific charge information,
many commenters asserted such disclosure would be confusing or even
harmful to patients. For example, many commenters raised patient-
specific concerns that the policy would impact patients negatively by
creating reliance on published rates when they could potentially be
required to pay a higher out-of-pocket amount after the service, or
could impact their health by confusing them or causing them to seek out
cheaper care rather than the most effective or best quality care. One
commenter expressed concern that display of payer-specific negotiated
charges would shift the burden of understanding the costs of care from
the hospitals/payers to consumers.
Response: We thank the commenters for their input. We continue to
believe that the public posting of hospital standard charge information
will be beneficial to healthcare consumers who need to obtain items and
services from a hospital, healthcare consumers who wish to view
hospital prices prior to selecting a hospital, clinicians who use the
data at the point of care when making referrals, and other members of
the public who may develop consumer-friendly price transparency tools.
This belief is supported by the many commenters who asserted the desire
to have better access to, and understanding of, hospital charges. While
we cannot discount the possibility that some consumers may find
required hospital data disclosures confusing, we believe that the vast
majority will find the increased availability of data, especially as it
may be reformatted in consumer-friendly price transparency tools,
overwhelmingly beneficial. Additionally as noted in section II.D.1 of
this final rule, patients already receive this information in the form
of EOBs, so we do not believe that advance notice of such standard
charges would cause confusion beyond the confusion and frustration that
currently exists for lack of such knowledge as expressed by commenters
who feel they are ``flying blind.'' We also note that nothing in this
final rule would prevent a hospital from engaging in patient education
or otherwise assisting patients in understanding potential hospital
charges in advance of receiving a hospital service, including
articulating factors that may influence ultimate patient out-of-pocket
costs or displaying quality information along with hospital charge
information.
Moreover, we strongly disagree that the display of payer-specific
negotiated charges would effect some shift from hospitals/payers to
consumers of the burden of understanding the costs of care, and we
pointedly note that research,\95\ vast amounts of media reports,\96\ as
well as many commenters to the CY 2020 OPPS/ASC proposed rule make
clear that consumers already bear, and are exceptionally frustrated at
the lack of publicly available data to help ease, that burden. We
believe that requiring disclosure of hospital standard charges is a
necessary first step to begin to alleviate consumers' frustration in
understanding their potential cost of care in advance of the receipt of
services.
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\95\ Aliferis L. Variation in Prices for Common Medical Tests
and Procedures. JAMA Intern Med. 2015; 175(1):11-12. Available at:
https://jamanetwork.com/journals/jamainternalmedicine/article-abstract/1935935.
\96\ CBS News, Medical Price Roulette: CBS News investigates the
lack of transparency in America's health care system. September 20,
2019. Available at: https://www.cbsnews.com/news/medical-price-roulette-cbs-news-investigates-the-lack-of-transparency-in-americas-health-care-system/.
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Finally, as noted by commenters, knowing the payer-specific
negotiated charges can be highly beneficial for consumers in HDHPs and
in plans where the consumer is responsible for a percentage (that is,
co-insurance) of the negotiated rate. The most common coinsurance
arrangement is 20/80 where the consumer is responsible for 20 percent
of the payer-negotiated charges and the insurer covers the remaining 80
percent. Both HDHPs and co-pays are becoming more common
97 98 and create a great deal of uncertainty for consumers
who can't access the rates hospitals and insurers have negotiated.
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\97\ Cohen RA, et al. Health Insurance Coverage: Early Release
of Estimates From the National Health Interview Survey, January-
March 2018. National Center For Health Statistics. Available at:
https://www.cdc.gov/nchs/data/nhis/earlyrelease/Insur201808.pdf.
\98\ Miller EG, et al. High-Deductible Health Plan Enrollment
Increased From 2006 To 2016, Employer-Funded Accounts Grew In
Largest Firms. Health Affairs. August 2018. Available at: https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2018.0188.
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Comment: Many commenters cautioned that disclosure of payer-
specific negotiated charges would increase, not decrease, healthcare
costs in certain markets due to anticompetitive behaviors or increases
in prices as a result of hospital knowledge of better rates negotiated
by neighboring hospitals. Specifically, many commenters stated that
disclosure of payer-specific negotiated charges could encourage price
fixing and facilitate hospital collusion, causing prices to rise and
thus harming consumers. Others raised concerns that publicly displaying
insurer contract information would make it easier for insurers to
circumvent antitrust safeguards, negatively affecting competition.
Several commenters also argued that the inclusion of payer-specific
negotiated charges as a standard charge would result in adverse market
impacts on published rates and hamper hospitals' ability to negotiate
fair and competitive payment rates with payers. One commenter more
specifically argued that if all payer rates are disclosed, then every
payer paying above the lowest rate would renegotiate to the lowest rate
for every service, leaving hospitals with very little power to object.
One commenter specifically suggested that CMS conduct a pilot study in
only a few markets to determine the impact of the policy on negotiated
prices before finalizing.
Response: As indicated in our literature review and Economic
Analyses (84 FR 39630 through 84 FR 39634), we concluded that
implementing our proposals, most of which we are finalizing in this
final rule, would yield many benefits with particular benefits for
consumers who we believe have a right to know the cost of hospital
services before committing to them and to be able to shop for the best
value care and for employers who purchase healthcare for their
employees.
In general, our belief that accessible pricing information would
reduce healthcare costs by encouraging providers to offer more
competitive rates is consistent with predictions of standard economic
theory.\99\ Economists have long concluded that markets work best when
consumer prices reflect the actual cost to create and deliver the
product.\100\ And a number of empirical
[[Page 65548]]
studies on price transparency in other markets shows that transparency
initiatives tend to lead to more consistent, lower
prices.101 102 However, some economists do not believe that
healthcare price transparency will prevent rising costs due to the
unique characteristics of the healthcare market.\103\
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\99\ CRS Report for Congress: Does Price Transparency Improve
Market Efficiency? Implications of Empirical Evidence in Other
Markets for the Healthcare Sector. July 24, 2007. Available at:
https://fas.org/sgp/crs/secrecy/RL34101.pdf.
\100\ Murray R. Setting Hospital Rates to Control Costs and
Boost Quality: The Maryland Experience. Health Affairs. September/
October 2009; 28(5). Available at: https://www.healthaffairs.org/doi/10.1377/hlthaff.28.5.1395.
\101\ CRS Report for Congress: Does Price Transparency Improve
Market Efficiency? Implications of Empirical Evidence in Other
Markets for the Healthcare Sector. July 24, 2007. Available at:
https://fas.org/sgp/crs/secrecy/RL34101.pdf.
\102\ Kim M. The Effect of Hospital Price Transparency in Health
Care Markets. 2011. Available at: https://repository.upenn.edu/dissertations/AAI3475926/.
\103\ King JS, Muir MA, Alessi SA. Clarifying Costs Can
Increased Price Transparency Reduce Healthcare Spending? 4 William &
Mary Policy Review 319 (2013). Available at: https://pdfs.semanticscholar.org/f604/1a0484c65c593525d0c07e040cf655697f2d.pdf.
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In our discussion of available research and market impacts (84 FR
39579 through 84 FR 39580, we took into account the potential for
unintended consequences. Specifically, we noted that at minimum, our
policy to require disclosure of payer-specific negotiated charges would
release data necessary to better understand how the level of price
dispersion in various healthcare markets impacts healthcare spending
and consumer out-of-pocket costs. As noted in the CY 2020 OPPS/ASC
proposed rule, negotiated charges for various procedures varies widely
within and across geographic regions on the United States.\104\ Some
factors associated with the level of hospital price dispersion in a
geographic area are the hospital's size, healthcare demand, labor
costs, and technology, although it was the hospital's market power
(level of competition) that was most positively associated with high
price dispersion.105 106 One researcher found that variation
in prices across hospital referral regions is the primary driver of
variation in spending per enrollee for those privately insured, while
the quantity of care provided across hospital referral regions is the
primary driver of variation in spending per beneficiary for
Medicare.\107\ One major barrier to fully understanding healthcare
price variation (and understanding the impact of transparency of
healthcare pricing in general) is the lack of availability of
negotiated charges to researchers and the public.\108\ We noted that
our proposals would make hospital charge information available, which
would generate a better understanding of (1) hospital price dispersion,
and (2) the relationship between hospital price dispersion and
healthcare spending. Understanding these relationships through release
of pricing data could lead to downward price pressure on healthcare
prices and reductions in overall spending system-wide, particularly in
markets where there is insurer and hospital competition,\109\ or to
considerable spending reductions and reduction of price
dispersion.\110\
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\104\ Kennedy K, et al. Health Care Cost Institute. Past the
Price Index: Exploring Actual Prices Paid for Specific Services by
Metro Area. Healthy Marketplace Index. April 30, 2019. Available at:
https://www.healthcostinstitute.org/blog/entry/hmi-2019-service-prices.
\105\ Cooper Z, et al. The Price Ain't Right? Hospital Prices
and Health Spending on the Privately Insured. The Quarterly Journal
of Economics. December 2015. Available at: https://pdfs.semanticscholar.org/cb9c/f90786cc39ddac6d88f3ba1074a7c2d5f0a5.pdf.
\106\ Bai G and Anderson GF. Market Power: Price Variation Among
Commercial Insurers For Hospital Services. Health Affairs. Oct 2018;
37(10): 1615-1622. Available at: https://www.healthaffairs.org/doi/10.1377/hlthaff.2018.0567.
\107\ Cooper Z, et al. The Price Ain't Right? Hospital Prices
and Health Spending on the Privately Insured. The Quarterly Journal
of Economics. December 2015. Available at: https://pdfs.semanticscholar.org/cb9c/f90786cc39ddac6d88f3ba1074a7c2d5f0a5.pdf.
\108\ Ibid.
\109\ Ho K and Lee RS. Insurer Competition and Negotiated
Hospital Prices. August 2013. Available at: https://pdfs.semanticscholar.org/b6e9/11d7e171d3074b473439f93d377f4a4202bf.pdf.
\110\ Brown ZY. An Empirical Model of Price Transparency and
Markups in Health Care. August 2019. Available at: https://www-
personal.umich.edu/~zachb/
zbrown_empirical_model_price_transparency.pdf.
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In their comprehensive analysis of the impact of regulations across
more than 30 States requiring public access to the prices of hospital
procedures, some researchers found that regulations lowered the price
of shoppable procedures such as hip replacements by approximately five
percent overall compared to prices for non-shoppable procedures such as
appendectomies. They further found that half of the observed price
reduction in charges was due to hospitals lowering their prices to
remain competitive. This was particularly true for high priced
hospitals and for hospitals in competitive urban areas.\111\ Research
has also indicated that price transparency initiatives can decrease
prices paid by consumers and insurers. One study found that following
the introduction of a State-run website providing out-of-pocket costs
for a subset of shoppable outpatient services reduced the charges for
these procedures by approximately 5 percent for consumers, in part by
shifting demand to lower cost providers.\112\ In addition, the study
found that, following the introduction of the website, insurers over
time experienced a 4-percent reduction in administrative costs for
imaging services.
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\111\ Christensen HB, Floyd E, and Maffett M. ``The Effects of
Price Transparency Regulation on Prices in the Healthcare
Industry.'' Available at: https://www.bakerinstitute.org/media/files/event/01ce2e80/HPF-paper-AHEC-Floyd.pdf.
\112\ Brown ZY. Equilibrium Effects of Health Care Price
Information. The Review of Economics and Statistics. Published
October 2019; 101:4, 699-712. Available at: https://www-
personal.umich.edu/~zachb/zbrown_eqm_effects_price_transparency.pdf.
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Another possibility we considered was that transparency in payer-
specific negotiated charges could narrow the dispersion of prices in a
market, meaning that knowledge of payer-specific charges may not only
result in lowering prices for payers currently paying rates above the
median, but could also increase prices for payers that are currently
paying rates below the median. We considered whether making payer-
specific negotiated prices public could risk disrupting the ability for
certain payers to extract aggressive discounts in the future,
especially from providers in markets with limited competition. For
example, a hospital providing an aggressive discount to a particular
payer may become motivated to withdraw such discount to avoid divulging
such information to other payers with whom they contract.
Several studies of mandated price transparency in non-healthcare
commodity markets have shown suppliers can use the information to their
advantage in maximizing the prices they can charge in markets with
limited competition or where commodities are not easily transferable
across geographies.\113\ We noted that although there are no definitive
conclusions on the effects of price transparency on markets, one study
found that it can either increase or decrease prices depending on the
strength of the bargainers and the size of the market.\114\ While price
transparency gives buyers and sellers important information about the
value of items and services, the effect may result in price increases
by changing the incentives for buyers and sellers may also enable
traders to observe deviations
[[Page 65549]]
from collusive practices. Allowing weaker bargainers to see prices
negotiated by stronger bargainers will change incentives facing buyers
and sellers, and can lead to price increases.
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\113\ See for example, Congressional Research Service Report for
Congress: Does Price Transparency Improve Market Efficiency?
Implications of Empirical Evidence in Other Markets for the Health
Sector. July 24, 2007. Available at: https://fas.org/sgp/crs/secrecy/RL34101.pdf.
\114\ Congressional Research Service Report for Congress: Does
Price Transparency Improve Market Efficiency? Implications of
Empirical Evidence in Other Markets for the Health Sector. July 24,
2007. Available at: https://fas.org/sgp/crs/secrecy/RL34101.pdf.
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In the absence of a national model, we looked to two States that
previously enacted price transparency laws, California and New
Hampshire. California enacted a requirement for hospitals to post their
CDM in 2004, and in 2003, New Hampshire created an all-payer claims
database, later publishing the data in 2007 in a statewide, web-based
price transparency comparison tool. Studies assessing the impact of the
New Hampshire State law have found that the efforts focused on the wide
variation of provider prices, which in turn created opportunities for
new benefit design that incentivized consumer choice of lower costs
providers and sites of service.\115\ In California, the link between
hospital chargemaster data and patient cost was validated through a 10-
year study of the chargemaster data which found that each dollar in a
hospital's list price was associated with an additional 15 cents in
payment to a hospital for privately insured patients (versus publicly
insured patients).\116\ We indicated that this effort to improve the
availability of charge data could open up the possibility to States to
further regulate hospital charges--examples seen in both California and
New Hampshire that took further legislative action to reduce price
dispersion, reduce surprise billing and to place limits on charges for
the uninsured and for out-of-network providers.
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\115\ Tu H, and Gourevitch R. California HealthCare Foundation
and Robert Wood Johnson Foundation. Moving Markets, Lessons from the
New Hampshire Price Transparency Experiment. April 2014. Available
at: https://www.chcf.org/wp-content/uploads/2017/12/PDF-MovingMarketsNewHampshire.pdf.
\116\ Batty M and Ippolito B. Mystery Of The Chargemaster:
Examining The Role Of Hospital List Prices In What Patients Actually
Pay. Health Affairs. April, 2017; 36(4): 689-696. Available at:
https://www.healthaffairs.org/doi/10.1377/hlthaff.2016.0986.
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In addition to economic effects described above, we analyzed
consumer impact and concluded that consumers may feel more satisfied
with their care when they are empowered to make decisions about their
treatment. A recent survey \117\ indicated a strong desire for price
transparency and openness. Eighty-eight percent of the population
polled, demanded improved transparency with respect to their total
financial responsibility, including co-pays and deductibles. Another
study suggests that improving a patient's financial experience served
as the biggest area to improve overall customer satisfaction.\118\
According to a 2011 GAO report, transparent healthcare price
information may help consumers anticipate their healthcare costs,
reduce the possibility of unexpected expenses, and make more informed
choices about their care, including for both shoppable services as
defined in this rule and other hospital items and services in both
outpatient and inpatient settings.\119\
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\117\ See Gruessner V. Consumer Satisfaction Dips When Payers
Lack Price Transparency. Private Payers News (October 3, 2016).
Available at: https://healthpayerintelligence.com/news/consumer-satisfaction-dips-when-payers-lack-price-transparency.
\118\ Experian Health, Improve the healthcare financial journey.
Patient Engagement (June 21, 2018). Available at: https://www.experian.com/blogs/healthcare/2018/06/healthcare-financial-journey/.
\119\ Government Accountability Office. September 2011. Health
Care Price Transparency: Meaningful Price Information Is Difficult
for Consumers to Obtain Prior to Receiving Care. Available at:
https://www.gao.gov/assets/590/585400.pdf.
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A large part of the literature on consumer use of price information
comes from studies of price transparency tools, particularly those
offered by third party payers and for shoppable services. Some studies
of consumer use of price information through web-based tools, such as
those offered by self-insured employers or plans, indicate that they
may help consumers save money on shoppable services. One study examined
consumer use of an employer-sponsored, private price transparency tool
and its impact on claims payments for three common medical services:
Laboratory tests; advanced imaging services; and clinician office
visits.\120\ That study found that those who used the tool had lower
claims payments by approximately 14 percent for laboratory tests; 13
percent for advanced imaging services; and approximately 1 percent for
office visits compared to those who did not use the tool. Another study
found that those employed by a large corporation who used a healthcare
price transparency tool were able to reduce their costs by 10 to 17
percent compared to nonusers.\121\ Those using the tool mainly searched
for information on shoppable services and also tended to have more
limited insurance coverage. However, one study of the use of price
transparency tools by consumers with an employer-based, high deductible
health plan found that consumers' likely perception that higher price
is a proxy for higher quality care may lead them to select higher-cost
options.\122\ This study found a spending drop between 11.8 and 13.8
percent occurring across the spectrum of healthcare service categories
at the health plan level; the majority of spending reductions were due
to consumer quantity reductions across a broad range of services,
including both high and low value care. Another study of the use of
price transparency tools by consumers found that only 10 percent of
consumers who were offered a tool with price information utilized it,
and that there was a slight relative increase in their out-of-pocket
health spending on outpatient services compared to the patient group
that was not offered the tool.\123\
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\120\ Whaley C, et al. ``Association Between Availability of
Health Service Prices and Payments for These Services.'' JAMA. 2014;
312(16):1670-1676. Available at https://jamanetwork.com/journals/jama/fullarticle/1917438.
\121\ Lieber EMJ. ``Does It Pay to Know Prices in Health Care?''
American Economic Journal. 2017, 9(1): 154-179. Available at:
https://pubs.aeaweb.org/doi/pdfplus/10.1257/pol.20150124.
\122\ Brot-Goldberg ZC, et al. What Does a Deductible Do? The
Impact of Cost-Sharing on Health Care Prices, Quantities, and
Spending Dynamics. Cambridge, MA: National Bureau of Economic
Research; Working Paper, October 2015. Available at: https://www.nber.org/papers/w21632.pdf.
\123\ Desai S, et al. Association between availability of a
price transparency tool and outpatient spending. JAMA.
2016;315(17):1874-1881. doi:10.1001/jama.2016.4288. Available at:
https://jamanetwork.com/journals/jama/fullarticle/2518264.
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Although we are not requiring that hospitals develop a price
comparison tool, we encourage innovation in this area by making
standard charges available in a machine-readable format to third-party
tool developers as well as the general public. We continue to believe
that the use of a third-party tool would enhance public access to
pricing data, but we do not believe the absence of one would cause
confusion among consumers on how to use the available standard charge
data made public by the hospital because we are also proposing
requirements for hospitals to make public their payer-specific charges
for a set of shoppable services in a consumer-friendly manner. A large
part of consumer buy-in and understanding may depend on providers'
willingness and ability to make public, and to have conversations with
consumers about, their standard charge data to allow for price
comparison and decisions about upcoming medical treatment. As
consumers' healthcare costs continue to rise, clinicians are in a
unique position to discuss the financial impacts of healthcare
decisions with their patients. One study found that patients will often
choose services based on clinician referral rather than consideration
of
[[Page 65550]]
cost.\124\ We believe that the pricing information made available as a
result of this final rule will help ensure that clinicians have
relevant pricing data to counsel patients on financial options. A
systematic review found that clinicians and their patients believe
communication about healthcare costs is important and that they have
the potential to influence health and financial outcomes, but that
discussions between clinicians and patients about costs are not
common,\125\ even though a majority of patients and physicians express
a desire to have such cost-of-care conversations.\126\ In our review,
we found evidence that physicians were open to having these
conversations, and that they were occurring more frequently, but
providers have also identified the need for price information as a
barrier to discussing costs with patients.127 128 In
addition, a literature review of 18 studies measuring the effects of
charge display on cost and practice patterns found that having
prospective access to prices for radiology and laboratory services
changed physician's ordering behavior, and in 7 of the 9 studies on
cost reported statistically significant cost reduction when charges
were displayed.\129\
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\124\ Chernew M, et al. ``Are Health Care Services Shoppable?
Evidence from the Consumption of Lower-Limb MRI Scans.'' National
Bureau of Economic Research, Working Paper No. 24869. Issued July
2018, revised January 2019. Available at: https://www.nber.org/papers/w24869.
\125\ Meluch AL, and Oglesby WH. (2015). Physician-patient
communication regarding patients' healthcare costs in the US: A
systematic review of the literature. Journal of Communication in
Healthcare, 8(2), 151-160. Available at: https://www.tandfonline.com/doi/full/10.1179/1753807615Y.0000000010?scroll=top&needAccess=true.
\126\ University of Utah: The State of Value in U.S. Healthcare.
Available at: https://uofuhealth.utah.edu/value/.
\127\ Schiavoni KH, et al. How Primary Care Physicians Integrate
Price Information into Clinical Decision-Making, J Gen Intern
Medicine. 2017 January; 32(1): 81-87. Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5215149/.
\128\ Alexander GC, et al. Barriers to Patient-physician
Communication About Out-of-pocket Costs, J Gen Intern Med. 2004
August; 19(8): 856-860. Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1492500/.
\129\ Goetz C, et al. The effect of charge display on cost of
care and physician practice behaviors: a systematic review, Journal
Gen Intern Med. 2015 Jun; 30(6):835-42. Available at: https://www.ncbi.nlm.nih.gov/pubmed/25691240.
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Employers can also benefit from transparency in provider pricing
and disclosure of payer-specific negotiated charges in particular. Some
employers are seeking and implementing innovative ways using
transparency in healthcare pricing to reduce healthcare costs and are
using healthcare pricing information effectively to do so.\130\ Some
employers, particularly self-insured employers, are using knowledge of
payer-specific negotiated charges in their discussions with providers
and health plans to drive referrals to high value care settings which
is driving down the cost of healthcare for both employer and employee.
For example, self-insured employers in Indiana are effectively using
knowledge of hospital charges to improve contracting with
providers.131 132 Additionally, based on our review of
economics research, we believe the healthcare market will become more
effective and efficient as a result of transparency in healthcare
pricing. For example, one study found that when the State of California
adopted a reference pricing model for their employees, usage of lower
priced facilities increased by 9 to 14 percent and facilities in
California responded by reducing their prices by 17 to 21 percent.\133\
The California and the New Hampshire initiatives (described earlier)
were both demonstrated to produce ``spillover'' effects, meaning that
changing market prices as a result of consumer shopping benefited even
those who were not actively shopping.\134\
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\130\ Woods L, et al. Employers are fixing health care. Harvard
Business Review. March 2019. Available at: https://hbr.org/cover-story/2019/03/how-employers-are-fixing-health-care.
\131\ Sachdev G. Using RAND 2.0 Hospital Pricing Report to
Achieve High Value. Employers' Forum of Indiana. July 31, 2019.
Available at: https://employersforumindiana.org/media/2019/07/Using-RAND-2.0-Hospital-Prices-to-Achieve-Value-presented-by-Gloria-Sachdev-7-31-19.pdf.
\132\ Sachdev G, et al. Self-Insured Employers Are Using Price
Transparency To Improve Contracting With Health Care Providers: The
Indiana Experience. Health Affairs. October 7, 2019. Available at:
https://www.healthaffairs.org/do/10.1377/hblog20191003.778513/full/
\133\ Robinson JC and Brown TT. Increases In Consumer Cost
Sharing Redirect Patient Volumes And Reduce Hospital Prices For
Orthopedic Surgery. Health Affairs. August 2013; 32(8). Available
at: https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2013.0188.
\134\ Blase B. Transparent Prices Will Help Consumers and
Employers Reduce Health Spending. Galen Institute. September 27,
2019. Available at: https://galen.org/assets/Blase_Transparency_Paper_092719.pdf.
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In summary, we concluded that transparency in pricing is necessary
and can be effective to help bring down the cost of healthcare
services, reduce price dispersion, and benefit consumers of healthcare
services, including patients and employers. In light of this, we do not
believe additional testing needs to be done prior to finalizing this
rule. We further note that the federal government has laws and
processes to investigate and act when entities engage in collusive or
other anticompetitive practices.
Comment: Many commenters indicated that it would be a challenge and
burden for hospitals to access and display their payer-specific
negotiated charges. For example, many commenters asserted that such
information is either ``non-existent'' (specifically that it does not
exist in hospital accounting systems) or is not available to be
reported by hospitals without significant manual effort, while several
others indicated that consumers should pursue information on out-of-
pocket obligations from insurers as opposed to hospitals. Several
others indicated that the data is not available electronically and
would require manual entry or require hospitals to purchase
prohibitively expensive software. Several commenters stated that
charges on the chargemaster are not always associated with negotiated
charges due to billing complexities such as per diem rates and bundled
payment arrangements and that the CY 2020 OPPS/ASC proposed rule relied
on the mistaken assumption that payer-specific rates can be expressed
in a static matrix. One commenter explained that hospital managed care
agreements do not typically set forth simple dollar amounts for each
service; instead, they specify payment methodologies, which are in
essence negotiated payment algorithms rather than static matrices. The
commenter also noted that the appropriate payment amount for a
particular service package cannot be calculated until the delivery of
care, and the assignment of any dollar amount prior to the delivery of
care would risk overstating or understating the applicable payment
amount for that case.
Response: As noted above, hospital payer-specific negotiated
charges or rates can be found within the in-network contracts that
hospitals have signed with third party payers. Such contracts often
include rates sheets that contain a list of hospital items and services
(including service packages) and the corresponding negotiated rates. If
the rate sheets are not in electronic form, we suggest that the
hospital request an electronic copy of their contract and corresponding
rate sheet from the third party payer. Additionally, we note that we
are concurrently issuing a proposed rule entitled Transparency in
Coverage (file code CMS-9915-P) that would require most issuers of
individual and group market health insurance and group health plans to
make public, in an electronic machine-readable format, negotiated rate
and unique out-of-network allowed amount information that hospitals,
including
[[Page 65551]]
CAHs, and others could use. Access to these data may be a benefit to
less resourced hospitals which indicated that payers may take advantage
of small hospitals that don't diligently maintain their contracts or
contracted rates.
We agree that payer-specific negotiated charges are not found in a
hospital's chargemaster because such charges are typically found in
other parts of the hospital's billing and accounting systems or in
their payer contracts. We also agree that such charges are often
negotiated for service packages rather than for individualized items
and services as listed in the hospital chargemaster, and that
negotiated contracts often include methodologies that would apply to
payment rates, often leading to payments to hospitals that are
different than the base rates negotiated with insurers for hospital
items and services. However, we do not agree that these issues
represent barriers to making public payer-specific negotiated charges
because as clarified above, the negotiated rates we are requiring to be
made public are the base rates, not the payment received. Additionally,
we offer suggestions for developing the comprehensive machine-readable
file in section II.E of this final rule and the display of payer-
specific charges for the set of shoppable services in a low-cost
consumer-friendly format in section II.F of this final rule.
Finally, we recognize that some hospitals may have negotiated
charges with many payers representing hundreds of plans. We believe the
burden to hospitals for making public all payer-specific negotiated
charges is outweighed by the public's need for access to such
information. However, after consideration of the comments received, we
are responding to concerns about burden by finalizing a policy to delay
the effective date of these final rules to January 1, 2021 (see section
II.G.3 of this final rule for more details). We believe that by
extending this final rule effective date, hospitals will have
sufficient time to collect and display the standard charge information
as required under this rule. Additionally, we are finalizing a policy
to regard hospitals that offer internet-based price estimator tools as
having met the requirements for making public their consumer-friendly
list of shoppable services (section II.F.5 of this final rule) which
will relieve some burden for hospitals that are already displaying
consumer-friendly charge information.
Comment: Several commenters specifically noted that although the CY
2020 OPPS/ASC proposed rule exempts the publication of Medicaid FFS
arrangements, payer-specific negotiated charges would include Medicaid
managed care organizations (MCOs) and the information published would
have little value to Medicaid beneficiaries since their out-of-pocket
obligations are limited by federal and state cost-sharing requirements
and the information may intimidate families from seeking necessary care
due to the confusion caused by the charges.
Response: Under this final rule, hospitals would be required to
make public their standard charges for payer-specific negotiated
charges. As noted by commenters and as we explained in the proposed
rule, such payer-specific negotiated charges would not include non-
negotiated payment rates (such as those payment rates for FFS Medicare
or Medicaid). However, hospitals will be required to make public the
payer-specific negotiated charges that they have negotiated with third
party payers, including charges negotiated by third party payer managed
care plans such as Medicare Advantage plans, Medicaid MCOs, and other
Medicaid managed care plans. Based on research cited previously, as
well as patient and patient advocate comments, we disagree that the
display of payer-specific negotiated rates will have little value to
individuals enrolled in Medicaid MCOs or other Medicaid managed care
plans in which third parties negotiate charges with hospitals. We
believe that all consumers, including, for example, beneficiaries
enrolled in Medicaid MCOs, should have the advantage of a full line of
sight into their healthcare pricing. We are therefore finalizing as
proposed our definition of payer-specific negotiated charges which
would include Medicare and Medicaid plans managed by third party payers
who negotiate charges with providers.
Final Action: We are finalizing as proposed a definition of payer-
specific negotiated charge as a type of standard charge at new 45 CFR
180.20 to mean the charge that a hospital has negotiated with a third
party payer for an item or service. We are also finalizing as proposed
a definition of ``third party payer'' for purposes of section 2718(e)
of the PHS Act as an entity that, by statute, contract, or agreement,
is legally responsible for payment of a claim for a healthcare item or
service.
4. Alternative Definitions for Types of Standard Charges That We
Considered
In addition to the two types of standard charges (gross charges and
payer-specific negotiated charges) that we proposed and are finalizing
for purposes of section 2718(e) of the PHS Act, we sought public
comment on whether we should instead, or additionally, require the
disclosure of other types of charges as standard charges. We considered
several alternatives for types of standard charges related to groups of
individuals with third party payer coverage and also for types of
standard charges that could be useful to groups of individuals who are
self-pay.
a. Volume-Driven Negotiated Charge
As a variant of the definition of the ``payer-specific negotiated
charge,'' we considered defining a type of ``standard charge'' based on
the volume of patients to whom the hospital applies the standard
charge. Specifically, we considered defining a type of ``standard
charge'' as the ``modal negotiated charge.'' The mode of a distribution
represents the number that occurs most frequently in a set of numbers.
Here, we considered defining ``modal negotiated charge'' as the most
frequently charged rate across all rates the hospital has negotiated
with third party payers for an item or service. We indicated that we
believed that this definition could provide a useful and reasonable
proxy for payer-specific negotiated charges and decrease burden for the
amount of data the hospital would have to make public and display in a
consumer-friendly format. We sought public comment on whether the modal
negotiated charge would be as informative to consumers with insurance
and whether it should be required as an alternative or in addition to
the payer-specific negotiated charges.
Comment: A few commenters supported volume-driven negotiated
charges, such as the modal-negotiated charge, or a similar variation of
such a charge based on volume, as a type of standard charge, stating
that hospitals should publish chargemaster and negotiated amounts based
on the billing volume. One commenter noted that developing and
communicating a volume-driven average charge could be challenging,
given that hospitals and insurers often negotiate charges for non-
standardized bundled services and service packages. A few commenters
disagreed with further defining negotiated charges based on volume,
stating that they believe the information would be both incorrect and
confusing to consumers and onerous for hospitals required to report the
information. Additionally, one commenter strongly objected to use of a
volume-driven charge, stating that they believe such an alternative
standard charge would perpetuate the idea that insurers have been able
to drive prices lower based on volume-driven negotiations.
[[Page 65552]]
Response: After consideration of the comments received, we agree
with the commenters who stated that volume-driven charge information
could be confusing to consumers, and we believe it is less useful than
the types of standard charges we are finalizing. Because the modal
negotiated rate, or similar volume-driven variations, would combine
rates the hospital has negotiated with all third party payers for all
items or services and weigh that number based on the volume of patients
(a number unknown to the public), we agree it could be misleading for
consumers who are trying to combine the volume-driven rate with their
specific benefit information to determine their potential out-of-pocket
obligations in advance, as it does not represent what their specific
payer has negotiated. This type of standard charge may have utility in
certain circumstances, however, after consideration of the public
comments we received, we are not defining ``modal negotiated charges''
as a type of volume-driven ``standard charge'' at this time.
b. All Allowed Charges
We also considered defining a type of ``standard charge'' as the
charges for all items and services for all third party payer plans and
products, including charges that are non-negotiated (such as FFS
Medicare rates), which we would call ``all allowed charges.'' As we
explained in the CY 2020 OPPS/ASC proposed rule, this option would have
required hospitals to provide the broadest set of charge information
for all individuals with health insurance coverage because it would
have the advantage of including all identified third party payer
charges (including third party payer rates that are not negotiated).
Additionally, every consumer would have access to charge information
specific to his or her insurance plan. We considered, but did not
propose, this alternative because we stated we believed consumers with
non-negotiated healthcare coverage already have adequate and
centralized access to non-negotiated charges for hospital items and
services and are largely protected from out-of-pocket costs which may
make them less sensitive to price shopping. However, we sought public
comment on whether increasing the data hospital would be required to
make public would pose a burden, particularly for smaller or rural
hospitals that may not keep such data electronically available.
Comment: We received a few comments related to all allowed charges.
One commenter supported the inclusion of the ``Medicare allowable''
charge in particular as a type of standard charge in order to provide a
meaningful benchmark using existing data. One commenter objected to
including all allowed charges as a type of standard charges due to
their belief that consumers whose insurance plans are non-negotiated
already have access to the information that would be required.
Response: We agree with commenters who indicated there is no need
to include all allowed charges because the allowed amounts of plans
that are not negotiated (for example, FFS Medicare and Medicaid) are
already publicly disclosed. Moreover, such publicly disclosed allowed
amounts make a benchmark available to those who wish to use it; nothing
in this final rule would prevent a hospital or third party payer from
displaying a Medicare FFS rate as a benchmark. However, we believe it
would be redundant to require hospitals to re-disclose already public
rates and create an unnecessary burden. After consideration of the
public comments we received, we are not finalizing a requirement for
hospitals to re-disclose ``all allowed charges'' at this time.
c. Definition of Discounted Cash Price as a Type of ``Standard Charge''
As discussed in the CY 2020 OPPS/ASC proposed rule (84 FR 39577
through 39579), hospital gross charge information may be most directly
relevant to a group of self-pay consumers who do not have third party
payer insurance coverage or who seek care out-of-network. Such
consumers would not need information in addition to hospital gross
charges in order to determine their potential out-of-pocket cost
obligations because the gross charge would represent the totality of
their out-of-pocket cost estimate. However, stakeholders have indicated
that hospitals often offer discounts off the gross charge or make other
concessions to individuals who are self-pay. Thus, we considered
defining a type of ``standard charge'' as the ``discounted cash
price,'' defined as the price the hospital would charge individuals who
pay cash (or cash equivalent) for an individual item or service or
service package. We considered this alternative definition because
there are many consumers who pay in cash (or cash equivalent) for
hospital items and services.
As we explained in the CY 2020 OPPS/ASC proposed rule, the first
subgroup of self-pay consumers that we believed could benefit from
knowing the discount cash price would be those who are uninsured. The
number of uninsured individuals in the United States rose to 27.4
million in 2017.\135\ These individuals' need for hospital price
transparency differs from patients with insurance who generally are
otherwise shielded from the full cost of hospitalization and hospital
items and services. Uninsured individuals do not have the advantage of
having access to a discounted group rate that has been negotiated by a
third party payer. Therefore, individuals without insurance may face
higher out-of-pocket costs for healthcare services.
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\135\ Kaiser Family Foundation. The Number of Uninsured People
Rose in 2017, Reversing Some of the Coverage Gains Under the
Affordable Care Act. December 2018. Available at: https://www.kff.org/uninsured/press-release/the-number-of-uninsured-people-rose-in-2017-reversing-some-of-the-coverage-gains-under-the-affordable-care-act/.
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The second subgroup of self-pay consumers we indicated may benefit
from knowing the discounted cash price are those who may have some
healthcare coverage but who still bear the full cost of at least
certain healthcare services. For example, these may be individuals who:
Have insurance but who go out of network; have exceeded their insurance
coverage limits; have high deductible plans but have not yet met their
deductible; prefer to pay through a health savings account or similar
vehicle; or seek non-covered and/or elective items or services. We
noted that many hospitals offer discounts to these groups of
individuals, either as a flat percentage discount off the chargemaster
rate or at the insurer's negotiated rate, while some hospitals offer
consumers a cash discount if they pay in full on the day of the
service.\136\ Other hospitals have developed and offer standardized
cash prices for service packages for certain segments of the population
that traditionally pay in cash for healthcare services.\137\ We
recognized that currently, it is difficult for most consumers to
determine in advance of receiving a service what discount(s) the
hospital may offer an individual because cash and financial need
discounts and policies can vary widely among hospitals.
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\136\ Beck M. How to Cut Your Health-Care Bill: Pay Cash. The
Wall Street Journal. February 15, 2016. Available at: https://www.wsj.com/articles/how-to-cut-your-health-care-bill-pay-cash-1455592277.
\137\ Hempstead K and White C. Plain Talk about Price
Transparency. Health Affairs. March 25, 2019. Available at: https://www.healthaffairs.org/do/10.1377/hblog20190319.99794/full/.
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We therefore specifically considered an option that would require
hospitals to make public the cash discount that would apply for
shoppable services and service packages that would include all
ancillary services, similar to our proposals for consumer-friendly
display
[[Page 65553]]
of payer-specific negotiated charges (84 FR 39585 through 39591). In
this case, the discounted cash price would represent the amount a
hospital would accept as payment in full for the shoppable service
package from an individual. Such charges could be lower than the rate
the hospital negotiates with third party payers because it would not
require many of the administrative functions that exist for hospitals
to seek payment from third party payers (for example, prior
authorization and billing functions). However, we recognized that many
hospitals have not determined or maintain, a standard cash discount
that would apply uniformly to all self-pay consumers for each of the
items and services provided by the hospital or for service packages,
unlike they do for negotiated charges. We sought comment on this
option, specifically, how many shoppable services for which it would be
reasonable to require hospitals to develop and maintain, and make
public a discounted cash price.
In addition, in the CY 2020 OPPS/ASC proposed rule we noted that
many hospitals offer cash discounts on a sliding scale according to
financial need. In such instances, we acknowledged that it may be
difficult for a hospital to establish and make public a single
standardized cash rate for such groups of consumers. For this reason,
we also considered a different definition that would take sliding scale
cash discounts into account by defining a standard charge as the median
cash price. The median cash price would be the midpoint of all cash
discounts offered to consumers, including prices for self-pay patients
and those qualifying for financial assistance. We indicated that for
uninsured patients who may qualify for financial assistance, the value
of making a median cash price public could raise awareness of their
available options, including the ability to apply for financial
assistance, however, we also stated that we believed such a rate would
be less useful to the public than a single standard cash price that the
hospital would accept as payment in full as discussed above.
Comment: Many commenters, including individual consumers, patient
advocates, clinicians, and insurers, strongly supported including a
definition of standard charges to reflect the discounted cash price
that would be offered to a self-pay consumer because they believe this
information would be beneficial and relevant to consumers, including
consumers with third party payer coverage. A few commenters suggested
that CMS redefine this type of ``standard charge'' as hospital walk-in
rates, meaning the rates a hospital will typically charge to a patient
without insurance, and one commenter suggested that hospitals post the
``Amounts Generally Billed,'' an IRS-defined term for the maximum
amount individuals under a hospital's financial assistance plan would
pay.
By contrast, several commenters, mostly hospital representatives,
disagreed with defining standard charges as the discounted cash price
due to their belief that the cash price is often reflective of after-
the-fact charity discounts due to the patient's inability to pay or as
a result of lack of insurance. One commenter disagreed with defining a
cash rate as a type of standard charge because they believe CMS cannot
require or force hospitals to have discounted cash prices, and
therefore cannot require their disclosure.
Response: We thank the commenters for their strong support and
their input on the utility of the discounted cash price for all
consumers. We considered this alternative definition because there are
many consumers who may wish to pay in cash (or cash equivalent) for
hospital items and services, whether insured or uninsured, for a
variety of reasons. We agree with commenters who indicated that the
discounted cash price is important for many self-pay consumers. Many
hospitals have already developed and offer standardized cash prices for
service packages for certain segments of the population who
traditionally pay in cash for healthcare services and who pay cash (or
cash equivalent) in advance of receiving a healthcare service.\138\
Such prices and services are typically offered as a consumer-friendly
packaged service that negates the need for hospitals to expend
administrative time and resources billing third party payers and
resubmitting charges when payment is denied.\139\ Moreover, we agree
with commenters who indicated that up-front knowledge of pricing can
increase patient satisfaction and reduce bad debt and could help
mitigate ``surprise billing.''
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\138\ Hempstead K and White C. Plain Talk about Price
Transparency. Health Affairs. March 25, 2019. Available at: https://www.healthaffairs.org/do/10.1377/hblog20190319.99794/full/.
\139\ Bai G, et al. Providing Useful Hospital Pricing
Information To Patients: Lessons From Voluntary Price Disclosure.
Health Affairs. April 2019. Available at: https://www.healthaffairs.org/do/10.1377/hblog20190416.853636/full/.
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As discussed in the CY 2020 OPPS/ASC proposed rule, we made a
distinction between the discounted cash price (the price a hospital
agrees to accept from a self-pay consumer as payment in full) versus a
median cash price that would take into account any and all cash prices
accepted by hospitals, including cash payments accepted following
sliding scale discounts as a result of charity care. We clarify that
the ``discounted cash price'' would reflect the discounted rate
published by the hospital, unrelated to any charity care or bill
forgiveness that a hospital may choose or be required to apply to a
particular individual's bill. Thus, the discounted cash price is a
standard charge offered by the hospital to a group of individuals who
are self-pay. The discounted cash price may be generally analogous to
the ``walk-in'' rate referred to by commenters, however, we do not want
to take a position as to whether it is the same as the cash discount
price because the cash discounted price would apply to all self-pay
individuals, regardless of insurance status.
We are therefore finalizing a definition of discounted cash price
as a type of standard charge. We note that we agree with commenters who
indicate that some hospitals may not have determined a discounted cash
price for self-pay consumers. For some hospitals, the cash price is the
undiscounted gross charges as reflected in the hospital chargemaster as
previously discussed. In that case, under our definition of discounted
cash price, the hospital's discounted cash price would simply be its
gross charges as reflected in the chargemaster.
Final Action: We are finalizing the definition of discounted cash
price that we discussed in the CY 2020 OPPS/ASC proposed rule.
Specifically, we are finalizing a definition of cash discounted price
to mean the charge that applies to an individual who pays cash (or cash
equivalent) for a hospital item or service. Hospitals that do not offer
self-pay discounts may display the hospital's undiscounted gross
charges as found in the hospital chargemaster. We are finalizing this
definition at 45 CFR 180.20.
d. Definitions of ``De-Identified Minimum Negotiated Charge'' and ``De-
Identified Maximum Negotiated Charge'' as Two Types of Standard Charges
In the CY 2020 OPPS/ASC proposed rule, we also considered defining
a type of ``standard charge'' as the de-identified minimum, median, and
maximum negotiated charge. Under this definition, the hospital would be
required to make public the lowest, median, and highest charges of the
distribution of all negotiated charges across all third party payer
plans and products. We indicated that this
[[Page 65554]]
information could provide healthcare consumers with an estimate of what
a hospital may charge, because it conveys the range of charges
negotiated by all third party payers. We also indicated that as a
replacement for the payer-specific negotiated charge, this definition
had the advantage of lowering reporting burden and could relieve some
concerns by stakeholders related to the potential for increased
healthcare costs in some markets as a result of the disclosure of third
party payer negotiated charges. At the time, we did not propose to
define the de-identified minimum, median, and maximum negotiated
charges as types of standard charges because we believed the payer-
specific negotiated charges would provide much more useful and specific
information for consumers. However, we sought comment on this issue as
an alternative type of standard charge.
Comment: Many commenters supported a definition of standard charges
to require hospitals to post a de-identified range of negotiated rates,
including the minimum, median, and maximum negotiated rates or all-
inclusive range, quartiles or a median range (that is, the 25th and
75th percentile or the 25th through the 75th percentiles), another
specific percentile within the range of negotiated charges, ``usual and
customary'' (which are based on a regional percentile), or average
rate. Commenters supported these alternatives in addition to payer-
specific negotiated charges because they believe de-identified
negotiated rate information would be relevant and beneficial to
consumers. Commenters noted that many consumer-facing price
transparency tools display the minimum and maximum negotiated charges
for healthcare services already, or display regional average charges.
One commenter stated that providing such alternative charges in
addition to providing the payer-specific negotiated charges can be
helpful as it provides a ``meaningful anchor'' for the patient when
they are comparing options. Other commenters echoed this sentiment,
indicating that such charges, in addition to payer-specific negotiated
charges, are useful for consumers such as patients and employers.
Several commenters indicated they believed these types of standard
charges could provide a suitable substitute for the payer-specific
negotiated charges. A few commenters indicated that the substitution
could protect the identification of individual payers in smaller
markets which they said would reduce any legal or market risk that
could be associated with compelling the release of negotiated rates,
although one commenter expressed concern that display of a de-
identified maximum may have an adverse effect on the ability to
negotiate lower rates. By contrast, patient advocates and consumers
strongly opposed the substitution of any type of de-identified
negotiated charge, stating such charges would provide a far less
accurate indicator of a patient's potential financial obligations
compared to knowledge of the consumer's own payer-specific negotiated
charges. For example, one commenter said that substitution for payer-
specific negotiated charges for a more general or informational charge
may leave patients feeling misled and delays the country from moving
closer to a patient-focused system. Another indicated that limiting
standard charge information to a median or range would reduce utility
of the information and serve to frustrate innovators who seek to
provide consumers with an unbiased view of provider cost and quality.
Several commenters specifically indicated that a range (for
example, the minimum and maximum negotiated charges) of de-identified
charges would be useful to the public because it would make it easier
for consumers to quickly understand the range of prices across all
insurance plans that might apply. One commenter noted that requiring
hospitals to make public a range instead of all payer-specific
negotiated charges would not likely reduce burden.
Additionally, a few commenters recommended the use of regional or
market averages or median rates, or the ``usual and customary'' which
stated that displaying a market (not hospital) median, or the ``usual
and customary'' which is defined by the National Council of Insurance
Legislators (NCIL) as the 80th percentile of physician charges in a
geographic region based on an independent unbiased benchmarking charge
database. One commenter noted that such rates would serve as a basic
benchmark for vendors and prevent the prices paid by insurers from
being known.
A few commenters, however, disagreed with defining a standard
charge based on the hospital's minimum, median, and maximum negotiated
rate (or a variation of these) due to their belief that this data would
be of limited value or not be beneficial to consumers and may cause
confusion. One commenter specifically requested that the median cash
price not be finalized as a type of standard charge.
Response: We thank commenters for their support and innovative
suggestions on variations of the potential definition of a type of
``standard charge'' as the de-identified minimum, median, and maximum
negotiated charge. We agree with commenters that information related to
several types of de-identified negotiated rates could be useful and
beneficial to consumers in conjunction with payer-specific negotiated
charges, together as a range, or as separate types of standard charges.
First, we agree with commenters who suggested that the de-
identified minimum negotiated charge and the de-identified maximum
negotiated charge could each provide a benchmark for determining the
value of a hospital item or service for referring providers or
employers. For example, for a consumer with insurance who is obligated
to pay a percentage of the negotiated charge, knowing the maximum would
be more helpful and informative than not having any reference point at
all and would relieve consumers of the fear and uncertainty due to the
lack of knowledge. Disclosure of the minimum de-identified negotiated
charge by itself could also provide a benchmark that could have an
impact on market forces, as some commenters suggested. Therefore, we
believe that each value, independent of the other, could be helpful in
providing some standard hospital charge information to consumers.
We further agree with commenters who asserted that knowing both the
minimum and the maximum (that is, the range) of negotiated rates could
benefit consumers. As noted by commenters, many consumer facing pricing
tools make use of ranges in their displays. For example, consumers
without third party payer coverage could use the range to negotiate a
charge with the hospital that is more reasonable than the gross charges
a hospital might otherwise bill them. The range would also be useful
for consumers with insurance, for example, someone obligated to pay a
percentage of the negotiated rate would be able to determine both their
minimum and maximum financial obligation for an item or service to
compare across hospital settings.
Finally, however, we agree with commenters who indicated that the
most beneficial hospital standard charge information for consumers
(including patients and employers) would include requiring disclosure
of payer-specific negotiated charges along with disclosure of the de-
identified minimum negotiated charges and de-identified maximum
negotiated charges. We agree with commenters who indicated that this
set of information, taken together, can provide consumers with an even
more complete picture of hospital
[[Page 65555]]
standard charges and drive value. For example, by knowing one's payer-
specific negotiated charges in addition to the minimum and maximum
negotiated charges for a hospital item or service, consumers with third
party payer coverage could determine whether their insurer has
negotiated well on their behalf by assessing where their payer-specific
negotiated charge falls along the range. Such information would serve
to promote value choices in obtaining a healthcare services, and may
also promote value choices in obtaining a healthcare insurance product.
Additionally, we agree with commenters that presenting such information
aligns with current consumer-friendly tools and displays and supports
innovation.
We are therefore finalizing with modification to define a fourth
type of standard charge as the ``de-identified minimum negotiated
charge'' to mean the lowest charge that a hospital has negotiated with
all third party payers for an item or service. We are also finalizing
with modification to define a fifth type of standard charge as the
``de-identified maximum negotiated charge'' to mean the highest charge
that a hospital has negotiated with all third party payers for an item
or service. To identify the minimum negotiated charge and the maximum
negotiated charge, the hospital considers the distribution of all
negotiated charges across all third party payer plans and products for
each hospital item or service. We note that this distribution would not
include non-negotiated charges with third party payers. The hospital
must then select and display the lowest and highest de-identified
negotiated charge for each item or service the hospital provides.
We appreciate the many additional innovative suggestions for how a
range of de-identified negotiated charges could be displayed by a
hospital. We note that we have interpreted section 2718(e) of the PHS
Act to require each hospital to disclose its own standard charges, and
not the charges that are standard in a particular region or market as
some commenters suggested. However, if commenters believe such data to
be valuable, nothing would prevent hospitals or other users of the
information to include such ranges when presenting it to consumers.
Final Action: We are therefore finalizing with modification to
define a fourth and fifth type of standard charge as the ``de-
identified minimum negotiated charge'' to mean the lowest charge that a
hospital has negotiated with all third party payers for an item or
service. We are also finalizing with modification to define a fifth
type of standard charge as the ``de-identified maximum negotiated
charge'' to mean the highest charge that a hospital has negotiated with
all third party payers for an item or service. In response to comments
and in the interest of minimizing hospital burden, we are not
finalizing the inclusion of the median negotiated charge as a type of
standard charge. We are finalizing these definitions at 45 CFR 180.20.
As discussed above, we believe these additional types of standard
charges could be useful and beneficial to consumers.
We intend for the de-identified minimum negotiated charge and de-
identified maximum negotiated charge to be severable, one from the
other, and from payer-specific negotiated charge, such that each of
these three types of standard charges could stand-alone as a type of
standard charge.
We believe it is reasonable to consider the de-identified minimum
negotiated charge and the de-identified maximum negotiated charge as
severable from payer-specific negotiated charge because these values
represent the lowest or highest charge (along a distribution) that a
hospital has negotiated across all third party payers for an item or
service, and do not identify the third party payer with which these
rates are negotiated. We also believe these types of standard charges
are severable from each other because the de-identified minimum
negotiated charge and the de-identified maximum negotiated charge are
separate values in the distribution.
Further, we believe it is feasible for hospitals to separately
identify each type of ``standard charge'', which according to the
definition we are finalizing in 45 CFR 180.20 includes: Gross charge,
payer-specific negotiated charge, de-identified minimum negotiated
charge, de-identified maximum negotiated charge, and discounted cash
price. As discussed elsewhere in section II.D of this final rule, we
believe each type of standard charge is a reasonable, and necessary
aspect of hospital price transparency, to ensure consumers have as
complete information as possible to inform their healthcare decision-
making. We therefore believe that all five charges (gross charge,
payer-specific negotiated charge, de-identified minimum negotiated,
charge, de-identified maximum negotiated charge, and discounted cash
price) provide value to consumers for the reasons discussed in this
section. Accordingly, we intended for all five definitions to be
severable, such that if a court were to invalidate the inclusion of an
individual definition, the remaining definitions would remain defined
as types of standard charges.
We believe, when made public in combination (according to the
requirements we are finalizing), these types of standard charges will
be most effective in achieving meaningful transparency in prices of
hospital items and services. We also recognize that each type of
standard charge alone, if made public nationwide, could also further
hospital price transparency in the United States.
E. Requirements for Public Disclosure of All Hospital Standard Charges
for All Items and Services in a Comprehensive Machine-Readable File
1. Overview
Section 2718(e) of the PHS Act requires hospitals to make their
standard charges public in accordance with guidelines developed by the
Secretary. Therefore, we proposed that hospitals make public their
standard charges in two ways: (1) A comprehensive machine-readable file
that makes public all standard charge information for all hospital
items and services (84 FR 39581 through 39585), and (2) a consumer-
friendly display of common ``shoppable'' services derived from the
machine-readable file (84 FR 39585 through 39591). In the CY 2020 OPPS/
ASC proposed rule, we explained our belief that these two different
methods of making hospital standard charges public are necessary to
ensure that such data is available to consumers where and when it is
needed (for example, via integration into price transparency tools,
electronic health records (EHRs), and consumer apps), and also directly
available and useful to consumers that search for hospital-specific
charge information without use of a developed price transparency tool.
For purposes of displaying all standard charges for all items and
services in a comprehensive machine-readable file, we proposed
requirements for the file format, the content of the data in the file,
and how to ensure the public could easily access and find the file. We
agree with commenters who indicate that the machine-readable file would
contain a large amount of data, however, we believe that a single data
file would be highly useable by the public because all the data would
be in one place. By ensuring accessibility to all hospital standard
charge data for all items and services, these data will be available
for use by the public in price transparency tools, to be integrated
into EHRs for purposes of clinical decision-making and referrals, or to
be used by
[[Page 65556]]
researchers and policy officials to help bring more value to
healthcare.
Comment: A few commenters (particularly hospitals) noted concerns
that the chargemaster data they already make public online appears to
be accessed less by consumers and more by insurance brokers,
competitors, and reporters. Additionally, many commenters believed that
the proposed data to be made public would be too complex, voluminous,
and time consuming for consumers to navigate and understand.
Specifically, commenters expressed concern that: The data files would
be comprised of thousands of lines of data that consumers would have to
sift through; the volume of files could crash personal computers; the
information could add to confusion for consumer who may not understand
a chargemaster, coding, or the differences between ancillary services,
gross charges, and payer-specific negotiated charges; providing large
and complex datasets (even if standardized) would not achieve CMS's
stated goal of transparency; and consumers may not be able to derive
actual costs from standard charge information. Some commenters
indicated that the machine-readable file should be made consumer-
friendly and searchable.
Response: We believe that requiring hospitals to make public all
standard charges for all items and services they provide is consistent
with the mandate of section 2718(e) of the PHS Act. We agree with
commenters who indicate that the machine-readable file would contain a
large amount of data, however, we believe that a single data file would
be highly useable by the public because all the data would be in one
place. By ensuring accessibility to all hospital standard charge data
for all items and services, these data will be available for use by the
public in price transparency tools, to be integrated into EHRs for
purposes of clinical decision-making and referrals, or to be used by
researchers and policy officials to help bring more value to
healthcare. In order to ensure hospital standard charge data is more
directly useful to the average patient, we proposed and are finalizing
an additional requirement for hospitals to make a public standard
charges for a set of shoppable services in a consumer-friendly manner
(see section II.F of this final rule). We believe the shorter data set
presented in a consumer-friendly manner is more likely to be directly
useful to consumers who seek to compare costs for common shoppable
services hospital-by-hospital.
We note that many machine-readable data sets that are made
available for public use can be quite large. For example, Medicare
Provider Utilization and Payment Data files include information for
common inpatient and outpatient services, all physician and other
supplier procedures and services, and all Part D prescriptions.\140\
These files are freely available to the public and contain hundreds of
thousands of data points in .xlsx and .csv format. We therefore believe
it is possible for hospitals to make public all their standard charges
for all the items and services they provided in a similar manner.
Additionally, we have not heard that large Medicare data files of data
derived from claims causes any confusion for healthcare consumers, and
healthcare consumers do not typically use the information in the data
files directly. Instead, voluminous Medicare data is used by a variety
of stakeholders, some of whom take the information and present it to
users in a consumer-friendly manner.\141\ Similarly, we do not believe
that making public a comprehensive machine-readable file with all
standard charges for all items and services would create patient
confusion. Finally, we note that by definition, machine-readable files
are searchable.
---------------------------------------------------------------------------
\140\ CMS.gov website, Medicare Provider Utilization and Payment
Data. Available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/.
\141\ Wei S, et al. Surgeon Scorecard. ProPublica. Updated July
15, 2015. Available at: https://projects.propublica.org/surgeons/.
---------------------------------------------------------------------------
2. Standardized Data Elements for the Comprehensive Machine-Readable
File
In the CY 2020 OPPS/ASC proposed rule (84 FR 39582 through 39583),
we proposed that hospitals disclose their list of standard charges for
all items and services online in a single digital file that is machine-
readable. Without specifying a minimum reporting standard for the
machine-readable file, the standard charges data made publicly
available by each hospital could vary, making it difficult for the
users of the data to compare items and services. For example, some
hospitals currently post a single column of gross charges without any
associations to CPT or HCPCS codes or other identifying descriptions of
the items and services to which the gross charge applies. A similar
example would be a hospital that displays a list of gross charges that
is correlated with a list of item numbers that are meaningful to the
hospital billing personnel, but not understandable to the general
public. By contrast, some hospitals list their gross charges along with
a brief description of the item or service to which each gross charge
applies and the corresponding standardized identifying codes (typically
HCPCS or CPT codes).
We expressed our concern that the lack of uniformity leaves the
public unable to meaningfully use, understand, and compare standard
charge information across hospitals. Therefore, for the comprehensive
machine-readable file of all standard charges for all items and
services, we made proposals to ensure uniformity of the data made
publicly available by each hospital. To inform these proposals, we
considered the data elements that are typically included in a
hospital's billing system and which of those elements would result in
hospital standard charge data being most transparent, identifiable,
meaningful, and comparable. Specifically, we proposed that the list of
hospital items and services include the following corresponding
information, as applicable, for each item and service:
Description of each item or service (including both
individual items and services and service packages).
The corresponding gross charge that applies to each
individual item or service when provided in, as applicable, the
hospital inpatient setting and outpatient department setting.
The corresponding payer-specific negotiated charge that
applies to each item or service (including charges for both individual
items and services as well as service packages) when provided in, as
applicable, the hospital inpatient setting and outpatient department
setting. Each list of payer-specific charges must be clearly associated
with the name of the third party payer.
Any code used by the hospital for purposes of accounting
or billing for the item or service, including, but not limited to, the
CPT code, HCPCS code, DRG, NDC, or other common payer identifier.
Revenue code, as applicable.
We proposed to codify these requirements at proposed new 45 CFR
180.50(b). We stated that we believe that these elements would be
necessary to ensure that the public would be able to compare standard
charges for the same or similar items and services provided by
different hospitals.
We proposed that hospitals associate each standard charge with a
CPT or HCPCS code, DRG, NDC, or other common payer identifier, as
applicable, because hospitals uniformly understand them and commonly
use them for billing items and services (including both individual
items and services and service packages). We also proposed
[[Page 65557]]
that hospitals include item descriptions for each item or service. In
the case of items and services that are associated with common billing
codes (such as HCPCS codes), the hospital could use the code's
associated short text description.
In addition, based on stakeholder feedback suggesting hospital
charge information should include revenue codes to be comparable, we
proposed to require that the hospital include a revenue code where
applicable and appropriate. Hospitals use revenue codes to associate
items and services to various hospital departments. When a hospital
charges differently for the same item or service in a different
department, we proposed that the hospital associate the charge with the
department represented by the revenue code, providing the public some
additional detail about the charges they may expect for hospital
services provided in different hospital departments.
In developing this proposal, we also considered whether the
following data elements, which are commonly included in hospital
billing systems, might be useful to the public:
Numeric designation for hospital department.
General ledger number for accounting purposes.
Long text description.
Other identifying elements.
However, we determined that, for various reasons, these data
elements may not be as useful as the data elements that we proposed to
require hospitals to make public. For example, data elements such as
general ledger numbers are generally relevant to the hospital for
accounting purposes but may not add value for the public, while data
elements such as alternative code sets (such as International
Statistical Classification of Diseases and Related Health Problems,
10th revision (ICD-10) codes) or long text descriptions associated with
CPT codes, while useful, might be difficult to associate with a single
item or service or be otherwise difficult to display in a file that is
intended mainly for further computer processing. Because of this, we
stated that while long text descriptions might benefit healthcare
consumers and be appropriate for the consumer-friendly display of
shoppable services (as discussed in the CY 2020 OPPS/ASC proposed rule,
84 FR 39585 through 39591), we believe they may add unnecessary burden
for hospitals when such descriptions are not readily electronically
available, or when the display of such data is not easily formatted
into a machine-readable file. Therefore, we did not propose to require
these additional elements for the machine-readable data file that
contains a list of all standard charges for all hospital items and
services. We invited public comment on the proposed data elements for
the comprehensive machine-readable file of all standard charges for all
items and services that hospitals would be required to make public. We
also sought public comment on the other data elements that, as we
detail above, we considered but did not propose to require, and on any
other standard charge data elements that CMS should consider requiring
hospitals to make public.
Comment: A few commenters sought clarification on how to make
public charges for various hospital items and services. For example,
one commenter stated that gross charges are not established for several
codes using surgical procedure codes, but rather are listed as unit of
time. Others pointed out that charges for hospitals and physicians may
be maintained separately, with some indicating that employed physician
charges are not included in their hospital chargemaster.
Response: In its comprehensive machine-readable file, the hospital
must include all standard charges for all items and services for which
it has established a charge, which includes time-based gross charges.
For items and services and associated gross charges found in the
hospital chargemaster, the hospital could list, for example, the gross
charge associated with supplies or amount charges per unit of time. An
example of how a hospital could list its time-based gross charges for
various items and services can be viewed in Table 1.
We understand that some hospitals may have several locations
operating under a consolidated hospital license, and each location may
have its own chargemaster. Some hospitals may have a chargemaster for
hospital items and services (for example, supplies, procedures, or room
and board charges) and one for hospital services provided by employed
professionals, although more often all gross charges for all items and
services provided by the hospital (including services of employed
practitioners) are kept in a single hospital chargemaster. Moreover, we
agree with commenters that often the charges for employed practitioners
are not associated with specific CPT/HCPCS codes until after a service
has been provided to a patient. However, the gross charge for the
employed professional would still be present in the chargemaster. The
last several rows of Table 1 illustrates one way a hospital could
incorporate standard charges for professional services into their
comprehensive machine-readable file. Additionally, we note that gross
charges for some supplies, such as gauze pads, found in the hospital
chargemaster may not have a corresponding common billing code.
Therefore, we clarify that that common billing codes as a required data
element be included as applicable.
[[Page 65558]]
Table 1--Sample Display of Gross Charges \142\
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Hospital XYZ Medical Center
---------------------------------
Prices Posted and Effective [month/day/year]
Notes: [insert any clarifying notes]
----------------------------------------------------------------------------------------------------------------
OP/Default IP/ER gross
Description CPT/HCPCS code NDC gross charge charge ERx Charge quantity
--------------------------------------------------------------------------------------------------------------------------------------------------------
HB IV INFUS HYDRATION 31-60 MIN......... 96360......................... .............. $1,000.13 $1,394.45 ..............................
HB IV INFUSION HYDRATION ADDL HR........ 96361......................... .............. 251.13 383.97 ..............................
HB IV INFUSION THERAPY 1ST HR........... 96365......................... .............. 1,061.85 1,681.80 ..............................
HB ROOM CHARGE 1:5 SEMI PRIV............ .............................. .............. .............. 2,534.00 ..............................
HB ROOM CHG 1:5 OB PRIV DELX............ .............................. .............. .............. 2,534.00 ..............................
HB ROOM CHG 1:5 OB DELX 1 ROOM.......... .............................. .............. .............. 2,534.00 ..............................
HB ROOM CHG 1:5 OB DELX 2 ROOMS......... .............................. .............. .............. 2,534.00 ..............................
SURG LEVEL 1 1ST HR 04.................. Z7506......................... .............. .............. 3,497.16 ..............................
SURG LEVEL 1 ADDL 30M 04................ Z7508......................... .............. .............. 1,325.20 ..............................
SURG LEVEL 2 1ST HR 04.................. Z7506......................... .............. .............. 6,994.32 ..............................
PROMETHAZINE 50 MG PR SUPP.............. J8498......................... 00713013212 251.13 383.97 12 Each.
PHENYLEPHRINE HCL 10% OP DROP........... .............................. 17478020605 926.40 1,264.33 5 mL.
MULTIVITAMIN PO TABS.................... .............................. 10135011501 0.00 0.00 100 Each.
DIABETIC MGMT PROG, F/UP VISIT TO MD.... S9141......................... .............. 185.00 .............. ..............................
GENETIC COUNSEL 15 MINS................. S0265......................... .............. 94.00 .............. ..............................
DIALYSIS TRAINING/COMPLETE.............. 90989......................... .............. 988.00 .............. ..............................
ANESTH, PROCEDURE ON MOUTH.............. 170........................... .............. 87.00 .............. ..............................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Comment: One commenter provided a chart as an example of how to
disclose price transparency information broken down by Medicare,
Medicaid, commercial non-contracted in-network and commercial non-
contracted out-of-network providers. Another commenter recommended that
any publicly-available report of hospital negotiated prices be preceded
by efforts to create standardized data definitions and formats across
hospitals and ensure alignment with insurer reporting standards, which
is critical to achieving consumer-friendly, useful, ``apples-to-
apples'' information.
---------------------------------------------------------------------------
\142\ Note that this example shows only one type of standard
charge (specifically the gross charges) that a hospital would be
required to make public in the comprehensive machine-readable file.
Hospitals must also make public the payer-specific negotiated
charges, the de-identified minimum negotiated charges, the de-
identified maximum negotiated charges, and the discounted cash
prices for all items and services.
---------------------------------------------------------------------------
Response: We appreciate these comments and agree that
standardization is important to ensure that hospital charge information
can be compared across and between hospitals. Based on a review of
state requirements and a sampling of hospitals that are currently
making their charges public, we chose the specific data elements we are
finalizing, which are included in hospital billing and accounting
systems, as the ones that would result in hospital standard charge data
being transparent, identifiable, meaningful, and comparable. For
example, we believe that the billing codes present a common data
element that provides an adequate cross-walk between hospitals for
their items and services. Such codes serve as a common language between
providers and payers to describe the medical, surgical and diagnostic
services provided by the healthcare community.
We agree that defining elements in a data dictionary or more
specificity in data file formats could make it easier for IT personnel
to use hospital charge data and will take it under consideration for
future rulemaking.
For reasons we discussed earlier in section II.D.3. of this final
rule, data on FFS Medicare and Medicaid is not included as a type of
standard charge and would not be required to be included in the
comprehensive machine-readable file. Because such data is publicly
available, however, it could readily be included by a hospital that so
chooses, or it could be added by those who use the hospital standard
charge information. We further agree that additional data related to
commercial non-contracted in-network and commercial non-contracted out-
of-network providers could be useful for consumers and note that we are
concurrently publishing a price transparency proposed rule entitled
Transparency in Coverage (file code CMS-9915-P) focused on disclosure
of negotiated rates and unique out-of-network allowed amounts from most
individual and group market health insurance issuers and group health
plans. We believe that by doing so we are aligning expectations and
incentives across the healthcare system and helping to ensure alignment
with reporting standards applicable to issuers and group health plans.
Comment: A few commenters expressed concern that this proposal
falls short of achieving its goal of informing patients about the cost
of care in a meaningful way to choose among hospital providers. One
commenter asserted that even when hospitals use the same or similar
terminology to describe specific services, some services can be very
specific in ways that patients may not understand and associated out-
of-pocket costs can vary a great deal, and that unless patients are
familiar with coding and standard descriptors, it is likely that many
will compare cost estimates for services that are substantially
different from what they will receive. Several commenters asserted that
hospitals do not have adequate, timely health plan information related
to patient benefit plans, bundled payments, and adjudication rules to
provide patients with accurate out-of-pocket cost estimates prior to
services. One commenter expressed concern with the ability for an
accurate estimate to be ``published in a file'' due to the myriad ways
that payers structure and adjudicate providers' claims. The commenter
noted that third-party payers have processing systems that determine
``allowables'', adjustments, payments, patient responsibility, etc.,
and that address unique plan design constructs (at the employer's
discretion) based on each unique contract. Another commenter asserted
that there is significant complexity in negotiated contracts and many
other nuances in
[[Page 65559]]
contract arrangements that would means that each hospital would need to
provide data on literally thousands of service bundle combinations.
Response: We are clarifying the requirements for making public all
standard charges for all items and services in a comprehensive machine-
readable file and have included an example of the format and structure
the list of gross charges could take (see Table 1). We agree that
standardization in some form is important to ensure high utility for
users of the hospital standard charge information, and we have proposed
and are finalizing certain requirements (such as the data elements and
file formats) that would be standardized across hospitals. We decline
at this time to be more prescriptive in our approach; however, we may
revisit these requirements in future rulemaking should we find it is
necessary to make improvements in the display and accessibility of
hospital standard charge information for the public. Regarding the
display of payer-specific negotiated charges, we recommend hospitals
consult their rate sheets or rate tables within which the payer-
specific negotiated charges are often found. Such rate sheets typically
contain a list of common billing codes for items and services provided
by the hospital along with the associated payer-specific negotiated
charge or rate. We believe it is possible to make this information
public in a single comprehensive machine-readable file by, for example,
using multiple tabs in an XML format. For example, one tab could show a
list of individualized items and services and associated gross charges
derived from the hospital's chargemaster while another tab could
display the individualized items and services and service packages for
a specific payer's plan based on the rate sheet derived from the
hospital's contract with the payer. We also note that service packages
can often be associated with a common billing code such as a DRG or APC
or other payer modifier that is identified on the rate sheet. We
clarify that for service packages, we do not intend each and every
individual item or service within the service package to be separately
listed. For example, if a hospital has a payer-specific negotiated
charge (base charge) for a DRG code, the hospital would list that
payer-specific negotiated charge and associated DRG code as a single
line-item on its machine-readable file.
Further, as described in more detail in section II.D.1 of this
final rule, we disagree with commenters who indicated that standard
charges are meaningless to consumers. We agree, however, that for
insured patients, the payer-specific negotiated charge does not in
isolation provide a patient with an individualized out-of-pocket
estimate. Because the additional details of a consumer's benefit
structure (for example, the copay or deductible) are not standard
charges maintained by hospitals, we did not propose that hospitals
would be required to make these data elements public. However, as we
explained, the hospital standard charges, specifically, the gross
charge and the payer-specific negotiated charges, are critical data
points found on patient EOBs which are designed to communicate provider
charges and resulting patient cost obligations, taking third party
payer insurance into account. When a patient has access to payer-
specific negotiated charge information prior to obtaining a healthcare
service (instead of sometimes weeks or months after the fact when the
EOB arrives), combined with additional information the patient can get
from payers, it can help the individual determine his or her potential
out-of-pocket information for a hospital item or service in advance. As
previously noted, we agree with commenters who indicate that the
machine-readable file would contain a large amount of data, however, we
believe that a single data file would be highly useable by the public
because all the data would be in one place. By ensuring accessibility
to all hospital standard charge data for all items and services, these
data will be available for use by the public in price transparency
tools, to be integrated into EHRs for purposes of clinical decision-
making and referrals, or to be used by researchers and policy officials
to help bring more value to healthcare.
Comment: One commenter suggested that the machine-readable file
include the ``claim allowable,'' which is comprised of the sum of the
co-pay, coinsurance, deductible and health insurance company payment. A
few commenters indicated CPT codes and ICD procedure codes should be
included to facilitate apples-to-apples comparisons and ensure so
inpatient facilities do not have a way to extend charges to cash-pay
patients and inflate patient charges.
Response: We thank the commenters for their input. We believe the
``claim allowable'' referred to by the commenter is analogous to the
payer-specific negotiated charge, which is the rate negotiated by
hospitals that includes both the payer and patient portion. In other
words, as explained in section II.D.3 of this final rule, the payer-
specific negotiated charge is the discounted rate that the hospital has
negotiated with the third party payer and is typically displayed as the
second charge listed on the patient's EOB. As expressed by commenters,
additional information from the payer is necessary to determine how the
``negotiated rate'' or ``allowed amount'' is apportioned between the
payer and the patient. As explained in the CY 2020 OPPS/ASC proposed
rule, we do not believe that ICD procedure codes should be included
because, while useful, such information might be difficult to associate
with a single item or service or be otherwise difficult to display in a
file that is intended mainly for further computer processing. In
summary, we believe the proposed data elements represent the necessary
elements (standard charges, service description, and code) to ensure
hospital charge information is relevant to consumers, usable, and
comparable, so we are finalizing as proposed.
Comment: Several commenters stated that there can be multiple
revenue codes for a single service, leading to consumer confusion and
repetitive information. One commenter recommended that CMS eliminate
revenue code as a standardized data element because some procedures
have the same charge, but the revenue code differs.
Response: We believe the revenue code is an important data element
for the reasons described in the CY 2020 OPPS/ASC proposed rule, but we
are sympathetic to commenters who indicated that including such a code
may exponentially increase the number of fields in the comprehensive
machine-readable file and make the file difficult to manage. We believe
the commenter indicated this because the revenue center code is
specific to each hospital department which may offer the same or
similar items and services to other hospital departments. If a hospital
were to list out each item or service provided in each revenue center
separately, the list of items and services could be replicated many
times over. We are therefore not finalizing this data element as a
requirement, but continue to encourage its inclusion and use by
hospitals where appropriate to improve the public's understanding of
hospital standard charges. For example, if an item or service has a
different charge when provided in a different revenue center (that is,
department), the hospital could list just that one item twice--once for
the revenue center that has the different standard charge and once for
the standard charge that applies to all other revenue centers.
Comment: Several commenters suggested alternatives to the standard
[[Page 65560]]
data elements for reporting all items and services. For example, some
suggested including ICD-10 procedure codes, one suggested posting
separate charges for administrative cost of government and insurance
regulations, and another suggested hospitals make public the costs
related to cost-shifting and uncompensated care, the availability of
providers, whether the provider takes all forms of payment. One
commenter suggested leveraging a group of various stakeholders to
develop and validate these standards. One commenter also suggested that
a healthcare consumer should have the right to view a line itemized
medical bill before and after the time of service, which would contain
the full name (no abbreviations) of each medical test as spelled out in
the AMA CPT manual for which a medical provider wants paid accompanied
by the five (5) digit CPT billing code as per the AMA CPT manual. Two
commenters asserted that failure to provide an easy to understand fee
schedule in advance, combined with hospitals failure to provide an
itemized bill, results in the unfair and unethical practice known as
surprise medical billing.
Response: We appreciate the commenters' alternative suggestions and
interest in reducing the risk of surprise billing by providing
consumers with an advance itemized bill of each medical service. We
note that this final rule would not constrain hospitals from providing
an itemized bill in advance, ICD-10 codes, or other information that
consumers may find helpful to understand the cost of their care. At
this time, however, we believe that the common data requirements we are
finalizing provide sufficient information for consumers to compare
hospital standard charges.
Final Action: We are finalizing with modifications our proposals
for common data elements that must be included in the comprehensive
machine-readable file that contains all standard charges for all items
and services provided by the hospital. Specifically, we are finalizing
a requirement that the machine-readable list of hospital items and
services include the following corresponding information, as
applicable, for each item and service:
Description of each item or service (including both
individual items and services and service packages).
The corresponding gross charge that applies to each
individual item or service when provided in, as applicable, the
hospital inpatient setting and outpatient department setting.
The corresponding payer-specific negotiated charge that
applies to each item or service (including charges for both individual
items and services as well as service packages) when provided in, as
applicable, the hospital inpatient setting and outpatient department
setting. Each payer-specific negotiated charge must be clearly
associated with the name of the third party payer and plan.
The corresponding de-identified minimum negotiated charge
that applies to each item or service (including charges for both
individual items and services as well as service packages) when
provided in, as applicable, the hospital inpatient setting and
outpatient department setting.
The corresponding de-identified maximum negotiated charge
that applies to each item or service (including charges for both
individual items and services as well as service packages) when
provided in, as applicable, the hospital inpatient setting and
outpatient department setting.
The corresponding discounted cash price that applies to
each item or service (including charges for both individual items and
services as well as service packages) when provided in, as applicable,
the hospital inpatient setting and outpatient department setting.
Any code used by the hospital for purposes of accounting
or billing for the item or service, including, but not limited to, the
CPT code, HCPCS code, DRG, NDC, or other common payer identifier.
We are codifying these requirements at new 45 CFR 180.50(b). We
believe that these elements are necessary to ensure that the public can
compare standard charges for similar or the same items and services
provided by different hospitals. We are not finalizing the revenue
center code as a required data element, but we continue to encourage
its inclusion and use by hospitals where appropriate to improve the
public's understanding of hospital standard charges.
3. Machine-Readable File Format Requirements
To make public their standard charges for all hospital items and
services, we proposed to require that hospitals post the charge
information in a single digital file in a machine-readable format. We
proposed to define a machine-readable format as a digital
representation of data or information in a file that can be imported or
read into a computer system for further processing. Examples of
machine-readable formats include, but are not limited to, .XML, .JSON
and .CSV formats. A Portable Document Format (PDF) would not meet this
definition because the data contained within the PDF file cannot be
easily extracted without further processing or formatting. We proposed
to codify these format requirements at proposed new 45 CFR 180.50(c)
and the definition of machine-readable at proposed new 45 CFR 180.20.
We explained our belief that making public such data in a machine-
readable format would pose little burden on hospitals because many, if
not all, hospitals already keep these data in electronic format in
their accounting systems for purposes of, for example, ensuring
accurate billing. However, we sought comment on this assumption and the
burden associated with transferring hospital charge data into a
machine-readable format.
As an alternative, we considered proposing to require that
hospitals post their list of all standard charges for all items and
services using a single standardized file format, specifically .XML
only, because this format is generally easily downloadable and readable
for many healthcare consumers, and it could simplify the ability of
price transparency tool developers to access the data. However, we did
not want to be overly prescriptive in our requirements for formatting.
We sought public comments on whether we should require that hospitals
use a specific machine-readable format, and if so, which format(s).
Specifically, we sought public comment on whether we should require
hospitals to make all standard charge data for all items and services
available as an .XML file only.
In addition, we considered formats that could allow direct public
access to hospital standard charge information and we sought public
comment from all stakeholders, particularly hospitals and innovative IT
vendors, regarding such technologies or standards that could facilitate
public access to real-time updates in a format to make it easier for
information to be available when and where consumers want to use it. We
specifically sought public comment on adopting a requirement that
hospitals make public their standard charges through an open standards-
based Application Programming Interface (API) (sometimes referred to as
an ``open'' API) through which they would disclose the standard charges
and associated data elements discussed in section XVI.E.2 of the CY
2020 OPPS/ASC proposed rule (84 FR 39582 through 39583). We also sought
public comment on the additional burden that may be associated with a
requirement that hospitals make public their standard charges through a
standards-based API.
[[Page 65561]]
Comment: Several commenters supported the use of API-based methods
to access pricing information, noting that APIs are largely efficient
and not burdensome to implement. A few commenters believed this would
also encourage the development of an innovative health ecosystem that
would facilitate the most user-friendly interface for consuming and
presenting the information to patients. A few commenters supported the
development of industry-wide API standard or requiring a standards-
based API, which would leverage widely-recognized, national standards.
One commenter suggested that CMS require all stakeholders in the
healthcare industry to adopt standardized data exchange methods for
pricing information to allow the primary care or other referring
physician to be able to have the price conversation with the patient as
decisions are made. Another commenter urged the use of APIs to be able
to export a complete health record with both price and clinical
information. One commenter recommended that CMS use consensus-based
data standards for the posting of machine-readable files, as stated in
the June 24, 2019 Executive Order on Improving Price and Quality
Transparency in American Healthcare to Put Patients First.
Response: We appreciate comments on this issue. We believe that
standardizing exchange of hospital standard charge and other data is an
important goal, but we believe that finalizing our requirement that
hospitals make their standard charge information available to the
public online in a machine-readable format is a good initial step. We
continue to work on policies designed to advance the use of APIs to
support interoperability in collaboration with other federal partners,
such as the Office of the National Coordinator (ONC). As hospital
disclosure of standard charges matures, and Fast Healthcare
Interoperability Resources (FHIR) or other consensus-based standards
for data pricing endpoints develop, we may revisit the issue and
consider proposing in future rulemaking approaches using API or other
technology.
Final Action: We are finalizing as proposed the requirement that
hospitals post their standard charge information in a single digital
file in a machine-readable format. We are finalizing our definition of
machine-readable format as a digital representation of data or
information in a file that can be imported or read into a computer
system for further processing. Examples of machine-readable formats
include, but are not limited to, .XML, .JSON and .CSV formats. A PDF
would not meet this definition because the data contained within the
PDF file cannot be easily extracted without further processing or
formatting. We are finalizing these format requirements at new 45 CFR
180.50(c) and the definition of machine-readable at new 45 CFR 180.20.
4. Location and Accessibility Requirements for the Comprehensive
Machine-Readable File
In the CY 2020 OPPS/ASC proposed rule, we explained that we
reviewed how hospitals are currently implementing our updated
guidelines, which took effect on January 1, 2019, and we expressed
concern that some charge information made public by hospitals may be
difficult for the public to locate. For example, information may be
difficult to locate if the public is required to click down several
levels in order to find the information. We also expressed our concern
about barriers that could inhibit the public's ability to access the
information once located. For example, we indicated that we were aware
that some hospitals require consumers to set up a username and
password, or require consumers to submit various types of other
information, including, but not limited to, their email address, in
order to access the data. We expressed concern that these requirements
might deter the public from accessing hospital charge information.
Accordingly, we proposed that a hospital would have discretion to
choose the internet location it uses to post its file containing the
list of standard charges so long as the comprehensive machine-readable
file is displayed on a publicly-available web page, it is displayed
prominently and clearly identifies the hospital location with which the
standard charges information is associated, and the standard charge
data are easily accessible, without barriers, and the data can be
digitally searched. For purposes of these proposed requirements: (1)
``displayed prominently'' would mean that the value and purpose of the
web page \143\ and its content \144\ is clearly communicated, there is
no reliance on breadcrumbs \145\ to help with navigation, and the link
to the standard charge file is visually distinguished on the web page;
\146\ (2) ``easily accessible'' would mean that standard charge data
are presented in a single machine-readable file that is searchable and
that the standard charges file posted on a website can be accessed with
the fewest number of clicks; \147\ and (3) ``without barriers'' would
mean the data can be accessed free of charge, users would not have to
input information (such as their name, email address, or other
personally identifying information (PII)) or register to access or use
the standard charge data file. We proposed to codify this requirement
at proposed new 45 CFR 180.50(d).
---------------------------------------------------------------------------
\143\ https://webstandards.hhs.gov/guidelines/49.
\144\ Nielsen J. (2003, November 9). The ten most violated
homepage design guidelines. Alertbox. Available at: https://www.useit.com/alertbox/20031110.html.
\145\ https://webstandards.hhs.gov/guidelines/78.
\146\ https://webstandards.hhs.gov/guidelines/88.
\147\ https://webstandards.hhs.gov/guidelines/181.
---------------------------------------------------------------------------
We encouraged hospitals to review the HHS Web Standards and
Usability Guidelines (available at: https://webstandards.hhs.gov/),
which are research-based and are intended to provide best practices
over a broad range of web design and digital communications issues.
We also requested public comments on an alternative we considered,
which would have required hospitals to submit a link to the standard
charges file to a CMS-specified central website, or submit a link to
the standard charge file to CMS that would be made public on a CMS web
page. Such a method could have allowed the public to access standard
charge information for their purposes in one centralized location. We
stated that we believed this could reduce potential confusion about
where to find standard charge information and potentially allow
standard charge information to be posted alongside CMS hospital quality
information. It could also assist in the assessment of hospital
compliance with section 2718(e) of the PHS Act. In spite of these
possible benefits, we did not propose to require hospitals to submit or
upload a link to their standard charge information to a CMS-specified
centralized website because we believed such an effort could be
unnecessarily duplicative of ongoing State and private sector efforts
to centralize hospital pricing information and potentially confuse
consumers who may reasonably look to a hospital website directly for
charge information. However, we stated that because we appreciate the
advantages of having all data available through a single site, we
considered this alternative and sought public comments. We sought
comment on this alternative option, specifically, whether the burden
outweighs the advantages.
Finally, we sought public comments on potential additional
requirements, including easily-searchable file naming
[[Page 65562]]
conventions and whether we should specify the website location for
posting rather than our proposed requirement that would permit
hospitals some flexibility in choosing an appropriate website. Current
instances of machine-readable charge files posted on hospital websites
contain variable file types, file names, and locations on each website.
Standardizing file name or website location information could provide
consumers with a standard pathway to find the information and would
provide uniformity, making it easier for potential software to review
information on each website. Specific requirements for file naming
conventions and locations for posting on websites could also facilitate
the monitoring and enforcement of the requirement. Therefore, we sought
public comments on whether we should propose to adopt these additional
requirements or other requirements related to these issues.
Comment: A few commenters supported the development and use
centralized price transparency websites. For example, two commenters
noted that the use of a centralized posting repository would aid in
monitoring to ensure hospital compliance. One commenter agreed that the
information should be required to be placed in a standardized location,
such as a standardized ``pricing'' uniform resource locator (URL),
expressing a belief that it would go a long way toward simplifying the
presently time-consuming and confusing process when attempting to
comparison shop for healthcare. The commenter indicated that, when
combined with the machine-readability requirements, such a standardized
location would enable a wide variety of benchmarking and comparison-
shopping services that are not possible today. One commenter supported
the alternative concept for centralizing the standard charge data from
each hospital into a CMS website to which hospitals would link from
their respective websites, and quality data would be posted alongside
the charge information. Another commenter did not support a central
location that would contain all the links, expressing a belief that the
requirement to make the charge information ``displayed prominently'' on
the hospitals website would be sufficient. A few commenters suggested
that CMS host a centralized list of machine-readable pricing websites
and recommended that these websites be incorporated into the existing
CMS National Plan and Provider Enumeration System (NPPES). Another
commenter suggested that CMS launch and maintain a centralized data
portal, similar to CMS' Hospital Compare website, with tightly defined
file constructs in order to ensure the submission of consistent
information by providers so that comparisons could be made. A few
commenters suggested that CMS leverage existing price transparency
efforts by states, including requirements to report pricing information
or publish instructions on hospital websites to facilitate consumer
access to pricing information. One commenter noted that states with
APCDs and price transparency websites centralize and compare costs/
prices and other attributes across providers and payers, providing a
platform for disseminating standardized information. The commenter
suggested that CMS leverage this experience, invest in
interoperability, and advance this work across states to support
consumers. Several commenters suggested alternative approaches to
enable public access to price transparency information. One commenter
recommended the development of a transparency website that incorporates
a radius-distance search tool to view and compare hospital charges. The
commenters noted that CMS shares the contents of the NPPES database on
a regular basis as public use files due to the inevitability of FOIA
requests. A few commenters supported the use of an independent third-
party online database, with one commenter noting that this approach
would not increase burden on hospitals or clinicians, in alignment with
CMS' stated policy goals.
Response: We appreciate the many suggestions from stakeholders
related to ensuring public access to hospital standard charge
information. We agree with stakeholders that centralizing the standard
charges information disclosed by hospitals could have many advantages
for finding the files and for monitoring to ensure compliance. We
decline to finalize such a policy at this time, however, we will
continue to consider a requirement for hospitals to submit to CMS their
files, or a link to where such files may be located on the internet,
for future rulemaking. We agree with commenters that a naming
convention could assist in locating hospital charge data files and are
therefore finalizing a requirement that hospitals use a CMS-specified
naming convention, which, as discussed in the CY 2020 OPPS/ASC proposed
rule, we believe will help stakeholders more easily locate the
comprehensive machine-readable file that contains all hospital standard
charge information. We are finalizing the following naming convention
that must be used for the file: __standardcharges.[json[verbar]xml[verbar]csv] in which the EIN is
the Employer Identification Number of the hospital, followed by the
hospital name, followed by ``standardcharges'' followed by the
hospital's chosen file format.
CMS thanks the commenters for their input on the use of APCDs. We
note that this rule does not require hospitals to contribute data to an
APCD, but recognize that States with APCDs may seek to integrate the
publication of hospital standard charge data and negotiated charges
with ongoing price transparency and interoperability efforts. Moreover,
we are finalizing our policy to permit hospitals to choose an
appropriate public facing website and web page on which to make public
its comprehensive machine-readable list of all standard charges for all
items and services.
Comment: A few commenters agreed with our proposals for data
accessibility, specifically that accessing the hospital charge
information would not require consumers to input information (such as
their name, email address, or other personal identifying information)
or register. One commenter suggested, however, that this requirement
does not appear to be in alignment with Medicare.gov, which the
commenter notes requires visitors to provide personal, identifying
information (such as date of birth) when reviewing options for Medicare
health plans.
Response: We thank commenters for their support for barrier free
access to consumer cost comparison information and are finalizing as
proposed the requirement hospitals provide barrier-free access to their
machine-readable file of hospital standard charges for all items and
services provided by the hospital. The comment about access to
Medicare.gov is inaccurate; the public may review and compare plans and
pricing anonymously--with or without a drug list--without signing into
anything or providing personal information. The website requires only a
zip code entry in order to narrow down the available plans. Even if the
website did require submission of some personal information, we do not
believe it is a good analogy for access to a data file. A better
analogy might be access to CMS public use file data. Such data is also
made public online in a machine-readable format and does not require
users to create an account or enter PII to download. In contrast,
beneficiary access to a personalized online portal containing or using
personalized information (such as would allow a patient to review and
select a Medicare
[[Page 65563]]
Advantage health plan or to access one's own claims data) would seem to
us to be very different. We are therefore finalizing our proposals for
barrier-free access as proposed.
Final Action: We are finalizing, with modifications, our proposals
related to location and accessibility of the comprehensive machine-
readable file of all hospital standard charges for all items and
services it provides. Specifically, we are finalizing that a hospital
would have discretion to choose the internet location it uses to post
its file containing the list of standard charges so long as the
comprehensive machine-readable file is displayed on a publicly-
available website, it is displayed prominently and clearly identifies
the hospital location with which the standard charges information is
associated (Sec. 180.50(d)(1) and (2)). We are finalizing as proposed
that the hospital must ensure the standard charge data are easily
accessible and without barriers, including but not limited to that the
data can be accessed free of charge, without having to establish a user
account or password, and without having to submit PII (Sec.
180.50(d)(3)). We are also finalizing our policy that the data must be
able to be digitally searched (Sec. 180.50(d)(4)). Finally, we are
finalizing a modification to also require that the hospital must use a
CMS-specified naming convention for the file (Sec. 180.50(d)(5)). The
naming convention for the file must be: __standardcharges.[json[verbar]xml[verbar]csv].
5. Frequency of Machine-Readable File Updates
The statute requires hospitals to establish, update, and make
public their standard charges for each year. Therefore, we proposed to
require hospitals to make public and update their file containing the
list of all standard charges for all items and services at least once
annually (proposed new 45 CFR 180.50(e)). As explained in the CY 2020
OPPS/ASC proposed rule, we recognize that hospital charges may change
more frequently and therefore we encouraged, but did not propose to
require, that hospitals update this file more often, as appropriate, so
that the public could access the most up-to-date charge information. We
also recognized that hospitals may update their charges at different
times during the year and may also have various State price
transparency reporting requirements that require updates. For purposes
of these proposed requirements, we explained that updates that would
occur at least once in a 12-month period would satisfy our proposed
requirement to update at least once annually, and also serve to reduce
reporting burden for hospitals. In other words, we indicated that the
hospital could make public and update its list of standard charges at
any point in time during the year, so long as the update to the charge
data would occur no more than 12 months after posting.
We also proposed to require hospitals to clearly indicate the date
of the last update they made to the standard charge data, and permitted
some discretion as to where the hospital indicated the date of the last
update. For example, we stated that if a hospital chose to make public
its list of standard charges in .XML format, the first row of the
spreadsheet could indicate the date the file was last updated. We also
stated that the hospital could alternatively choose to indicate the
date the file was last updated in text associated with the file on the
web page on which it was posted, or could indicate the date in some
other way, as long as that date was clearly indicated and associated
with the file or location containing the standard charge information.
Comment: A few commenters expressed concern that requiring updates
to the data only once every 12 months may mean the data posted will not
be useful to consumers because the information posted may be outdated
depending on the frequency and timing of contract renegotiation. A few
commenters also noted that updating the database on a continual basis
during the year would be a significant burden to hospitals, while
another commenter suggested that price information should be updated
more frequently, whenever the prices are changed. One commenter
specifically supported the requirement to update the standard charge
information annually. A few commenters recommended that the web page
indicate the date of last update. One commenter asked for clarification
regarding the process for price disclosure when new medical information
is discovered that ``changes the care plan'' and whether hospitals need
to update patients if pricing information has already been provided.
Response: We thank commenters for their support and
recommendations. The statute requires hospitals to annually update its
list of standard charges, and we believe our proposed requirement for
hospitals to update their comprehensive machine-readable list of
standard charges at least once in a 12 month period (which we are
finalizing) is consistent with its plain language. We recognize the
challenges inherent in annual posting of a flat file containing all
hospital standard charges for all items in services. Specifically, we
recognize that such data may, for various reasons, become outdated over
the course of a 12 month period, but we also recognize that it may be
burdensome for a hospital to continually update its standard charge
information. We believe our final policy strikes a balance between
consumer need to plan and compare prices when seeking care with
hospital disclosure burden. We note that in the CY 2020 OPPS/ASC
proposed rule we sought comment on alternative mechanisms (such as
requiring data to be presented in an API format) that could allow for
access to continuously updated hospital charge information. As noted in
section II.E.3 of this final rule, we will continue to consider this
option for future rulemaking. We encourage hospitals to make more
frequent updates, at their discretion and commend hospitals that choose
to go beyond these requirements to more frequently update the standard
charge information they make online, or that provide additional
consumer-specific estimates based on consumer care plans.
Final Action: At a new 45 CFR 180.50(e), we are finalizing as
proposed the requirement for hospitals to make public and update their
file containing the list of all standard charges for all items and
services at least once annually. For purposes of assessing compliance,
such updates must occur at least once in a 12-month period. We are also
finalizing the requirement for hospitals to clearly indicate the date
of the last update they have made to the standard charge data, with
some discretion as to where the date of the last update is indicated,
so long as that date is clearly indicated either within the file or
otherwise clearly associated with the file.
6. Requirements for Making Public Separate Machine-Readable Files for
Different Hospital Locations
As explained in the CY 2020 OPPS/ASC proposed rule, we indicated
our understanding that some hospitals may have different locations
operating under a consolidated or single State license, and that
different hospital locations may offer different services that have
different associated standard charges. To address this circumstance, we
proposed at new 45 CFR 180.50(a)(2) that the requirements for making
public the machine-readable file containing all standard charges for
all items and services would separately apply to each hospital location
such that each hospital location would be required to make
[[Page 65564]]
public a separate identifiable list of standard charges.
Comment: One commenter supported clearly indicating which hospital
location is covered if the hospital is part of a health system. One
commenter expressed concern that because academic and teaching
institutions have expansive campuses, requiring each health system to
fulfill the requirements separately for each hospital location would
increase their burden significantly.
Response: We clarify that a hospital need not post separate files
for each clinic operating under a consolidated state hospital license;
it would be sufficient for a hospital to post a single file of standard
charges for a single campus location, if the file includes charges for
all items and services offered at the single campus location.
In cases where such off-campus and affiliated sites operate under
the same license (or approval) as a main location but have different
standard charges or offer different items and services, these locations
would separately make public the standard charges for such locations.
Final Action: We are finalizing as proposed at new 45 CFR
180.50(a)(2) (with technical edits for clarity) that the requirements
for making public the machine-readable file containing all standard
charges for all items and services apply to each hospital location such
that a separate identifiable list of all standard charges applicable to
each hospital location would also would have to be made public.
F. Requirements for Displaying Shoppable Services in a Consumer-
Friendly Manner
1. Background and Overview
In the CY 2020 OPPS/ASC proposed rule we indicated our belief that
requiring hospitals to post on the internet a machine-readable file
containing a list of all standard charges for all items and services
would be a good first step for driving transparency in healthcare
pricing because the access to such data would allow integration into
price transparency tools or into EHR systems for use at the point of
care or otherwise where and when the information is necessary to help
inform patients. As a result of the January 1, 2019 update to our
guidance, we received feedback that long lists of charges in a file
posted online in a machine-readable format may not be immediately or
directly useful for many healthcare consumers because the amount of
data could be overwhelming or not easily understood by consumers.
Because of this, we considered ways of requiring or encouraging
hospitals to make public standard charges for frequently provided
services in a form and manner that would be more directly accessible
and consumer friendly. Therefore, in addition to including all their
standard charges for all items and services in the machine-readable
file, we proposed that hospitals must make public their payer-specific
negotiated charges for common services for which consumers may have the
opportunity to shop, in a consumer-friendly manner.
First, we proposed requirements for hospitals to display a list of
payer-specific negotiated charges for a specified set and number of
``shoppable'' services. We stated that we believed doing so would
enable consumers to make comparisons across hospital sites of care.
Second, we made proposals intended to ensure the charge information for
``shoppable'' services would be presented in a way that is consumer-
friendly, including presenting the information as a service package.
Third, we made proposals related to location, accessibility, and timing
for updates.
We explained our belief that the proposals related to consumer-
friendly display of hospital charge information would align with and
enhance many ongoing State and hospital efforts. We sought comment from
hospitals regarding the extent to which our proposals are duplicative
of such ongoing efforts, and how best to ensure consistency of
consumer-friendly data display across hospital settings. We further
sought comment from consumers regarding their potential engagement with
a list of ``shoppable'' hospital items and services, including whether
our proposals would provide for a useful amount of data and data
elements that allow for actionable comparisons of ``shoppable''
hospital provided items and services.
2. Definition of ``Shoppable Service''
We proposed that for purposes of this requirement, a ``shoppable
service'' would be defined as a service package that can be scheduled
by a healthcare consumer in advance. Shoppable services are typically
those that are routinely provided in non-urgent situations that do not
require immediate action or attention to the patient, thus allowing
patients to price shop and schedule a service at a time that is
convenient for them. We proposed this definition because it is
consistent with definitions proposed by policy experts or used by
researchers who identify a service as ``shoppable'' if a patient is
able to determine where and when they will receive services and can
compare charges for multiple providers.\148\ Since hospitals may not
have insight into whether a particular service is available across
multiple providers or where a consumer will ultimately determine where
to receive a particular service, we focused our proposed definition on
the first aspect, that is, whether or not a service offered by the
hospital could be scheduled by the consumer in advance.
---------------------------------------------------------------------------
\148\ White C, and Eguchi M. Reference Pricing: A Small Piece of
the Health Care Price and Quality Puzzle. National Institute for
Health Care Reform Research Brief Number 18 (2014). Available at:
https://www.mathematica.org/our-publications-and-findings/publications/reference-pricing-a-small-piece-of-the-health-care-price-and-quality-puzzle.
---------------------------------------------------------------------------
Additionally, we proposed that the charges for such services be
displayed as a grouping of related services, meaning that the charge
for the primary shoppable service would be displayed along with charges
for ancillary items and services the hospital customarily provides as
part of or in addition to the primary shoppable service. We proposed
that hospitals would make public the payer-specific negotiated charge
for a primary shoppable service that is grouped together with charges
for associated ancillary services because we believe charge information
displayed in such a way is consumer-friendly and patient-focused. In
other words, we believe that consumers want to see and shop for
healthcare services in the way they experience the service. We proposed
to define an ``ancillary service'' as an item or service a hospital
customarily provides as part of or in conjunction with a shoppable
primary service (proposed new 45 CFR 180.20). Ancillary items and
services may include laboratory, radiology, drugs, delivery room
(including maternity labor room), operating room (including post-
anesthesia and postoperative recovery rooms), therapy services
(physical, speech, occupational), hospital fees, room and board
charges, and charges for employed professional services. Ancillary
services may also include other special items and services for which
charges are customarily made in addition to a routine service charge.
For example, an outpatient procedure may include many services that are
provided by the hospital, for example, local and/or global anesthesia,
services of employed professionals, supplies, facility and/or ancillary
facility fees, imaging services, lab services and pre- and post-op
follow up. To the extent that a hospital customarily provides (and
bills for) such ancillary services as a part of or in conjunction with
the primary service, we stated the hospital should group the ancillary
service
[[Page 65565]]
charges along with the other payer-specific negotiated charges that are
displayed for the shoppable service. We indicated that we believed such
a practice would be consumer-friendly by presenting standard charge
information in a way that reflects how a patient experiences the
service.
Examples of primary shoppable services may include certain imaging
and laboratory services, medical and surgical procedures, and
outpatient clinic visits. The emphasis on shoppable services aligns
with various State price transparency efforts and is consistent with
stakeholder feedback. Further, this emphasis is consistent with
research demonstrating that improving price transparency for shoppable
services can have an impact on driving down the cost of healthcare. We
proposed to add this definition to our regulations at proposed new 45
CFR 180.20.
Comment: Many commenters generally supported the requirement for
hospitals to make public their standard charges for shoppable services,
stating that consumers need the ability to shop and compare common
hospital services prior to purchase. In particular, one commenter
commended CMS for the focus on non-emergency services, for which
patients have an opportunity to shop in advance.
Some commenters indicated that the ability to schedule a service in
advance alone is not enough to ensure the healthcare service is
shoppable. For example, one commenter stated that patients need to have
multiple providers available in their insurer's network that provide
the service. One commenter argued that there are no healthcare services
that could be considered shoppable because beneficiaries are limited to
the coverage options in their health plan.
Additionally, commenters suggesting limiting the scope of shoppable
services based on individual consumer circumstances, for example, one
commenter suggested that the definition of shoppable services be
limited to non-covered, non-medically necessary services such as
elective cosmetic surgery; otherwise, patients may believe that a
shoppable service is not a necessary service. One commenter urged CMS
to ensure that the definition of ``shoppable services'' will always
clearly exclude emergency department services and that CMS never
introduce a definitional change that could in any way be misconstrued
to include them so that patients would not be deterred from seeking
emergency care. One commenter suggested that CMS focus price
transparency efforts on some prescription drugs and diagnostic imaging
only. A few commenters argued that certain service such as vaginal
delivery and cancer treatments would be excluded from being posted as
shoppable services because they believe such services are unpredictable
and unable to be scheduled in advance.
Response: Our proposed definition for a shoppable service aligns
with scholarly sources indicating that the ability to schedule in
advance is a key concept for determining the shoppability of a
healthcare service. As we explained in the CY 2020 OPPS/ASC proposed
rule, we believe it is reasonable to define a service as ``shoppable''
when a consumer can schedule it in advance and not by additional
criteria or concepts that could enhance or reduce the shoppability of a
particular service in an individual circumstance. For example, a
service may be medically necessary for some patients but not others. A
service may be provided in an emergency situation for some patients but
not others. A patient may or may not have a plan or insurance network
that permits them to receive a service from more than one provider in
their region or insurance network. However, such issues are specific to
individual circumstances, and are not necessarily the case for all
individuals who may have the opportunity to schedule a particular
healthcare service from a hospital in advance. We therefore think it is
reasonable to use only the first commonly used criterion for the
definition of a shoppable service (that the service can be scheduled in
advance), as using additional criteria may unduly limit the types of
services that may be shoppable for some patients. Moreover, as we noted
in the CY 2020 OPPS/ASC proposed rule, we limited the definition of
shoppable service to the first commonly used definition (that the
service can be scheduled in advance) and did not expand to other
commonly used definitions (such as whether or not there is more than
one provider in a market) because we are finalizing requirements that
apply to hospitals, and hospitals may not be able to determine whether
a service is shoppable under other criteria, for example, a hospital
may not be aware of whether or not there are other providers of the
service available to their patients.
We disagree with stakeholders who asserted that services provided
for delivery of babies or that cancer treatments are not able to be
scheduled in advance and therefore not shoppable. In most instances,
the location for the delivery of a baby is planned well in advance; at
least one analysis of a price transparency tool for non-elderly
patients found that vaginal deliveries are one of the most commonly
shopped healthcare services.\149\ Similarly, patients who receive a
cancer diagnosis often seek information about providers that are
available to treat them before committing to a treatment course by a
particular provider. By ensuring the release of hospital standard
charge information, we seek to improve consumer knowledge for the cost
side of the value proposition. Nothing in this rule would prohibit
hospitals from displaying quality information along with standard
charge information, and we encourage hospitals to provide consumers
with both cost and quality information in a consumer-friendly manner.
---------------------------------------------------------------------------
\149\ Sinaiko AD, and Rosenthal MB. Examining A Health Care
Price Transparency Tool: Who Uses It, And How They Shop For Care.
Health Affairs. April 2016. Available at: https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2015.0746.
---------------------------------------------------------------------------
Comment: One commenter disagreed with the focus on shoppable
services entirely, citing a study that found that no more than 43
percent of hospital spending is attributable to items and services that
can reasonably be scheduled in advance, and suggested CMS focus on
other hospital services to impact consumer shopping behavior.
Response: Our research has shown that there is great interest among
consumers in taking price into consideration when deciding on treatment
options and choice of provider. For example, studies have found that
more than 40 percent of healthcare services are potentially shoppable
by consumers 150 151 but such services are typically lower
cost services such as laboratory tests, imaging, and office visits,
along with some higher-cost procedures such as joint replacements.
Researchers estimate that approximately $36 billion could be saved when
consumers are given the ability to shop and compare prices for common
shoppable services.\152\ As the
[[Page 65566]]
commenter notes, at least one study indicates that approximately 43
percent of the $524 billion spend on healthcare by individuals with
employer-sponsored insurance in 2011 was spent on shoppable
services.\153\ We believe these studies taken together support our
focus on shoppable services; however, we agree that many non-shoppable
hospital and emergency services can be very expensive and account for
much of the healthcare spending in the United States.
---------------------------------------------------------------------------
\150\ White C, and Eguchi M. Reference Pricing: A Small Piece of
the Health Care Price and Quality Puzzle. National Institute for
Health Care Reform Research Brief Number 18 (2014). Available at:
https://www.mathematica.org/our-publications-and-findings/publications/reference-pricing-a-small-piece-of-the-health-care-price-and-quality-puzzle.
\151\ Frost A, and Newman D. Spending on Shoppable Services in
Health Care. Health Care Cost Institute Issue Brief No. 11 (2016).
Available at https://www.healthcostinstitute.org/files/Shoppable%20Services%20IB%203.2.16_0.pdf.
\152\ Coluni B. White Paper: Save $36 Billion in U.S. Healthcare
Spending Through Price Transparency. Truven Health Analytics, 2012.
Available at: https://www.akleg.gov/basis/get_documents.asp?session=30&docid=14495.
\153\ Health Care Cost Institute. Spending on Shoppable Services
in Health Care. Issue Brief #11. March 2016. Available at: https://www.healthcostinstitute.org/images/easyblog_articles/110/Shoppable-Services-IB-3.2.16_0.pdf.
---------------------------------------------------------------------------
Comment: One commenter agreed with the necessity of displaying
ancillary items and services in conjunction with the primary service to
give consumers ``true line of sight'' into their potential costs, but
suggested that CMS use Medicare claims data to identify the highest
volume and highest cost ancillary services associated with the 70
proposed CMS-specified shoppable services, and then provide this
mapping of service codes in the final rule. Another commenter similarly
suggested a ``numeric standard'' for determining the list of all
associated ancillary services by averaging all the required charges
associated with the primary services, since in some cases only a small
minority of patients who receive the primary service also receive the
ancillary services.
Several commenters requested that CMS clarify how hospitals would
determine which services they ``customarily'' provide to meet the
requirements for displaying ancillary services with the primary
shoppable service. A few commenters expressed concern that the
definition for ancillary services is not adequately clear, and, as a
result, hospitals may not interpret ancillary services consistently and
ultimately cause confusion for consumers. One commenter suggested that
since complex service packages are difficult to unbundle and shop for
in isolation, truly shoppable services should be limited to those that
can be grouped into a reliable service package or are typically only
administered as an independent service (which the commenter suggests be
referred to as discrete services). A few other commenters suggested
that in their hospitals, all supplies, drugs, ancillary tests,
anesthesia, and recovery are charged separately by contracted
clinicians or facilities apart from the primary service and therefore
their hospital could not meet the proposed display requirements for
standard charges for shoppable services.
Response: We believe that each hospital should be able to query its
administrative billing system or EHR system by CPT code to determine
what other services or line items from other departments (laboratory,
radiology, etc.) are typically billed with the primary shoppable
service and present this in a consumer-friendly manner to prospective
patients. Although this information may differ across hospitals, we
anticipate this effort will be beneficial to consumers who wish to
understand their likely cost of care, the items and services that are
included, and how each might vary by hospital. We further believe that
hospitals should have flexibility to determine how best to display the
primary shoppable service as well as the associated ancillary services
in a manner that is consumer-friendly. We note that many hospitals and
hospital price estimator tools are already making this information
available and suggest that hospitals unfamiliar with such efforts look
to such tools and displays for suggestions on how to display such
information in a consumer-friendly manner. Further, including ancillary
services and presenting them together as a shoppable service package
conforms with recommended best practice for displaying to consumers
prices for shoppable services.\154\
---------------------------------------------------------------------------
\154\ Catalyst for Payment Reform. The State of the Art of Price
Transparency Tools and Solutions. November 2013. Available at:
https://www.catalyze.org/wp-content/uploads/2017/04/2013-The-State-of-the-Art-of-Price-Transparency-Tools-and-Solutions.pdf.
---------------------------------------------------------------------------
Further, we appreciate the suggestions made by commenters on
opportunities for hospitals to report ancillary services by highest
volume, frequency, and cost. Since, as the commenter noted, the
availability of these services varies by hospital, we decline to impose
a standard for the number and types of ancillary services provided.
We appreciate the comment about limiting shoppable services only to
those that can be reliably bundled into service package and to include
individual services only when they are always offered as an individual
service. We recognize that these practices may differ from hospital to
hospital. Each hospital, therefore, must determine whether it
customarily provides ancillary services in conjunction with the primary
shoppable service and if so, how best to communicate and display them.
We offer in Table 2 an example template for a display of shoppable
service packages which communicates the standard charge for the primary
service along with standard charges for ancillary services customarily
provided by the hospital. We note that our final rules would require a
hospital to display the primary shoppable service charges along with
the charges for the ancillary services it provides and hospitals are
not required to indicate other ancillary services that are typically
furnished by other providers involved in the primary shoppable service.
However, for sake of consumer-friendly presentation, we strongly
encourage and recommend that the hospital indicate all ancillary
services the customer may expect as part of the primary shoppable
service, and to indicate they may be billed separately by other
entities involved in their care for such services.
Finally, we agree that hospitals may not customarily provide
ancillary services with some shoppable services. Such services may be
``simple'' or ``discrete'' as described by commenters, meaning that
they are typically experienced by the consumer and billed for by the
hospital in the same way--as a single service. In this case, as in the
example in Table 2, such services would be listed as a single shoppable
service. As a result, we are finalizing a modification to our
definition of ``shoppable services'' to remove the reference to a
``service package.'' We believe removing the term ``package'' from the
definition is necessary to clarify that not every shoppable service is
a service package. In certain instances, a primary ``shoppable
service'' may be an individual item or service or a service package.
Additionally, not all shoppable services are necessarily associated
with additional ancillary services. We believe this will help clarify
and simplify the definition. In so doing, however, we do not intend to
imply that the display of ancillary services is no longer needed or
important; we are still finalizing our policy that hospitals display
the ancillary services along with each primary shoppable service, as
applicable.
[[Page 65567]]
Table 2--Sample of Display of Shoppable Services
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Hospital XYZ Medical Center
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
Prices Posted and Effective [month/day/year]
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
Notes: [insert any clarifying notes or disclaimers]
----------------------------------------------------------------------------------------------------------------
Primary service and [Standard charge for
Shoppable service ancillary services CPT/HCPCS code Plan X]
----------------------------------------------------------------------------------------------------------------
Colonoscopy............................. primary diagnostic 45378 $750
procedure.
anesthesia (medication [code(s)] $122
only).
-------------------------------------------
physician services........ Not provided by hospital (may be billed
separately)
pathology/interpretation Not provided by hospital (may be billed
of results. separately)
-------------------------------------------
facility fee.............. [code(s)] $500
Office Visit............................ New patient outpatient 99203 $54
visit, 30 min.
Vaginal Delivery........................ primary procedure......... 59400 [$]
hospital services......... [code(s)] [$]
-------------------------------------------
physician services........ Not provided by hospital (may be billed
separately)
general anesthesia........ Not provided by hospital (may be billed
separately)
pain control.............. Not provided by hospital (may be billed
separately)
-------------------------------------------
two day hospital stay..... [code(s)] [$]
monitoring after delivery. [code(s)] [$]
----------------------------------------------------------------------------------------------------------------
Comment: Several hospital commenters expressed concern that the
volume of plans, in some cases more than 100, with which they have
contracted rates would present a challenge with respect to collecting
and posting ancillary items and services for each primary service.
Response: In the CY 2020 OPPS/ASC proposed rule, we proposed that
hospitals make public their payer-specific negotiated charges for at
least 300 shoppable services in a consumer-friendly manner. We are
finalizing this policy because we believe it is necessary to present
hospital standard charge information in a more consumer-friendly manner
than simply to make all standard charges for all items and services
public in a comprehensive machine-readable file. We did not propose
that hospitals display their gross charges in a consumer-friendly
format because, as many hospitals commented on the FY 2019 IPPS/LTCH
PPS rule in which we updated our guidance to require hospitals to make
public their chargemaster rates online in a machine-readable format,
such charges are not relevant to most consumers, even to self-pay
consumers who are often provided discounted rates by the hospital. As
discussed in more detail in section II.D of this final rule, we are
also finalizing three additional types of standard charges: (1) The
discounted cash price, (2) the de-identified minimum negotiated charge,
and (3) the de-identified maximum negotiated charge. We believe these
types of standard charges are important and relevant to consumers and
therefore will include these types of standard charges in the data
elements hospitals must display in a consumer-friendly manner. We
discuss this in more detail in section II.F.4 of this final rule.
We recognize that hospitals will be presenting much of their
standard charge data in a manner that has historically not been made
available to the public. For many hospitals, particularly large
hospitals, this may involve display of data for potentially many dozens
of payers and plan products. This rule will not require hospitals to
change any of their charging or billing practices, but, rather, to
provide their standard charge information to the public in a consumer-
friendly manner, that is, in a way that more closely approximates
hospital provided services as they are experienced by the consumer. A
detailed assessment of the estimated burden on hospitals may be found
in section V of this final rule.
We note that the final rules, as discussed in more detail in II.F.5
of this final rule, provide hospitals with flexibility to determine the
format they wish to use in order to make these data consumer-friendly
and readily accessible. For hospitals that lack resources, flat files
posted online may be the simplest and least expensive option. In such
cases, we believe it would be reasonable and permissible under our
final rules related to the consumer-friendly display of shoppable
services for a hospital to post one file of shoppable services for each
set of standard charges displayed. For example, the hospital could post
one consumer-friendly file for each list of the payer-specific
negotiated charges the hospital has established with each payer for its
list of 300 shoppable services, a stand-alone consumer-friendly file of
discounted cash prices for shoppable services, and a stand-alone
consumer-friendly file of the de-identified minimum and maximum
negotiated charges for each of the shoppable services. In this way,
consumers could search for and review only the charges that are
standard for their particular insurance plan for 300 shoppable services
provided by the hospital in a consumer-friendly format. Self-pay
individuals could search for and review a file focused on providing
them with discounted cash price information for each of the shoppable
services.
[[Page 65568]]
Final Action: We are modifying the definition of ``shoppable
service'' to remove the phrase ``shoppable service package'' and
finalizing a definition of ``shoppable services'' to mean a service
that can be scheduled by a healthcare consumer in advance. We are
finalizing that when the shoppable service is customarily accompanied
by the provision of ancillary services, the hospital must present the
shoppable service as a grouping of related services, meaning that the
charge for the primary shoppable service (whether an individual item or
service or service package) is displayed along with charges for
ancillary services. We finalize our definition of ``ancillary service''
for purposes of section 2718(e) of the PHS Act to mean an item or
service a hospital customarily provides as part of or in conjunction
with a shoppable primary service (new 45 CFR 180.20). As explained in
the CY 2020 OPPS/ASC proposed rule, ancillary items and services may
include laboratory, radiology, drugs, delivery room (including
maternity labor room), operating room (including post-anesthesia and
postoperative recovery rooms), therapy services (physical, speech,
occupational), hospital fees, room and board charges, and charges for
employed professional services. Ancillary services may also include
other special items and services for which charges are customarily made
in addition to a routine shoppable service charge. For example, an
outpatient procedure may include additional services that are provided
by the hospital, for example, local and/or global anesthesia, services
of employed professionals, supplies, facility and/or ancillary facility
fees, imaging services, lab services, and pre- and post-op follow up.
3. Selected Shoppable Services
We proposed to require hospitals to make public a list of their
payer-specific negotiated charges for as many of the 70 shoppable
services that we identify in Table 3 that are provided by the hospital,
and as many additional shoppable services selected by the hospital as
are necessary to reach a combined total of at least 300 shoppable
services (new 45 CFR 180.60(a)).
In a study of 2011 claims by autoworkers, researchers identified a
set of 350 frequently billed healthcare services that consumers could
schedule in advance and for which there was variation in charges across
providers.\155\ Hospitals that are early adopters of price transparency
have suggested that it is possible to initially identify and display
good-faith individualized price estimates for at least 350 shoppable
healthcare services identified by primary billing codes (including
prices for ancillary services) with more sophisticated price
transparency tool developers creating and being able to display
individualized pricing estimates for at least 1000 shoppable services.
In contrast, most States that require hospital posting of shoppable
services range in requiring 25-50 shoppable services, with California
being the only State that requires the corresponding charge information
to include ancillary services. In the CY 2020 OPPS/ASC proposed rule,
we indicated that since these rules would apply to all hospitals
operating in the United States, some of which may not have any
experience in displaying charges for shoppable services, we believed it
would be reasonable to propose a starting point of at least 300
shoppable services for which hospitals would be required to display
payer-specific negotiated charges. We further indicated that we
anticipated that we would increase this number over time as hospitals
become accustomed to displaying charge information to consumers as a
grouping of related charges and as such data is more routinely used by
consumers.
---------------------------------------------------------------------------
\155\ White C. and Eguchi M. Reference Pricing: A Small Piece of
the Health Care Price and Quality Puzzle. National Institute for
Health Care Reform Research Brief Number 18 (2014). Available at:
https://www.mathematica.org/our-publications-and-findings/publications/reference-pricing-a-small-piece-of-the-health-care-price-and-quality-puzzle.
---------------------------------------------------------------------------
We also indicated that we believed it would be reasonable to
require a portion of the 300 shoppable services to be CMS-specified in
order to ensure standardization that would provide consumers with the
ability to compare prices across hospital settings. We stated that we
further believed it would be prudent to permit hospitals to select a
portion of the shoppable services themselves, recognizing that some
hospitals may specialize in certain services (for example, specialized
procedures) or may serve populations that utilize other shoppable
services with more frequency or are more relevant than the ones we have
identified for purposes of the CMS-specified services.
The proposed list of 70 shoppable services were selected based on
an analysis of shoppable services that are currently made public under
State price transparency requirements, a review of services that
frequently appear in web-based price transparency tools, an analysis of
high volume services and high cost procedures derived from External
Data Gathering Environment (EDGE) server data,\156\ and a review by CMS
medical officers. In other words, we used a combination of quantitative
analysis of the EDGE server claims data, a qualitative review of
commonly selected services for State and hospital price transparency
initiatives and tools, and clinician review to ensure such services
could be scheduled in advance in order to identify our list of 70 CMS-
specified shoppable services.
---------------------------------------------------------------------------
\156\ Consistent with 45 CFR 153.700, in States where HHS is
operating the risk adjustment program, issuers must submit
enrollment, claims, and encounter data for risk adjustment-covered
plans in the individual and small group markets through the External
Data Gathering Environment (EDGE) servers. Issuers upload enrollee,
pharmaceutical claim, medical claim, and supplemental diagnosis
information from their systems to an issuer-owned and controlled
EDGE server.
---------------------------------------------------------------------------
In addition to the proposed 70 CMS-specified shoppable services, we
also proposed that each hospital would select, at minimum, 230
additional shoppable services, identified by a primary HCPCS, CPT, DRG
(or other widely used industry code, as applicable) and make publicly
available a list of its payer-specific negotiated charges for each of
those shoppable services, including the payer-specific negotiated
charges for the shoppable service in both the inpatient setting and the
outpatient setting, if different. We further proposed that hospitals
select such services based on the utilization or billing rate of the
services in the past year. We stated that we believed that enabling
hospitals to select most of the shoppable services for which they make
their payer-specific negotiated charges available would permit them to
tailor their list of shoppable services to their specific patient
populations and area of expertise. For example, a children's hospital
could select additional shoppable services that are predominantly
provided to children.
Although we indicated that we believed that most hospitals would
provide the 70 CMS-specified shoppable services (which are very common
and frequently billed by hospitals based on our analysis of claims) it
is possible that some hospitals may not offer all of them (for example,
specialty hospitals). Therefore, we proposed that hospitals would make
public a list of their payer-specific negotiated charges for as many of
the 70 shoppable services specified by CMS that are provided by the
hospital, plus as many additional shoppable services as would be
necessary to reach a total of at least 300 shoppable services.
We articulated an alternative option by which we would specify a
larger set of shoppable services and allow
[[Page 65569]]
hospitals to select up to 70 CMS-specified shoppable services from the
larger list for which it would make its payer-specific negotiated
charges publicly available. The hospital would then select an
additional 230 shoppable services for a total of 300 shoppable
services. But we did not propose this because we believe most hospitals
provide the 70 CMS-specified shoppable services and because we were
concerned that more discretion would erode our desire to ensure
consumers can get hospital charge information for a minimum
standardized set of services.
We sought public comments on the 70 CMS-specified shoppable
services we proposed. We indicated we were particularly interested in
feedback regarding the specific services we identified as shoppable
services and whether other services should be included because they are
more common, more shoppable, or both. We also indicated we were
interested in feedback on whether we should require more or less than a
total of 300 shoppable services. Specifically, we sought comment from
hospitals and consumers on whether a list of 100 shoppable services (or
less) would be a reasonable starting point. We also sought public
comment on whether we should identify more specific requirements
related to hospital-selected shoppable services; for example, requiring
hospitals to select their most frequently billed shoppable services
(that are not included in the CMS-specified list).
Comment: Many commenters provided opinions about the number of
shoppable services that hospitals would be required to display. Several
commenters indicated the total number of shoppable services should be
increased to more than 300. For example, one commenter suggested that
the list of shoppable services be as robust as necessary, using an
example of some price transparency platforms that include up to 8,000-
9,000 procedures. One commenter suggested that CMS expand on the
required list of 70 and leverage the experience of states to add more
services. One commenter suggested that all hospital services should be
displayed because any non-emergent service provided by the hospital
could be scheduled in advance. In contrast, many commenters supported
decreasing the total number of shoppable services, arguing that a lower
number would be more manageable and less burdensome for hospitals. For
example, one commenter stated that the list of shoppable services
should be limited to the 70 that CMS initially provided without
expanding. Several commenters argued that requiring a total of 300
shoppable services is excessive, especially for small rural hospitals
and CAHs that do not provide surgical, magnetic resonance imaging
(MRI), or obstetric care, with one commenter suggesting that 75-100
total items and services would be more reasonable. One commenter
suggested reducing the number of shoppable services to reflect the
small number of inpatient services provided by LTCHs. One commenter
specifically suggested that rather than selecting 230 shoppable
services, hospitals should select 100 total services distributed evenly
across the 25 highest price inpatient services, the 25 highest dollar
value inpatient services (calculated using price per service multiplied
by the number of services provided), the 25 highest price outpatient
services, and the 25 highest dollar value outpatient services.
Response: As we indicated in the CY 2020 OPPS/ASC proposed rule, we
believe that 300 shoppable services is a reasonable number based on
research,\157\ discussions with hospital executives who are early
adopters and indicated it is possible to initially identify and display
good-faith individualized price estimates for at least 350 shoppable
healthcare services identified by primary billing codes (including
prices for ancillary services), and discussions with more sophisticated
price transparency tool developers who identify and display more than
1,000 shoppable services. By contrast, we recognized that most States
that require hospital posting of shoppable services require 25-50
shoppable services, with California being the only State that requires
the corresponding charge information to include ancillary services.
Thus, we determined that 300 shoppable services would be a reasonable
starting point. While we agree that nearly all hospital items and
services could be considered ``shoppable'' because nearly all could be
scheduled in advance, we continue to believe that a total of 300
services strikes a balance between the need for consumer-friendly
presentation of shoppable services and hospital burden and are
therefore finalizing as proposed our requirement that hospitals make
public 70 CMS-specified shoppable services along with an additional 230
hospital-selected shoppable services for a total of 300 shoppable
services.
---------------------------------------------------------------------------
\157\ White C. and Eguchi M. Reference Pricing: A Small Piece of
the Health Care Price and Quality Puzzle. National Institute for
Health Care Reform Research Brief Number 18 (2014). Available at:
https://www.mathematica.org/our-publications-and-findings/publications/reference-pricing-a-small-piece-of-the-health-care-price-and-quality-puzzle.
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Further, as indicated in the CY 2020 OPPS/ASC proposed rule, we
recognized that some hospitals may not offer all 70 CMS-specified
services. Therefore, we proposed and are finalizing a requirement that
hospitals would make public their list of standard charges for as many
of the 70 shoppable services specified by CMS that are provided by the
hospital, plus as many additional shoppable services as would be
necessary to reach a total of at least 300 shoppable services. We agree
with commenters that selecting shoppable services based on the highest
price and highest dollar value inpatient and outpatient services are
good examples of criteria for hospitals to consider as they determine
their hospital-selected 230 shoppable services, however, many such
services are not as common as other shoppable services provided by the
hospital. We believe that hospitals should make final determinations
based on how commonly such services are provided to their patient
population, and thus we are finalizing as proposed our requirement that
hospitals select such services based on the utilization or billing rate
of the services in the past year. In other words, the hospital must
take into consideration the frequency with which they provide services
that meet the definition of `shoppable' to the patient population they
serve when determining the hospital-selected shoppable services. We
note that nothing would preclude a hospital from taking additional
information (such as the cost of the services) into consideration as
they develop their list of 230 shoppable services.
In light of commenters that asserted that some small or specialty
hospitals may not offer 300 services that could be scheduled by
consumers in advance, we are modifying our requirements to finalize a
policy that in cases where a hospital does not provide 300 services
that could be scheduled by consumers in advance, the hospital must list
as many of the services it provides that could be scheduled by patients
in advance (that is, the hospital must list as many shoppable services
as it provides).
Comment: Several commenters cited the need for uniformity in
hospital selection of shoppable services. A few commenters agreed that
shoppable services should be standardized to allow for comparability
for consumers. A few commenters argued that patients would not be able
to adequately compare pricing information for the items and services in
70 CMS-identified shoppable services that are performed in non-
[[Page 65570]]
hospital settings. One commenter suggested that CMS define a specific
CPT code range to clarify which procedures are required among the list
of shoppable services to ensure uniformity and accuracy. One commenter
suggested that these requirements be phased in gradually, starting with
a requirement to post standard charges for ``simpler'' visits
initially, and then include surgeries, DRGs, and services that are more
complicated. A few commenters expressed concerns that the variability
in how hospitals bundle items and services would not yield accurate
consumer comparisons for shoppable services.
Response: To ensure some degree of uniformity in the shoppable
services hospitals make public in a consumer-friendly manner, we
proposed and are finalizing 70 CMS-specified hospital services
identified by CPT and other commonly used billing codes. As we stated
in the CY 2020 OPPS/ASC proposed rule, the list of 70 shoppable
services were selected based on an analysis of shoppable services that
are currently made public under State price transparency requirements,
a review of services that frequently appear in web-based price
transparency tools, an analysis of high volume services and high cost
procedures derived from EDGE server data,\158\ and a review by CMS
medical officers. In other words, we used a combination of quantitative
analysis of the EDGE server claims data, a qualitative review of
commonly selected services for State and hospital price transparency
initiatives and tools, and clinician review to ensure such services
could be scheduled in advance in order to identify our list of 70 CMS-
specified shoppable services. Based on this analysis, we believe that
these 70 CMS-specified shoppable services are commonly provided by
hospitals and we believe hospital display of these services will ensure
consumers have access to standard charges for a minimum set of
shoppable services.
---------------------------------------------------------------------------
\158\ Consistent with 45 CFR 153.700, in States where HHS is
operating the risk adjustment program, issuers must submit
enrollment, claims, and encounter data for risk adjustment-covered
plans in the individual and small group markets through the External
Data Gathering Environment (EDGE) servers. Issuers upload enrollee,
pharmaceutical claim, medical claim, and supplemental diagnosis
information from their systems to an issuer-owned and controlled
EDGE server.
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We recognize that many of the shoppable services included on the
list of 70 CMS-specified services are provided by settings other than
hospitals; however, our requirements apply only to hospitals (as
defined at 45 CFR 180.20), and not when they are provided by non-
hospital sites of care. Therefore this information is useful to
consumers when they are comparing services across hospital settings.
While non-hospital sites of care are not subject to these regulations
we are finalizing, we encourage non-hospital sites of care that offer
the same shoppable services to standardize their displays of charges so
that consumers have more options and information available to them.
We appreciate that beginning with ``simpler'' shoppable services
could provide a phased pathway for hospitals to make public their
shoppable services; however, we decline to adopt this approach because
some of the more ``complex'' shoppable services are those for which
consumers routinely shop (for example, colonoscopy or vaginal
delivery). We recognize that there may be some variability in the
method used by hospitals to establish and display standard charges for
shoppable primary services and associated ancillary services, and we
encourage hospitals to communicate in consumer-friendly ways what is or
is not included in the hospital's prices for a shoppable service and
its ancillary services.
Comment: Several commenters offered comments related to the
services included on the CMS-specified list of 70 shoppable services.
For example, one commenter provided a list of 23 services they
suggested removing from the 70 CMS-specific shoppable services due to
their variability in cost, charge structure, charge amounts, and
associated complexity for providers to develop a sound ``proposed
rate.'' The list provided by the commenter included procedures
identified by DRG that are typically divided into those with and
without major comorbid conditions or complications (MCC).
A few commenters indicated their belief that the services provided
by cancer hospitals are not shoppable, and one commenter argued that
the list of 70 CMS-specified shoppable services are irrelevant to
cancer hospitals because cancer hospitals do not offer standalone
services (such as imaging, laboratory or surgical services). Instead,
such hospitals provide integrated disease management with disease-
specific financial counseling. One commenter indicated that specialty
hospitals (such as children's hospitals, orthopedic, or cancer
facilities) should have customized lists of shoppable services.
A few commenters requested that Evaluation and Management (E&M)
services be removed from the list because E&M services are billed by
providers in an office setting and not hospitals. A few commenters
requested that laboratory testing be removed from the list with one
commenter requesting that CMS remove 14 routine laboratory tests
included in the required list of 70 shoppable items and services
because they are among the least costly services and are less central
to patients' economic and site of care decisions, and suggested that
CMS replace them with higher cost procedures more likely to be
separately paid when performed in a hospital setting. One commenter
stated that the list of shoppable services is too long and includes
codes that are not billed by many hospitals and rarely scheduled in
advance, for example, laboratory tests and CPT code 93000 for
electrocardiogram. By contrast, one commenter encouraged CMS to include
clinical laboratory test pricing as part of the standard charge
information hospitals are required to post, and requested that CMS
ensure the requirements under this rule are consistent with the type of
data required to be reported to CMS under section 216(a) of the
Protecting Access to Medicare Act (PAMA).
One commenter requested clarification on whether posting an average
charge based on historical cases would be sufficient if the hospital
does not charge based on the specific CMS-specified CPT or DRG codes.
Another commenter pointed out that the standard DRG codes in the list
of 70 CMS-specified shoppable services correspond to MS-DRGs and not to
DRGs used by third party payers (for example, All Patients Refined
(APR)-DRGs). One commenter requested clarification on how the 70 CMS-
specified shoppable services would be categorized asking whether it
would be DRG for all inpatient services only, and if so, what is the
packaging type for ambulatory services.
Response: We appreciate that specialty hospitals offer services
that are different from most hospitals, however, we do not believe that
should be an impediment to specialty hospitals displaying their charges
for shoppable services. Similarly, we believe our requirements have
addressed situations in which a hospital does not provide one or more
of the 70 CMS-specified shoppable services. Specifically, we proposed
and are finalizing a requirement that if a hospital does not provide
some of the 70 CMS-specified services, then the hospital would identify
enough shoppable services that it commonly provides to its unique
patient population so that the total number of shoppable services is at
least 300. We believe this policy will ensure that the shoppable
services posted are standardized as much as possible across
[[Page 65571]]
all hospitals while also ensuring specialty hospital have flexibility
to make public the most relevant shoppable services for their unique
patient populations.
The 70 CMS-specified shoppable services are found in Table 3 and
are divided into four broad categories: E&M Services, Laboratory and
Pathology Services, Radiology Services, Medicine and Surgery Services.
While some such services (for example, E&M or laboratory services) may
not be the most expensive hospital services, our analysis indicates
they are commonly billed and are healthcare services that are commonly
shopped. Such services may be billed by a hospital as part of a
hospital inpatient or outpatient visit. As noted above, to the extent
such services are not provided by a hospital, the hospital may select
additional shoppable services that are relevant to its patient
population.
We appreciate commenters who pointed out that the codes numbers
listed for DRG procedures are MS-DRG codes and not APR-DRGs or other
third party payer service package codes. We recognize this could also
be the case for other CMS-specified services that are routinely
negotiated by hospitals with third party payers as packaged services.
For example, the same or similar shoppable service may be paid as a
service package by two different payers that use two different common
billing codes (for example, an MS-DRG by Medicare versus an APR-DRG by
another third party payer). As such, we will permit hospitals to make
appropriate substitutions and cross-walks as necessary to allow them to
display their standard charges for the shoppable services across all
their third party payers. Average charges based on prior years would
not be acceptable as an average charge is not one of the types of
standard charges we are finalizing in this rule.
Section 1834A of the SSA, as established by section 216(a) of the
PAMA, required significant changes to how Medicare pays for clinical
diagnostic laboratory tests under the Clinical Laboratory Fee Schedule.
Laboratories, including independent laboratories, physician office
laboratories and hospital outreach laboratories, that meet the
definition of an applicable laboratory are required to report
applicable information, which generally includes each private payor
rate for each clinical diagnostic laboratory test for which final
payment has been made during the data collection period, the associated
volume of tests performed corresponding to each private payor rate, and
the specific HCPCS code associated with the test. We do not believe
that any of the provisions under this rule conflict with or duplicate
the requirements under section 1834A of the SSA. While consumer-
friendly display of shoppable laboratory services may include similar
data (such as payer-specific negotiated charges), the requirement under
this rule is to provide that information in a consumer-friendly format
to which consumers have easy access.
We decline to make any changes in our list of CMS-specified
shoppable services. As explained in the CY 2020 OPPS/ASC proposed rule,
we used a combination of quantitative analysis of the EDGE server
claims data, a qualitative review of commonly selected services for
State and hospital price transparency initiatives and tools, and
clinician review to ensure such services could be scheduled in advance
in order to identify our list of 70 CMS-specified shoppable services.
We are therefore finalizing the 70 CMS-specified shoppable services as
proposed.
Final Action: We are finalizing as proposed our requirement for
hospitals to make public their standard charges for as many of the 70
shoppable services that we identify in Table 3 that are provided by the
hospital, and as many additional shoppable services selected by the
hospital as is necessary for a combined total of at least 300 shoppable
services (new Sec. 180.60(a)). In response to comments, we are adding
a requirement that if a hospital does not provide 300 shoppable
services, the hospital must list as many shoppable services as they
provide. These requirements will be finalized at 45 CFR 180.60(a). We
will also permit hospitals to make appropriate coding substitutions and
cross-walks as necessary to be able to display their standard charges
for the 70 CMS-specified services across third party payers.
We are further finalizing as proposed that in selecting a shoppable
service, a hospital must consider the rate at which it provides and
bills for that shoppable service. In other words, the shoppable
services selected for display by the hospital should be commonly
provided to the hospital's patient population. We note that this
proposal, which discussed in the CY 2020 OPPS/ASC proposed rule (84 FR
39589) was inadvertently omitted from the proposed regulation text but
we are including it at new 45 CFR 180.60(a).
Finally, we clarify that hospitals should cross-walk and use, as
applicable, an appropriate payer-specific billing code (for example, an
APR-DRG code) in place of the MS-DRG code indicated for the five
procedures in the list of 70 CMS-specified shoppable services that are
identified by MS-DRG codes 216, 460, 470, 473, and 743.
TABLE 3--Final List of 70 CMS-Specified Shoppable Services
------------------------------------------------------------------------
2020 CPT/HCPCS
Evaluation & management services primary code
------------------------------------------------------------------------
Psychotherapy, 30 min............................. 90832
Psychotherapy, 45 min............................. 90834
Psychotherapy, 60 min............................. 90837
Family psychotherapy, not including patient, 50 90846
min..............................................
Family psychotherapy, including patient, 50 min... 90847
Group psychotherapy............................... 90853
New patient office or other outpatient visit, 99203
typically 30 min.................................
New patient office of other outpatient visit, 99204
typically 45 min.................................
New patient office of other outpatient visit, 99205
typically 60 min.................................
Patient office consultation, typically 40 min..... 99243
Patient office consultation, typically 60 min..... 99244
Initial new patient preventive medicine evaluation 99385
(18-39 years)....................................
Initial new patient preventive medicine evaluation 99386
(40-64 years)....................................
------------------------------------------------------------------------
[[Page 65572]]
2020 CPT/HCPCS
Laboratory & pathology services primary code
------------------------------------------------------------------------
Basic metabolic panel............................. 80048
Blood test, comprehensive group of blood chemicals 80053
Obstetric blood test panel........................ 80055
Blood test, lipids (cholesterol and triglycerides) 80061
Kidney function panel test........................ 80069
Liver function blood test panel................... 80076
Manual urinalysis test with examination using 81000 or 81001
microscope.......................................
Automated urinalysis test......................... 81002 or 81003
PSA (prostate specific antigen)................... 84153-84154
Blood test, thyroid stimulating hormone (TSH)..... 84443
Complete blood cell count, with differential white 85025
blood cells, automated...........................
Complete blood count, automated................... 85027
Blood test, clotting time......................... 85610
Coagulation assessment blood test................. 85730
------------------------------------------------------------------------
2020 CPT/HCPCS
Radiology services primary code
------------------------------------------------------------------------
CT scan, head or brain, without contrast.......... 70450
MRI scan of brain before and after contrast....... 70553
X-Ray, lower back, minimum four views............. 72110
MRI scan of lower spinal canal.................... 72148
CT scan, pelvis, with contrast.................... 72193
MRI scan of leg joint............................. 73721
CT scan of abdomen and pelvis with contrast....... 74177
Ultrasound of abdomen............................. 76700
Abdominal ultrasound of pregnant uterus (greater 76805
or equal to 14 weeks 0 days) single or first
fetus............................................
Ultrasound pelvis through vagina.................. 76830
Mammography of one breast......................... 77065
Mammography of both breasts....................... 77066
Mammography, screening, bilateral................. 77067
------------------------------------------------------------------------
2020 CPT/HCPCS
Medicine and surgery services primary code
------------------------------------------------------------------------
Cardiac valve and other major cardiothoracic 216
procedures with cardiac catheterization with
major complications or comorbidities.............
Spinal fusion except cervical without major 460
comorbid conditions or complications (MCC).......
Major joint replacement or reattachment of lower 470
extremity without major comorbid conditions or
complications (MCC)..............................
Cervical spinal fusion without comorbid conditions 473
(CC) or major comorbid conditions or
complications (MCC)..............................
Uterine and adnexa procedures for non-malignancy 743
without comorbid conditions (CC) or major
comorbid conditions or complications (MCC).......
Removal of 1 or more breast growth, open procedure 19120
Shaving of shoulder bone using an endoscope....... 29826
Removal of one knee cartilage using an endoscope.. 29881
Removal of tonsils and adenoid glands patient 42820
younger than age 12..............................
Diagnostic examination of esophagus, stomach, and/ 43235
or upper small bowel using an endoscope..........
Biopsy of the esophagus, stomach, and/or upper 43239
small bowel using an endoscope...................
Diagnostic examination of large bowel using an 45378
endoscope........................................
Biopsy of large bowel using an endoscope.......... 45380
Removal of polyps or growths of large bowel using 45385
an endoscope.....................................
Ultrasound examination of lower large bowel using 45391
an endoscope.....................................
Removal of gallbladder using an endoscope......... 47562
Repair of groin hernia patient age 5 years or 49505
older............................................
Biopsy of prostate gland.......................... 55700
Surgical removal of prostate and surrounding lymph 55866
nodes using an endoscope.........................
Routine obstetric care for vaginal delivery, 59400
including pre-and post-delivery care.............
Routine obstetric care for cesarean delivery, 59510
including pre-and post-delivery care.............
Routine obstetric care for vaginal delivery after 59610
prior cesarean delivery including pre-and post-
delivery care....................................
Injection of substance into spinal canal of lower 62322-62323
back or sacrum using imaging guidance............
Injections of anesthetic and/or steroid drug into 64483
lower or sacral spine nerve root using imaging
guidance.........................................
Removal of recurring cataract in lens capsule 66821
using laser......................................
Removal of cataract with insertion of lens........ 66984
Electrocardiogram, routine, with interpretation 93000
and report.......................................
Insertion of catheter into left heart for 93452
diagnosis........................................
Sleep study....................................... 95810
Physical therapy, therapeutic exercise............ 97110
------------------------------------------------------------------------
[[Page 65573]]
4. Required Corresponding Data Elements
We proposed that the consumer-friendly charge information the
hospital makes available to the public online for the CMS and hospital-
selected shoppable services must include certain corresponding data
elements in order to ensure that consumers understand the hospital's
payer-specific negotiated charge for each shoppable service and can use
that information to make comparisons across hospitals. Specifically, we
proposed that the consumer-friendly display of payer-specific
negotiated charge information contain the following corresponding
information for each of the 70 CMS-specified and at least 230 hospital-
selected shoppable services:
A plain-language description of each shoppable service.
For example, hospitals would not be required, but are invited, to
review and use the Federal plain language guidelines.\159\
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\159\ See Federal plain language guidelines, available at
https://plainlanguage.gov/guidelines/.
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The payer-specific negotiated charge that applies to each
shoppable service. If the hospital does not provide one or more of the
CMS-specified shoppable services, the hospital may indicate ``N/A'' for
the corresponding charge or otherwise make it clear that the service is
not provided by the hospital. Each payer-specific charge must be
clearly associated with the name of the third party payer.
A list of all the associated ancillary items and services
that the hospital provides with the shoppable service, including the
payer-specific negotiated charge for each ancillary item or service.
The location at which each shoppable service is provided
by the hospital (for example, Smithville Campus or XYZ Clinic),
including whether the payer-specific negotiated charge for the
shoppable service applies at that location to the provision of that
shoppable service in the inpatient setting, the outpatient department
setting, or both. If the payer-specific negotiated charge for the
shoppable service varies based upon location or whether the hospital
provides the shoppable service in the inpatient versus the outpatient
setting, the hospital would be required to identify each payer-specific
negotiated charge.
Any primary code used by the hospital for purposes of
accounting or billing for the shoppable service, including, but not
limited to, the CPT code, the HCPCS code, the DRG, or other commonly
used service billing code.
We proposed that hospitals make public the payer-specific
negotiated charge for a shoppable service in a manner that groups the
payer-specific negotiated charge for the primary shoppable service
along with charges for associated ancillary services because we believe
charge information displayed in such a way is consumer-friendly and
patient-focused. In other words, we believe that consumers want to see
and shop for healthcare services in the way they experience the
service. We recognized that not all hospitals will customarily provide
exactly the same ancillary items or services with a primary shoppable
service and therefore we believe it is important for hospitals to
display a list of which ancillary services are included in conjunction
with or as part of the primary shoppable service.
We proposed to codify these proposed required data elements at
proposed new 45 CFR 180.60(b). We sought public comments on these data
elements and whether there are additional data elements that should be
displayed to the public in a consumer-friendly manner. We emphasized
that nothing in our proposal was meant to inhibit or restrict hospitals
from including additional data elements that would improve the ability
of healthcare consumers to understand the hospital's charges for
shoppable services.
Comment: Some commenters offered suggestions on specific data
elements they felt would be necessary to provide consumers with
accurate understanding of the shoppable services provided by hospitals.
For example, one commenter suggested that CMS specifically require that
hospitals list both their technical and professional fees to provide a
more accurate picture of potential costs. The commenter argued that
including such charges would reduce the likelihood of surprise billing
as these additional fees often come in the form of an additional charge
or bill to consumers. The commenter cited a new state law in Minnesota
requiring that all provider-based clinics that charge a separate
facility fee for visits give notice to patients and publicly post a
disclosure on their website stating that patients may receive a
separate charge or billing for the facility component, which may result
in a higher out-of-pocket expense. Another commenter suggested the
consumer-friendly display of standard charges should take into account
cost-shifting and uncompensated care, federal requirements such as
EMTALA, the availability of providers for after-hours care, and whether
the provider takes all forms of payment.
A few commenters expressed concern that the proposal does not
provide hospitals adequate specificity as to how the data should be
formatted to ensure that information is meaningful and presented in a
consumer-friendly manner. Many commenters stated that display of
standard charges for shoppable services would be incomplete without
corresponding data on healthcare quality to allow consumers to
understand value. A few commenters recommended requiring hospitals to
include quality information alongside price in a meaningful way, with
one suggesting that we also draw on the large body of research on
healthcare quality measures and presentation format, including volume
information. The commenter, however, cautioned that if CMS took this
route, procedure complications data would be difficult for consumers to
interpret. The commenter recommended that leveraging key measures
already being used in various quality efforts, in addition to aligning
measures across public and private payers, could help reduce consumer
confusion. One commenter urged CMS to establish a Health Quality
Roadmap in reference to section 4 of the June 24, 2019 Executive Order
on Improving Price and Quality Transparency to establish common quality
measurements, align inpatient and outpatient measures, and eliminate
low-value or counterproductive measures. The commenter suggested that
quality and outcomes data is more valuable to patients than
transparency of hospital charges, arguing that they provide information
for patients to seek out providers with the best track record. The
commenter stated that providing data on readmissions, frequency or
revision surgery and mortality, and especially elective procedures such
as total joint arthroplasty, would encourage providers to use the best
protocols.
Several commenters indicated that information on provider referrals
as a required element would be necessary to decrease healthcare costs
and to shift consumers to lower cost and higher quality options. One
commenter stated that further outreach is necessary to determine what
kinds of price information and which methods of display would influence
consumer behavior.
As noted in section II.D.4 of this final rule, several commenters
supported including a definition of standard charges to reflect the
discounted cash price that would be given to a self-pay consumer and
the de-identified minimum and maximum negotiated charges because they
believe this
[[Page 65574]]
information would be beneficial and relevant to consumers. A few
commenters believed such standard charges could be confusing to
consumers.
Response: We recognize many state legislatures have undertaken
efforts to reduce surprise billing and applaud such efforts. We are
finalizing as proposed our requirement that hospitals make public and
display all ancillary items and services they provide with the primary
shoppable service as one of the required data elements. As part of our
requirements, hospitals would be required to display facilities fees
and fees for services of employed clinicians. However, in accordance
with our final policies for defining hospital items and services
(section II.C of this final rule) hospitals would not be required to
make public the professional fees for all clinicians practicing in
hospital-based clinics. We note that nothing in this rule would prevent
hospitals from undertaking disclosure charges for all clinicians
practicing in a hospital-based clinics, however, and encourage
hospitals to do so as a way of improving price transparency for
consumers.
We thank commenters for their interest in improving consumer
awareness of quality data. We agree that quality is a necessary
consideration for consumers deciding on how and where to obtain the
highest value medical items and services, however, section 2718(e) of
the PHS Act does not require hospitals to disclose quality information.
We note that comparative hospital quality information is readily
available to the public \160\ and that nothing in this final rule would
prohibit hospitals from posting quality information along with their
standard charge information. We further note that we included an RFI in
the CY 2020 OPPS/ASC proposed rule so as to gather feedback that we may
consider for our ongoing price transparency and value-based
initiatives.
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\160\ AHRQ website, Comparative Reports on Hospitals, at https://www.ahrq.gov/talkingquality/resources/comparative-reports/hospitals.html.
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Similarly, although data elements such as referrals, additional
places of service, availability of the provider for after-hours care,
and what form of payment the provider accepts are all important
considerations in driving improvements in value care, we believe
requiring hospital disclosure of these data elements is beyond the
scope of section 2718(e) of the PHS Act. In addition, we believe our
policies represent a balance between data elements that would be useful
for the public while being sensitive to hospitals' burden in meeting
requirements. We note, however, that nothing in this final rule would
prevent a hospital from displaying additional data elements it believes
the public would find useful.
Finally, we are making several modifications to the list of data
elements that hospitals would be required to make public for its
consumer-friendly display of standard charges.
First, we are modifying the list of data elements to align with and
include the three new types of standard charges we finalized in section
II.D of this final rule. Specifically, we will include the discounted
cash price, the de-identified minimum negotiated charge, and the de-
identified maximum negotiated charge, along with other necessary
conforming changes to the list of required data elements throughout.
Specifically, we are finalizing the following as data elements:
The payer-specific negotiated charge that applies to each
shoppable service (and corresponding ancillary services, as
applicable). We clarify that the hospital must identify and clearly
associate each set of payer-specific negotiated charges with the name
of the third party payer and plan. For example the hospital's list of
payer-specific negotiated charges for Payer X's Silver Plan could be in
one tab or column in a spreadsheet titled ``Payer X: Silver Plan''
while the list of payer-specific negotiated charges for Payer Y's Gold
Plan could be in another tab or column titled or labeled as ``Payer Y:
Gold Plan.''
The discounted cash price that applies to each shoppable
service (and corresponding ancillary services, as applicable). If the
hospital does not offer a discounted cash price for one or more
shoppable services (or corresponding ancillary services), the hospital
must list its gross charge.
The de-identified minimum negotiated charge that applies
to each shoppable service (and corresponding ancillary services, as
applicable).
The de-identified maximum negotiated charge that applies
to each shoppable service (and corresponding ancillary services, as
applicable).
Second, in the list of data elements related to the types of
standard charges, we are finalizing a few clarifying edits to ensure
hospital understanding that the requirement to display the standard
charge for a shoppable service applies to each primary shoppable
service and to each corresponding ancillary service (as applicable). In
other words, the display of standard charges for the shoppable service
grouping means display of each charge of the component parts of the
shoppable service grouping (for example, the hospital must list the
charge associated with the primary shoppable service plus the charge(s)
for each ancillary service not already included in the primary
shoppable service). In so doing, we are removing the separate
requirement to list all the associated ancillary services and instead
incorporating the requirement into the list of data elements related to
the types of standard charges.
Third, we are clarifying that if the hospital does not offer one or
more of the 70 CMS-specified shoppable services, the hospital must
clearly indicate that fact with respect to every type of standard
charge required for consumer-friendly display. The hospital may use
``N/A'' for the corresponding charge or use another appropriate
indicator to communicate to the public that the service is not provided
by the hospital. We are finalizing this requirement as a separate data
element.
Fourth, we are finalizing the requirement that the hospital include
a plain-language description of each shoppable service, as proposed.
For example, hospitals would not be required but are invited to review
and use, the Federal plain language guidelines.\161\ Fifth, we are
modifying the data element related to the location of each shoppable
service in light of the additional types of standard charges that
hospitals must list for the shoppable services to refer more broadly to
the ``standard charges'' rather than to ``payer-specific negotiated
charges'' in each instance it appears. Specifically, we are finalizing
that the location at which each shoppable service is provided by the
hospital (for example, Smithville Campus or XYZ Clinic), including
whether the standard charges for the shoppable service applies at that
location to the provision of that shoppable service in the inpatient
setting, the outpatient department setting, or both. If the standard
charge for the shoppable service varies based upon location or whether
the hospital provides the shoppable service in the inpatient versus the
outpatient setting, the hospital would be required to identify each set
of standard charges.
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\161\ See Federal plain language guidelines, available at
https://plainlanguage.gov/guidelines/.
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Finally, we are finalizing without modification the requirement to
display any primary code used by the hospital for purposes of
accounting or billing for the shoppable service and associated
ancillary services, including, but not limited to, the CPT code, the
HCPCS code, the DRG, or other commonly used
[[Page 65575]]
service billing code. We note that, as discussed in section II.F.3 of
this final rule, hospitals may use, as applicable, an appropriate
payer-specific billing code (for example, an APR-DRG code) in place of
the MS-DRG code indicated for the five procedures in the list of 70
CMS-specified shoppable services that are identified by MS-DRG codes
216, 460, 470, 473, and 743.
Comment: Several commenters raised concerns with the time, effort,
and technical challenges for hospitals of posting billing and charge
codes as part of the consumer-friendly display of standard charge data
for shoppable services. One commenter stated that the coding elements
and concepts required do not exist or are not maintained in hospital
chargemasters, but flow to posted charges through other interfaces.
Several commenters indicated they believed that the size and scope of
the data that would need to be presented would be quite large, with
commenters estimating that the resulting file could be 300 lines long
with dozens of columns or could lead to 100,000 rows of data with
millions of fields. One commenter indicated that the size and
complexity of the data might crash the hospital's website. One
commenter stated that in order to compile, display, and maintain
service packages for the select shoppable services, a sophisticated
relational database analysis with web-based display modules would be
necessary unless the hospital has existing software. Similarly, another
commenter stated that to comply with the new regulation, it would need
to work with its web development team and EHR management system vendor
to build a shopper functionality and benefits engine and hire
additional vendors to maintain functionality and accuracy. One
commenter recommended that CMS take additional time to ensure that
posting data for shoppable services is fairly applied across provider
types and does not require an abundance of resources. One commenter
stated that presenting their standard charge information in a consumer-
friendly manner would be difficult for hospitals, for example, rural
hospitals and CAHs that rely on cost-based reimbursement, that are
unable to afford a vendor for software that would aid in the posting of
standard charge data.
Response: We acknowledge that not all data elements required for
the display of hospital standard charges in a consumer-friendly manner
can be derived solely from a hospital's chargemaster. The set of
standard charges found in the hospital chargemaster are only one type
of standard charges--the gross charges--which are the undiscounted
rates for individual items and services; as pointed out by hospitals
that submitted comments in the FY 2019 IPPS/LTCH PPS (83 FR 41686
through 41688), the gross charge does not apply to most consumers of
hospital services, for example, consumers with third party payer
coverage. In other words, the gross charge is not a standard charge for
approximately 90 percent of the hospital's customers who have third
party payer coverage. The set of standard charges that applies to
consumers with third party payer coverage are the payer-specific
negotiated charges the hospital has established with the consumer's
third party payer. Such charges are not a part of the hospital's
chargemaster. Moreover, many payer-specific standard charges have been
negotiated for service packages, as opposed to individual items and
services that are listed in the hospital chargemaster. Thus, the data
elements required for making public standard charges in a consumer-
friendly manner will require hospitals to look beyond their
chargemasters and pull the relevant data out of their other accounting
and billing systems.
Additionally, we acknowledge that the benefits of compiling these
data elements and presenting them in a consumer-friendly manner will
likely require more thoughtful effort on the part of hospitals than
simply making all their standard charge information public in a
comprehensive machine-readable file. For example, identifying and
listing the standard charges for ancillary services along with the
primary shoppable service may take some thought and clinical input.
Translating internal code descriptions into a consumer-friendly plain-
language description for items and services provided by the hospital
may also require some thought. However, we disagree that consumer-
friendly display of hospital standard charge information would
overwhelm or ``crash'' a hospital's website, or that the requirements
would necessitate the development of an elaborate or expensive tool. As
suggested in section II.F.3 of this final rule, we believe there are
low-tech and inexpensive ways to compile hospital standard charge
information in files posted online that are consumer-friendly, and, in
Table 2, we have offered an example of how a hospital might consider
making such information public.
Additionally, we note that we are modifying our list of required
data elements to align with and reflect the final policies related to
the definition of ''standard charge'' as discussed in section II.D of
this final rule. As such, the list of data elements would include the
discounted cash price, the de-identified minimum negotiated charge, and
the de-identified maximum negotiated charge for each of the 300
shoppable services and their associated ancillary services.
Accordingly, and in light of comments, we have increased our burden
estimate (section V of this final rule) to reflect and recognize that
hospitals may need to put more time and thought into ensuring that
their standard charge information is presented in a consumer-friendly
manner than we initially believed and to account for posting additional
types of standard charges, specifically, the addition of the discounted
cash price and the display of the de-identified minimum negotiated
charge, and the de-identified maximum negotiated charge for each
shoppable service and corresponding ancillary services.
Final Action: We are specifying the data elements that hospitals
must include in their online posting of shoppable services in order to
ensure that consumers understand the hospital's standard charges for
each shoppable service and can use that information to make comparisons
across hospitals.
As noted in responses to comments, we are making several clarifying
edits and modifications to align with final policies including: (1)
Modifications to align with and include the three new types of standard
charges we are finalizing in section II.D of this final rule, (2) we
are removing the separate requirement to list all the associated
ancillary services and instead incorporating the requirement into the
list of data elements related to the types of standard charges, (3)
finalizing as a separate data element and clarifying that if a hospital
does not offer one or more of the 70 CMS-specified shoppable services,
the hospital must clearly indicate that fact with respect to every type
of standard charge required for consumer-friendly display, and (4)
modifying the data element related to the location of each shoppable
service in light of the additional types of standard charges that
hospitals must list for the shoppable services to refer more broadly to
the three types of standard charges referred to in the section, rather
than to ``payer-specific negotiated charges'' in each instance it
appears.
In summary, we are specifying in new 45 CFR 180.60(b) that
hospitals must include, as applicable, all of the following
corresponding data elements when displaying the three types of
[[Page 65576]]
standard charges for its list of shoppable services:
A plain-language description of each shoppable service.
An indicator when one or more of the CMS-specified
shoppable services are not offered by the hospital.
The payer-specific negotiated charge that applies to each
shoppable service (and to each ancillary service, as applicable). Each
list of payer-specific negotiated charges must be clearly associated
with the name of the third party payer and plan.
The discounted cash price that applies to each shoppable
service (and corresponding ancillary services, as applicable). If the
hospital does not offer a discounted cash price for one or more
shoppable services (or corresponding ancillary services), the hospital
must list its undiscounted gross charge.
The de-identified minimum negotiated charge that applies
to each shoppable service (and to each corresponding ancillary service,
as applicable).
The de-identified maximum negotiated charge that applies
to each shoppable service (and to each corresponding ancillary service,
as applicable).
The location at which the shoppable service is provided,
including whether the standard charges for the hospital's shoppable
service applies at that location to the provision of that shoppable
service in the inpatient setting, the outpatient department setting, or
both.
Any primary code used by the hospital for purposes of
accounting or billing for the shoppable service, including, as
applicable, the CPT code, the HCPCS code, the DRG, or other common
service billing code.
We note that, as discussed in section II.F.3 of this final rule,
hospitals may use, as applicable, an appropriate payer-specific billing
code (for example, an APR-DRG code) in place of the MS-DRG code
indicated for the five procedures in the list of 70 CMS-specified
shoppable services that are identified by MS-DRG codes 216, 460, 470,
473, and 743.
5. Format of Display of Consumer-Friendly Information
In the CY 2020 OPPS/ASC proposed rule, we indicated that we were
aware that many hospitals are already communicating charge information
to patients in a variety of ways. Some are already making public
various types of standard charges for shoppable services available
online in various formats. For example, some hospitals offer searchable
price transparency tools on their website that offer estimated charges
(averages or individualized out-of-pocket costs) or may display charges
for shoppable services in brochures (both online and offline) that
contain self-pay discounted prices for a service package. In the CY
2020 OPPS/ASC proposed rule, we indicated that we believed many
hospitals are already already meeting or exceeding our proposed
requirements by offering, for example, patient-friendly price
transparency tools that calculate individualized out-of-pocket cost
estimates. We sought comment on whether offering such tools could
qualify a hospital to be excepted from some of the proposed
requirements, for example, the consumer-friendly display requirements
(84 FR 39576).
We further noted in the CY 2020 OPPS/ASC proposed rule that because
there are a variety of consumer-friendly ways to display charges for
hospital services and because we did not want to restrict hospitals
from innovating or from having to duplicate efforts, we did not propose
to require hospitals to use a specific format for making such data
public online in a consumer-friendly manner. Specifically, unlike our
proposals for the comprehensive machine-readable list of standard
charges for all items and services (discussed in section II.E of this
final rule), we did not propose to require that hospitals make payer-
specific charge data public in a single digital file posted online.
Instead, we proposed that hospitals retain flexibility on how best to
display the payer-specific negotiated charge data and proposed
associated data elements to the public online, so long as the website
is easily accessible to the public. We indicated that we believed this
approach would permit some flexibility for hospitals to, for example,
post one or more files online with a list of payer-specific charges for
the shoppable services and associated data elements, or, for example,
to integrate such data into existing price estimate tools.
Additionally, we did not propose, but considered, an option that
would require hospitals to make these data available in API format. As
explained in more detail in section II.E.3. of this final rule, an API
enabled format could allow consumers to access the data by searching
for it directly when they do not have a computer by, for example,
putting a CPT code in the URL path of the hospital to render in one's
mobile phone browser the gross or payer-specific negotiated charge for
the service. For example, a consumer searching for the price of a blood
test for cholesterol (CPT code 80061) at fictional hospital ABC could
look it up by inserting the URL path https://hospitalABC.com/api/80061.
We further recognized not all consumers have access to the
internet. Therefore, we proposed to require that hospitals make certain
data elements available in a consumer-friendly manner offline (84 FR
39589 through 39590). Specifically, we proposed that the hospital would
provide a paper copy (for example, a brochure or booklet) of the
information to consumers upon request within 72 hours of the request.
We proposed to codify this provision at proposed new 45 CFR 180.60(c).
Comment: A few commenters expressed concern that the proposal did
not provide hospitals adequate specificity as to how the data should be
formatted to ensure that information is meaningful and presented in a
consumer-friendly manner.
A few commenters indicated that the requirement to provide to the
patient ``a paper copy (for example, a brochure or booklet)'' of the
information is available to consumers upon request within 72 hours of
the request'' would be challenging to implement because it would be
costly and time consuming, and the volume of data would be enormous.
Two commenters suggested hospitals should be able to charge a fee to
cover the costs of printing a paper copy. One commenter suggested that
if individuals do not have access to internet, public libraries provide
free internet access to patrons. Two commenters suggested that CMS
should permit hospitals to limit the size and contents of the patient-
requested paper equivalent (for example, limiting the response to the
payer-specific negotiated charges that apply to the individual's
circumstances).
Response: In the CY 2020 OPPS/ASC proposed rule we indicated that,
because there are a variety of consumer-friendly ways to display
charges for hospital services and because we did not want to restrict
hospitals from innovating or from having to duplicate efforts, we did
not propose to require hospitals to use a specific format for making
such data public online in a consumer-friendly manner. We therefore
proposed and are finalizing a policy that hospitals retain flexibility
on how best to display their standard charge data and proposed
associated data elements to the public in a consumer-friendly manner
online, so long as the online information is easily accessible to the
public. We continue to believe that this approach would permit some
flexibility for hospitals to, for example, post one or more files
online with a list of payer-specific charges for
[[Page 65577]]
the shoppable services and associated data elements, or, for example,
to integrate such data into existing price estimate tools. We have
included a sample template in Table 2 as an example of the format that
would meet our requirements, although hospitals are not required to use
this template.
Additionally, in light of our final policy to permit hospitals
flexibility to choose an appropriate format, we are not finalizing the
proposal that the hospital make available a paper copy. We generally
agree with commenters who indicated that a paper format could be
burdensome, however, if we determine that lack of a paper copy of
hospital standard charges is preventing consumers from accessing
hospital charge information, we may revisit this in future rulemaking.
Comment: Commenters stated that they were concerned that consumer-
friendly display of standard charges for shoppable services might not
provide the consumer with sufficient understanding of their actual
costs, with several commenters expressing concern that the payer-
specific negotiated charge would differ significantly based on the
severity of the patient's condition, leading to variation between the
amount displayed in a consumer-friendly format and the amount received
by the hospital from the third-party payer. Because of this, commenters
suggested that, in order to display standard charges in a ``consumer-
friendly'' format, the information must include data on out-of-pocket
costs, with several commenters stating that this information should be
specific to the individual's health insurance plan.
Response: We recognize the need and desire for consumers to
anticipate their out-of-pocket costs. We believe understanding the
payer-specific negotiated charge is a necessary first step towards
consumers having insight into the cost of their healthcare and being in
a better position to choose the healthcare coverage and setting that is
most advantageous to them. We expect consumers will use the hospital
standard charge information in conjunction and communication with their
providers and carriers to understanding their unique cost sharing
obligations. Further, we agree that a consumer-friendly online display
of shoppable services that would return an immediate out-of-pocket
price estimates is preferable to a flat file of standard charges posted
online. For this reason we considered and are finalizing as described
in more detail below, a policy to deem a hospital price estimator tool
as meeting some of the requirements under 45 CFR 180.60. We agree with
commenters who indicated that sometimes circumstances during the course
of treatment can alter price estimates and because of this we encourage
hospitals to continue to engage in patient education, communication,
and heightened transparency regarding the cost estimates they provide.
We further emphasize that hospitals are not precluded from
providing customized one-on-one financial counseling to consumers, and
we applaud hospitals that take the additional step to provide this
information to consumers on an individual basis through financial
counseling in addition to meeting the posting requirements for the
public files.
Comment: Many commenters indicated that many hospitals are already
communicating financial obligations to consumers in advance in a
variety of consumer-friendly ways. For example, several commenters
stated that many hospitals provide good faith estimates, financial
counseling services, or have available call centers and/or patient-
friendly pricing tools on their websites for use by patients. A few
commenters asserted that providing patient-specific estimates, such as
a patient's likely out-of-pocket costs based on data provided by the
patient's insurer, is more helpful to consumers than sharing charges
online as proposed because such information is personalized based on
individual circumstances.
Some commenters specifically requested relief from one or more of
the requirements under this rule as a result of hospital efforts to
communicate personalized out-of-pocket information. Specifically, a few
commenters suggested that hospitals that already provide internet-based
price estimator tools or good faith estimates to consumers (for
brevity, we henceforth refer to such an application as a price
estimator tool) be exempt from the requirements of the rule. For
example, one commenter suggested that if hospitals offer tools that
allow patients to obtain out-of-pocket estimates for 300 shoppable
services (including the 70 specified by CMS), they should be considered
to have met their obligations under the rule. This commenter further
suggested that CMS could set the expectation that hospitals opting for
this approach provide estimates for all payers with which they have
negotiated rates. A few commenters suggested that this flexibility to
provide consumer-friendly charge information in this manner would be
beneficial for reasons such as mitigating the risk of disclosure of
data that some regard as trade secret or confidential while providing
the same baseline information (gross charges) as required under the
rule as well as more accurate information about patients' out of cost
based on personalized estimates from their plan specific information.
Other commenters explained that a price estimator tool that provides
meaningful cost information to patients would be more useful to
patients than voluminous data sets. One commenter specifically
requested that no hospital offering a pricing tool should be exempted
from releasing the comprehensive machine-readable data.
A few commenters noted that there are potential limitations
associated with the information a patient receives through consumer-
friendly pricing tools because providers cannot always estimate what
services a patient will need, how they will respond to treatment, and
whether complications as a result of co-morbidities or other issues
will arise that would require additional services. For example, one
commenter noted that accurate price estimation may depend on data
elements such as payer coverage/benefit information, hospital/payer
contract information, physician order and diagnosis, which may be
contained in the hospital's EHR system.
Some commenters that supported an exemption for hospitals that have
established a price estimator tool, indicated that if adopted, CMS
should specify what qualifies as an acceptable price estimator tool and
made specific suggestions for tool functionality, although in some
cases these suggestions were made in the context of price estimator
tools that could be offered by health insurers rather than hospitals.
Suggestions for consumer-friendly tool functionality included:
Provide users with an estimate of the overall cost and the
out-of-pocket costs, including out-of-pocket costs based on an
individual's insurance policy.
Notify user of the availability of financial aid, payment
plans, and assistance in enrolling for Medicaid or state program.
Include a disclaimer about the limitation of the
estimation, such as to advise the user to consult with their health
insurer to confirm individual payment responsibilities, such as
remaining deductible balances.
Indicate quality of care in the healthcare setting.
Do not require PII; users would not be required to use any
form of account, username, or password to use the price estimator tool.
[[Page 65578]]
Make estimates available in English, Spanish, and other
languages as preferred.
Offer an ad hoc service where a patient can obtain a cost
estimate telephonically and/or via email.
Be prominently featured on the hospital home page, and use
plain and obvious language to help ensure that consumers can find it.
Hospitals should advertise this tool to patients and
generate interest.
Several commenters generally encouraged CMS to take steps to
facilitate the development and voluntary adoption of price estimator
tools by convening stakeholders, including the Departments of Labor and
Treasury, to identify best practices, recommending minimum standards
for common features, and developing solutions to common technical
barriers.
Response: We appreciate commenters' careful consideration of and
detailed suggestions for an approach for regarding hospitals as having
met the requirement for making public their standard charge information
in a consumer-friendly manner. In the CY 2020 OPPS/ASC proposed rule,
we noted that as a result of the January 1, 2019 update to our
guidance, we received feedback that long lists of charges in a file
posted online in a machine-readable format may not be immediately or
directly useful for many healthcare consumers because the amount of
data could be overwhelming or not easily understood by consumers. We
further recognized in the CY 2020 OPPS/ASC proposed rule that hospital
standard charges, while necessary for consumers to understand their
potential out-of-pocket obligations, are not sufficient in and of
themselves. In section II.D of this final rule, we stated that we
agree, for example, that the payer-specific negotiated charge does not,
in isolation, provide a patient with an individualized out-of-pocket
estimate. We referred to the GAO report \162\ we described in the CY
2020 OPPS/ASC proposed rule which supports our assertion that payer-
specific negotiated charges are a critical piece of information
necessary for patients to determine their potential out-of-pocket cost
obligations. In other words, in order for an insured individual to
determine an out-of-pocket estimate in advance of committing to a
healthcare service with a particular provider, the insured individual
must have several data points including the total charge (which is the
payer-specific negotiated charge) for the item or service and their
particular benefits under their insurance plan (for example, their co-
pay or deductible) in order to determine their personalize out-of-
pocket obligation. More often than not, patients see all this
information after the service has been provided in the form of their
EOBs. As explained in II.D of this final rule, EOBs are designed to
communicate provider charges and resulting patient cost obligations,
taking third party payer insurance into account. The payer-specific
negotiated charge is a critical data point found on patient's EOB. We
further explained that when a consumer has access to payer-specific
negotiated charge information prior to receiving a healthcare service
(instead of sometimes weeks or months after the fact when the EOB
arrives), in combination with additional information from payers, it
can help the patient estimate his or her potential out-of-pocket cost.
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\162\ GAO. Health Care Price Transparency: Meaningful Price
Information Is Difficult for Consumers to Obtain Prior to Receiving
Care. Publicly released October 24, 2011. Available at: https://www.gao.gov/products/GAO-11-791.
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Because of this, in the CY 2020 OPPS/ASC proposed rule, we
considered ways of requiring or encouraging hospitals to make public
standard charges for frequently provided services in a form and manner
that would be more directly accessible and consumer friendly.
Therefore, in addition to including all their standard charges for all
items and services in the machine-readable file, we proposed that
hospitals must make public their payer-specific negotiated charges for
common services for which consumers may have the opportunity to shop,
in a consumer-friendly manner. The intent of these provisions was to
ensure that the hospital standard charges made public in the
comprehensive machine-readable file would be more accessible to the
average consumer so that consumers could use the information, combining
it with additional necessary benefit information from their insurer, to
estimate their individual out-of-pocket cost obligations in advance of
receiving a healthcare service from the hospital.
We are persuaded by commenters' suggestions that some hospitals
offering online price estimator tools that provide real-time
individualized out-of-pocket cost estimates should receive
consideration and potential relief from some of the requirements for
making public standard charges, particularly as it relates to our
intent and goals for requiring that hospitals communicate their
standard charges in a consumer-friendly manner. We believe voluntarily
offering an online price estimator tool has merit because the hospital
standard charges as defined in this final rule are used to develop the
individual's out-of-pocket estimate in an even more consumer-friendly
way than what we proposed within the limits of our statutory authority.
We believe that price estimator tools pick up where our rule ends and
take the additional steps that would otherwise be required by the
consumer to determine their individualized out-of-pocket by combining
hospital standard charge information with the individual's benefit
information directly from the insurer. Thus, although some hospital
price estimator tools may not display standard charge information in
the consumer-friendly manner in the precise ways we proposed and are
finalizing under this rule, they do appear to accomplish the goal and
intent of ensuring such information is available in a consumer-friendly
manner for purposes of individuals to directly determine their specific
out-of-pocket costs in advance of committing to a hospital service.
Thus, we believe it is possible that hospitals with price estimator
tools could be considered as having accomplished the goals we intended
to achieve by requiring hospitals to repackage and display their
standard charge information for common shoppable services in a
consumer-friendly manner. We emphasize, however, that hospitals would
still be required to publish all standard charges in a machine-readable
file consistent with the requirements we finalize in section II.E of
this final rule.
We are finalizing, as modifications to our proposal, in a new 45
CFR 180.60, that a hospital may voluntarily offer an internet-based
price estimator tool and thereby be deemed to have met our requirements
to make public its standard charges for selected shoppable services in
a consumer-friendly manner. We believe this accommodation is responsive
to comments indicating that the requirements to make public shoppable
services in a consumer-friendly format are duplicative of efforts by
hospitals that offer individualized internet-based price estimator
tools.
We considered the minimum necessary functionality requirements a
price estimator tool must embody to satisfy this new policy. As
reflected in the comments we received on this topic, we recognize that
different hospitals may maintain different types of internet-based
healthcare cost price estimator tools, and that the market for, and
technology behind, these applications is growing. Therefore, we believe
it is important to ensure there is flexibility for the data elements,
format, location and accessibility of a price estimator tool that would
be considered to meet the requirements of 45 CFR 180.60. We
[[Page 65579]]
believe that the requirements we are establishing in this final rule,
for certain minimum data and functionality of a price estimator tool
for purposes of meeting the requirements under new 45 CFR 180.60, are a
starting point. We appreciate and will consider the commenters'
suggestions that we seek stakeholder input for future considerations
related to the price estimator tool policies we are finalizing,
including to identify best practices, common features, and solutions to
overcoming common technical barriers.
Therefore, we are finalizing a modification to our proposed policy
to specify in new 45 CFR 180.60(a)(2) that a hospital that maintains an
internet-based price estimator that meets certain criteria is deemed to
have met our requirements at 45 CFR 180.60. The price estimator tool
must:
Allow healthcare consumers to, at the time they use the
tool, obtain an estimate of the amount they will be obligated to pay
the hospital for the shoppable service.
Provide estimates for as many of the 70 CMS-specified
shoppable services that are provided by the hospital, and as many
additional hospital-selected shoppable services as is necessary for a
combined total of at least 300 shoppable services.
Is prominently displayed on the hospital's website and be
accessible without charge and without having to register or establish a
user account or password.
To be clear, we believe that a price estimator tool would be
considered internet-based if it is available on an internet website or
through a mobile application. We considered the additional suggestions
by commenters related to ensuring that price estimator tools are
consumer-friendly. In our review of available online price estimator
tools offered by hospitals, we observed that their look and feel are
not uniform, so, in this final rule, and so as not to be overly
proscriptive or restrict innovation, we are not at this time finalizing
a specific definition of a consumer-friendly format for price estimator
tools or any additional criteria. However, we encourage hospitals to
take note of current estimator tool best practices and seek to ensure
the price estimator tools they offer are maximally consumer-friendly.
For example, we encourage, but will not require in this final rule,
that hospitals provide appropriate disclaimers in their price estimator
tools, including acknowledging the limitation of the estimation and
advising the user to consult, as applicable, with his or her health
insurer to confirm individual payment responsibilities and remaining
deductible balances. Similarly, we encourage, but do not require in
this final rule, that hospital pricing tools include: (1) Notification
of the availability of financial aid, payment plans, and assistance in
enrolling for Medicaid or a state program, (2) an indicator for the
quality of care in the healthcare setting, (3) and making the estimates
available in languages other than English, such as Spanish and other
languages that would meet the needs of the communities and populations
the hospital serves.
We note that although we decline to be more prescriptive at this
time, we may in the future revisit our policy to deem hospital online
price estimator tools as having met requirements if we determine such
tools are not meeting our goals for making hospital charge information
meaningful to consumers. We further note that a hospital that meets the
requirements for offering an internet-based price estimator tool would
still be required to make public all standard charges for all hospital
items and services online in a comprehensive machine-readable format as
discussed in section II.E of this final rule and finalized under 45 CFR
180.50.
Comment: A few commenters addressed monitoring and oversight of
price transparency tools. For example, one commenter suggested that
CMS, or another federal agency, establish standards and require certain
disclosures for software application developers of consumer-facing
platforms for hospital standard charge data. This commenter expressed
concern about consumers losing faith in cost transparency tools as they
begin interacting with them, stemming from consumer-facing platforms
that are not presenting information accurately or not using information
appropriately.
Another commenter suggested that standards must be in place for CMS
to monitor and evaluate the impacts of price transparency tools, to
help ensure there are not unintended effects, and to identify best
practices. The commenter suggested that this includes developing a
better understanding of any potential misinterpretations of the data by
patients, as well as the extent to which hospitals may misrepresent
rates.
Response: For purposes of implementing section 2718(e) of the PHS
Act, we will monitor and enforce compliance with the requirements to
make public standard charges (as described in section II.G. of this
final rule). This will include ensuring that hospitals have made public
their standard charges in both ways required under these rules.
Specifically, we will monitor to ensure that hospitals have made public
all their standard charges for all items and services they provide in a
comprehensive online machine-readable file format and have either made
public standard charges for shoppable services in a consumer-friendly
format (according to the requirements at 45 CFR 180.60), or have
voluntarily offered an online price estimator tool. Although comments
suggesting that CMS impose monitoring or enforcement efforts on
software application developers are beyond the scope of the standard
charge disclosure requirements we proposed, and that we are finalizing
at new 45 CFR part 180 as discussed in this final rule, we note that
HHS has ongoing efforts to improve health information exchange
including through the ONC \163\ and recently promulgated proposed
interoperability rules designed to expand access to health information
and improve the seamless exchange of data in healthcare.\164\
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\163\ HealthIT.gov website, Laws, Regulation, and Policy, at
https://www.healthit.gov/topic/laws-regulation-and-policy.
\164\ CMS.gov website, Interoperability, at https://www.cms.gov/Center/Special-Topic/Interoperability-Center.html.
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Final Action: We are finalizing as proposed to specify in new 45
CFR 180.60(c) that hospitals retain flexibility on how best to display
to the public online their standard charges in a consumer-friendly
manner, so long as the website is easily accessible to the public.
Based on the comments received, we are not finalizing our proposal
to require that hospitals provide a paper copy (for example, a brochure
or booklet) of information on consumer-friendly shoppable services to
consumers upon request within 72 hours of the request.
We are finalizing a modification to our proposal at new 45 CFR
180.60(a)(2) to specify that a hospital is deemed by CMS to meet the
requirements of 45 CFR 180.60 if the hospital maintains an internet-
based price estimator tool which meets the following requirements:
Provides estimates for as many of the 70 CMS-specified
shoppable services that are provided by the hospital, and as many
additional hospital-selected shoppable services as is necessary for a
combined total of at least 300 shoppable services.
Allows health care consumers to, at the time they use the
tool, obtain an estimate of the amount they will be obligated to pay
the hospital for the shoppable service.
[[Page 65580]]
Is prominently displayed on the hospital's website and
accessible to the public without charge and without having to register
or establish a user account or password.
6. Location and Accessibility Requirements
Additionally, we proposed that hospitals make the data elements
proposed in section XVI.F.4. of the CY 2020 OPPS/ASC proposed rule (84
FR 39589 through 39590) public online in such a way that the standard
charges and associated data elements could be easily located and
accessed by consumers.
First, we proposed that a hospital would have discretion to select
an appropriate internet location to post the standard charge
information required under this section (that is, the payer-specific
charges for shoppable services and associated data elements). We
further proposed that the website location be publicly available, that
the data be displayed prominently and clearly identify the hospital
location with which the standard charge information is associated, and
that the standard charge data be easily accessible, without barriers,
and that the data could be digitally searched. For purposes of the
proposed requirements: (1) ``displayed prominently'' meant that the
value and purpose of the web page \165\ and its content \166\ is
clearly communicated, there is no reliance on breadcrumbs \167\ to help
with navigation, and the link to the standard charge information is
visually distinguished on the web page; \168\ (2) ``easily accessible''
meant that standard charge data are presented in format that is
searchable by service description, billing code, and payer, and that
the standard charge data posted on the website can be accessed with the
fewest number of clicks; \169\ and (3) ``without barriers'' meant the
data can be accessed free of charge, users would not have to input
information (such as their name, email address, or other PII) or
register to access or use the standard charge data. We proposed to
codify this requirement at proposed new 45 CFR 180.50(d).
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\165\ https://webstandards.hhs.gov/guidelines/49.
\166\ Nielsen J. (2003, November 9). The ten most violated
homepage design guidelines. Alertbox. Available at: https://www.useit.com/alertbox/20031110.html.
\167\ https://webstandards.hhs.gov/guidelines/78.
\168\ https://webstandards.hhs.gov/guidelines/88.
\169\ https://webstandards.hhs.gov/guidelines/181.
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We encouraged hospitals to review the HHS Web Standards and
Usability Guidelines (available at: https://webstandards.hhs.gov/),
which are research-based and are intended to provide best practices
over a broad range of web design and digital communications issues.
We sought comment on these proposed location and accessibility
requirements, including whether there were additional requirements that
should be considered to ensure public access to payer-specific
negotiated charges for shoppable services.
Comment: Several commenters noted the importance of making the
information easily accessible and consumer-friendly. Specifically, a
few commenters noted that it is important for hospitals to make this
information easy or intuitive for lay-people to find on the websites.
Other commenters made recommendations for requirements related to
accessibility of consumer-friendly hospital charge information such as:
Display on the website home page and clear indicators such
as ``Price Check'' or ``Cost Estimator'' in the text for the link,
rather than terms like ``Tools and Resources.''
Conform with American with Disabilities Act (ADA)
accessibility standards.
Make information available in multiple languages based on
the hospital's population.
One commenter noted that rural consumers have less access to
broadband, making it more difficult for them to access this information
online. One commenter recommended that public outreach efforts, content
generation, and coordination with existing user channels are needed to
educate and engage audiences.
Response: We thank commenters for their suggestions and agree that
hospitals should seek to make their standard charge information easy or
intuitive for lay-people to find on their websites. We would expect
hospitals to post information in a format accessible to people with
disabilities or to otherwise ensure that individuals with disabilities
can readily access hospital standard charge information, in accordance
with applicable federal or state laws.\170\ We encourage hospitals to
post this information in a language and manner that is consumer-
friendly for their specific markets and to use terms to refer to their
standard charge information that are clear indicators. While we are not
finalizing any specific requirements related to either of these two
issues at this time, we will continue to consider these suggestions,
and should the information prove to be difficult to find or access, we
may revisit these in future rulemaking.
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\170\ The Americans with Disabilities Act, the Rehabilitation
Act and the ACA (see 45 CFR 92.202) require auxiliary aids and
services when needed to communicate effectively with people with
disabilities. https://www.ada.gov/effective-comm.pdf.
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Regarding the concern related to rural consumers being able to
access online hospital charge information, we note that in July 2019,
the Federal Communications Commission authorized $524 million in
funding over the next decade to expand broadband to unserved rural
homes and businesses.\171\ We agree that the availability of hospital
charge information as a result of these final rules should be widely
publicized. We plan to engage in communicating and publicizing these
final rules and encourage other interested stakeholders to engage in
communications strategies to enhance public awareness of the
availability of hospital standard charge information.
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\171\ FCC. FCC Authorizes $524 Million for Rural Broadband
Expansion in 23 States. News Release, July 15, 2019. Available at:
https://www.fcc.gov/document/fcc-authorizes-524-million-rural-broadband-expansion-23-states.
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Comment: One commenter agreed that CMS' proposed location,
accessibility, and technical requirements would allow patients to
easily access standard charge information for shoppable services. A few
other commenters expressed that being able to access standard charge
information should be like comparing prices for groceries. One
commenter suggested that hospitals clearly link the consumer-friendly
list of shoppable services with the comprehensive machine-readable file
of all items and services. A few commenters suggested that there be a
standardized CMS file and web page format for displaying standard
charges for shoppable services, arguing this would more easily enable
cost comparisons across different facilities.
Response: We appreciate commenter's support for our location and
accessibility requirements and are finalizing them as proposed. We
agree with commenters who believe that comparing prices for healthcare
services should be as transparent as comparison pricing in other
industries. We will continue to consider whether and how best to link
the comprehensive machine-readable file and the consumer-friendly
display of shoppable services. We agree that an exemplar template (not
one that we will presently require) would be beneficial to help
standardize format for displaying charges for shoppable services in a
consumer-friendly format, and we have included such examples in this
final rule. However, as explained in II.F.5 of this final rule, we
believe
[[Page 65581]]
hospitals should retain flexibility to determine a format that displays
charges for their shoppable services in a consumer-friendly manner.
Comment: A few commenters suggested that patients needed to be able
to access standard charge information for shoppable services through a
secure portal that is password protected, and that the secure portal be
tied to their actual health plan coverage while minimizing the risk
that other providers will demand higher rates from payers.
Response: We thank the commenters for their recommendation.
However, in the interest of keeping access to the consumer-friendly
display of shoppable services barrier-free, we disagree with requiring
hospitals to develop a secure portal. As part of the requirements for
making standard charges public, hospitals would not post any PII to the
internet and consumers would not be asked to provide any in order to
view payer-specific negotiated charges.
Final Action: We are finalizing with technical modification our
requirements for location and accessibility of information on consumer-
friendly shoppable services. Specifically, we are finalizing with
modification that a hospital must select an appropriate publicly
available internet location for purposes of making public the standard
charge information for shoppable services in a consumer-friendly
format.
We are also finalizing with technical modification that the
information must be displayed in a prominent manner that identifies the
hospital location with which the standard charge information is
associated.
Finally, we are finalizing with technical modification the
shoppable services information must be easily accessible, without
barriers, including, but not limited to, ensuring the information is:
(i) Free of charge; (ii) accessible without having to register or
establish a user account or password; (iii) accessible without having
to submit PII; (iv) searchable by service description, billing code,
and payer. We note that we would expect hospitals would post
information in a format accessible to people with disabilities or to
otherwise ensure that individuals with disabilities can readily access
hospital standard charge information, in accordance with any applicable
federal or state laws.
These final provisions are specified in new 45 CFR 180.60(d).
7. Frequency of Updates
The statute requires hospitals to establish, update, and make
public their standard charges for each year. Therefore, we proposed to
require hospitals to make public and update the standard charge
information proposed in section XVI.F.2 (84 FR 39585 through 39586) at
least once annually (proposed new 45 CFR 180.60(e)). We recognized that
hospital charges may change more frequently and therefore we encouraged
(but are not requiring) hospitals to update this file more often, as
appropriate, so that the public may have access to the most up-to-date
charge information. We also recognized that hospitals update their
charges at different times during the year and may also have various
State price transparency reporting requirements that require updates.
For purposes of these requirements, we believe that updates that occur
at least once in a 12-month period will satisfy our proposed
requirement to update at least once annually and reduce reporting
burden for hospitals. In other words, the hospital could make public
and update its list of standard charges at any point in time during the
year, so long as the update to the charge data occurs no more than 12
months after posting.
We also proposed to require hospitals to clearly indicate the date
of the last update they have made to the standard charge data, with
some discretion as to where the date of late update is indicated.
Comment: A few commenters disagreed that annually updating the
display of standard charges in the consumer-friendly format would be
sufficient to keep consumers apprised of costs. Commenters recommended
more frequent updates, citing frequent changes in commercial payer
rates. One commenter recommended requiring hospitals to update this
information in real time to avoid the possibility of misleading
patients with calendar-related gaming around the disclosure of rate
hikes or true prices.
Response: We appreciate the commenters' concerns and we agree that
timely updates are an important aspect of keeping information relevant
to consumers and avoiding confusion, but we believe the plain language
of section 2718(e) of the PHS Act currently limits the requirement to
make standard charges public to once annually. We strongly support and
encourage hospital efforts to make more frequent updates to the
standard charge information they make public online.
Final Action: We are finalizing as proposed a policy to require
hospitals to make public and update the standard charge information at
least once annually (proposed new 45 CFR 180.60(e)). We are also
finalizing as proposed a requirement that the hospital clearly indicate
the date that the information was most recently updated. Hospitals
would have some discretion as to where the date of late update is
indicated.
G. Monitoring and Enforcement of Requirements for Making Standard
Charges Public
1. Background
Section 2718(b)(3) of the PHS Act requires the Secretary to
promulgate regulations to enforce the provisions of section 2718 of the
PHS Act, and, in so doing, the Secretary may provide for appropriate
penalties. As such, we proposed that we may impose penalties on
hospitals that fail to make their standard charges public in accordance
with the requirements we finalize under section 2718(e) of the PHS Act.
In the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20549), we sought
public comments on a variety of issues related to enforcement of the
requirement that hospitals make public their standard charges and noted
our intent to address enforcement and other actions to ensure
compliance in future rulemaking.
We specifically sought comments on the following:
What is the most appropriate mechanism for CMS to enforce
price transparency requirements?
Should CMS require hospitals to attest to meeting
requirements in the provider agreement or elsewhere?
How should CMS assess hospital compliance?
Should CMS publicize complaints regarding access to price
information or review hospital compliance and post results? What is the
most effective way for CMS to publicize information regarding hospitals
that fail to comply?
Should CMS impose CMPs on hospitals that fail to make
standard charges publicly available as required by section 2718(e) of
the PHS Act?
Should CMS use a framework similar to the Federal civil
penalties under 45 CFR 158.601 through 158.615, that apply to issuers
that fail to report information and pay rebates related to medical loss
ratios (MLRs), as required by sections 2718(a) and (b) of the PHS Act,
or would a different framework be more appropriate?
As described in the CY 2020 OPPS/ASC proposed rule (84 FR 39591),
we received a number of comments in response to this RFI. Many
commenters agreed that enforcing this requirement under section 2718(e)
of the PHS Act would send an important signal that CMS values
transparency and ensure that the public has access to hospital charge
information. Some commenters
[[Page 65582]]
suggested that CMS model enforcement after various quality reporting
programs, such as the Hospital Inpatient and Outpatient Quality
Reporting Programs or the LTCH Quality Reporting Program. Some
commenters recommended publicizing noncompliant hospitals or providing
a mechanism for the public to file complaints against noncompliant
hospitals. Some commenters suggested that CMS propose to make the
publication of standard charges a Medicare condition of participation
or provider enrollment. However, one commenter indicated that revoking
a provider agreement over lack of a website disclosure would be
unnecessarily punitive. Other commenters warned that subjecting
hospitals violating pricing transparency provisions to compliance
actions could pose a challenge, particularly for smaller hospitals, and
recommended limiting or deferring compliance actions to a later date.
Some commenters agreed that imposing monetary penalties on noncompliant
hospitals was appropriate, while other commenters believed that CMS
does not have authority to enforce section 2718(e) of the PHS Act and,
for that reason, should not adopt penalties for noncompliance.
We stated in the CY 2020 OPPS/ASC proposed rule that we agree with
commenters who noted that an enforcement regime signals the value we
place on price transparency and assurance of public access to hospital
standard charges. We interpret section 2718(b)(3) of the PHS Act as
authorizing us to enforce the provisions of section 2718(e). Therefore,
we proposed to adopt mechanisms to monitor and enforce our requirements
for making standard charges public.
2. Monitoring Methods
Section 2718(e) of the PHS Act requires hospitals to make public
their list of standard charges and authorizes the Secretary to
promulgate additional criteria that hospitals must satisfy in order to
make such charges public. The statute does not prescribe monitoring
procedures or the factors we should consider in imposing penalties on
hospitals for noncompliance. Based on our experience with the Medicare
program and healthcare marketplace plans, we believe it is important
for the public to be informed, and, therefore, for CMS to ensure
compliance with this statutory requirement. Therefore, we proposed to
employ methods to monitor and assess hospital compliance with section
2718(e) of the PHS Act, and specifically proposed new 45 CFR 180.40,
180.50, and 180.60.
In general, we proposed that CMS may use methods to monitor
hospital compliance with the requirements under proposed 45 CFR part
180. As explained in the CY 2020 OPPS/ASC proposed rule, we anticipate
relying predominantly on complaints made to CMS by individuals or
entities regarding a hospital's potential noncompliance. Therefore, we
proposed that our monitoring methods may include, but are not limited
to, the following, as appropriate:
CMS' evaluation of complaints made by individuals or
entities to CMS.
CMS review of individuals' or entities' analysis of
noncompliance.
As we gain experience with monitoring compliance with the
requirements for proposed 45 CFR part 180, we may consider self-
initiating audits of hospitals' websites as a monitoring method.
Therefore, we proposed that our monitoring methods may include CMS
audit of hospitals' websites.
We proposed to set forth these monitoring methods in the
regulations at proposed new 45 CFR 180.70.
Comment: A few commenters suggested that the monitoring and
enforcement requirements for making standard charges public should be
well defined and robust. A few commenters agreed with CMS' proposal to
rely mainly on complaints made to CMS by individuals or entities
regarding a hospital's noncompliance, as well as CMS audits of
hospitals' websites. One commenter stated that the proposed approach
seems reasonable and that the monitoring methods and proposed actions
to address noncompliance are appropriately varied and iterative.
A commenter suggested that positive and effective enforcement is
needed, such as encouraging community policing efforts that strive for
prevention of a problem, and believes this approach could create a more
transparent hospital reimbursement system for the public.
A few commenters suggested that the burden of monitoring and
enforcement may outweigh its benefits, and one commenter suggested that
CMS withdraw altogether its proposed price transparency requirements,
including the enforcement processes and CMPs for noncompliance, because
of concerns about additional costs of compliance the proposed price
transparency policies pose for financially fragile rural safety net
providers, in particular Medicare Dependent Hospitals, Rural Referral
Centers, and SCHs. One commenter stated that monitoring is a
purposeless task.
Response: We appreciate the support of commenters favoring the
proposed approach to monitoring for compliance with the requirements
for hospitals to make public standard charges. We disagree with the
notion, expressed by one commenter, that monitoring hospitals for
compliance with these price transparency disclosure requirements is a
purposeless task and that its potential burden outweighs its potential
benefits. We do, however, appreciate commenters' concerns about the
potential additional burden that monitoring activities may pose for
hospitals, though we do not believe the monitoring burden will impact
hospitals unless they are not in compliance with the requirements.
We decline to altogether forgo enforcement processes and CMPs for
noncompliance as suggested by one commenter. We believe that
enforcement of the policies is vital to ensuring that hospitals comply
with the requirements to make public standard charges. Given the
importance of ensuring that patients have access to data they need to
make informed healthcare decisions, we believe monitoring hospitals'
compliance with the requirements of new 45 CFR part 180 is critical.
Therefore, we are finalizing our proposed monitoring methods. Further,
we believe it is important to consistently apply the monitoring and
enforcement provisions across all entities that meet the definition of
``hospital'' that we are finalizing (as discussed in section II.B.2 of
this final rule), regardless of factors such as hospital size, revenue,
or location.
In response to the commenter suggesting a community policing
approach that strives for prevention of compliance problems, we note
that the monitoring methods we are finalizing here include CMS'
reliance on receipt of complaints made by individuals or entities to
help inform CMS of potential issues so that CMS may initiate its own
analyses, or CMS review of individuals' or entities' analysis of
noncompliance. Further actions to address hospital noncompliance as
described in section II.G.3 of this final rule include CMS' issuance of
a written warning notice to a noncompliant hospital and CMS' requests
for a CAP from a hospital in the event its noncompliance constitutes a
material violation of one or more requirements. This approach
contemplates that noncompliant hospitals will be offered opportunities
to come into compliance with the requirements prior to the imposition
of a CMP. Further, we note that these final policies do not preclude
individuals or entities from raising their compliance concerns directly
with hospitals, and for
[[Page 65583]]
hospitals to voluntarily address disclosure deficiencies.
Comment: A few commenters addressed the scope of CMS' monitoring of
hospital compliance to make public standard charges. A few commenters
expressed support for meaningful oversight and enforcement by CMS to
ensure the quality and accuracy of the standard charge information
hospitals are required to disclose pursuant to this rule. One commenter
recommended that CMS should have a system in place to ensure that rates
are being updated regularly in accordance with the requirements.
Response: We appreciate commenters' support for and interest in
CMS' monitoring activities. In response to comments regarding the scope
of CMS' proposed monitoring of hospitals with respect to compliance
with these requirements to make public standard charges, we believe our
authority is broad and includes, for example, our ability to monitor
the accuracy of the information made public, and whether the
information is made public in the form and manner and with the
frequency specified in this final rule.
According to the monitoring methods we are finalizing in this final
rule, we anticipate relying on complaints made by individuals or
entities, or individuals' or entities' analysis of noncompliance, as
the basis for being notified about inaccuracies in the information made
public by hospitals. To be clear, such notifications would not directly
underlie an enforcement action. Rather, such notifications would merely
trigger our independent analysis and conclusions, of which
complainant's allegations or analyses may become a part, that would
underlie any potential enforcement action. Pursuant to the monitoring
methods we finalize here, we may also self-initiate the audit of a
hospital's website. We anticipate that our review for inaccuracies in
reported information would be for egregious and obvious instances of
noncompliance, such as (in the extreme) all items and services made
public by a hospital having the same value, or no value at all. Further
we decline the commenters' suggestion to establish an additional, or
different process, to monitor and take actions to address noncompliance
in the form of inaccurate data. We anticipate consistently applying our
monitoring and enforcement methods when addressing all types of
possible violations. As we describe in section II.G.3 of this final
rule, we may provide a written warning notice to a noncompliant
hospital, request a CAP from a hospital if the noncompliance
constitutes a material violation of one or more requirements, impose a
CMP on the hospital if the hospital fails to respond to CMS' request to
submit a CAP or comply with the requirements of a CAP, and publicize
the notice of imposition of a CMP on a CMS website.
Comment: A few commenters suggested, as an alternative approach,
that hospitals should be required to report to CMS on their compliance
with the requirements. For example, commenters' suggestions included
that hospitals should be required to notify CMS of their adherence to
price transparency requirements at regular intervals, or that hospitals
should be required to submit a form to CMS to prove adherence with the
requirements. A few commenters suggested that CMS require hospitals to
attest that they are in compliance with the rule. One commenter
explained that requiring such an attestation would put hospitals at
risk of implicating the federal False Claims Act and associated
penalties if they were determined to be noncompliant.
One commenter, seeming to misinterpret the President's Executive
Order 13877 on ``Improving Price and Quality Transparency in American
Healthcare to Put Patients First'' (June 24, 2019), suggested a
requirement may exist for hospitals to establish a monitoring mechanism
to ensure compliance with the price list posting requirement.
Response: We read the final sentence of section 3(a) of Executive
Order 13877 to indicate two separate requirements related to the
regulation requiring hospitals to publicly post standard charge
information; specifically, that the regulation should: (1) Require
hospitals to regularly update the posted information, and (2) establish
a monitoring mechanism for the Secretary to ensure compliance with the
posting requirement, as needed. We believe that (2) means that HHS
should establish a monitoring mechanism to ensure hospitals' compliance
with the posting requirements.
At this time, we decline to adopt commenters' suggestions that we
require hospitals to report or attest to CMS their compliance with
these requirements, but as we gain experience with monitoring hospital
compliance with the policies we finalize here, we may revisit these
issues in future rulemaking.
Comment: A few commenters stated that it is critical for CMS to
implement a process for individuals to report noncompliance. One
commenter expressed concern over the potential lack of guidance on how
individuals or entities would report to CMS a hospital's noncompliance
with the price transparency requirements. In comments on this topic,
commenters suggested a variety of methods for how a complaint should be
reported to CMS and subsequent actions CMS should take in processing
the complaint.
Response: We have established an email address,
[email protected], through which individuals
and entities may report to CMS concerns about hospital compliance with
requirements to make public standard charges, including complaints
about and analysis of noncompliance.
Comment: Several commenters encouraged CMS to develop robust
auditing procedures rather than relying solely on patients to know how
to and take steps to report violations.
Response: To clarify, we proposed that monitoring methods include,
but are not limited to, CMS' evaluation of complaints made by
individuals or entities, CMS review of individuals' or entities'
analysis of noncompliance, and CMS audit of hospitals' websites. We
agree with the commenters that CMS audit of hospitals may be an
important method for monitoring hospitals compliance with the
requirements of new 45 CFR part 180.
Comment: Several commenters suggested that CMS work closely with
hospitals to ensure they are aware of and understand CMS' monitoring
mechanisms. One commenter suggested that CMS ensure both inpatient and
outpatient providers have sufficient education and training required
for compliance with the proposals. Several commenters suggested that
CMS use education and outreach methods that exist within Medicare FFS
to promote hospital awareness of and promote compliance with the
requirements to make public standard charges.
Response: We thank commenters for their suggestions, and we will
consider these suggestions for education and outreach about compliance
as we gain experience monitoring hospital compliance with these
requirements to make public standard charges. We note that the
suggestions of a few commenters focused on methods for education and
outreach in relation to the Medicare program, but that the price
transparency requirements are not limited to Medicare enrolled
hospitals.
Final Action: After considering the comments received on our
proposed approach to monitor hospital compliance with the requirements
to make public standard charges, we are finalizing our proposal to
evaluate whether a hospital has complied with the requirements under
Sec. Sec. 180.40,
[[Page 65584]]
180.50, and 180.60. We are also finalizing as proposed that the
monitoring methods for determining a hospital's compliance with the
requirements for making public standard charges may include, but are
not limited to, the following, as appropriate:
CMS' evaluation of complaints made by individuals or
entities to CMS.
CMS review of individuals' or entities' analysis of
noncompliance.
CMS audit of hospitals' websites.
We are finalizing our proposal to set forth these monitoring
methods in the regulations at new 45 CFR 180.70.
3. Actions To Address Hospital Noncompliance With Requirements To Make
Public Standard Charges
We proposed that hospitals that CMS identifies as noncompliant
would be notified of their deficiencies and given an opportunity to
take corrective action to come into compliance. As discussed in section
II.G.4. of this final rule, for hospitals determined by CMS to be
noncompliant with section 2718(e) of the PHS Act that fail to respond
to CMS' requests to submit a CAP or comply with the requirements of a
CAP, we proposed that we may impose CMPs and publicize these penalties
on a CMS website.
Should we conclude, based upon the proposed monitoring activities
previously described, that a hospital is noncompliant with section
2718(e) of the PHS Act and the requirements of proposed 45 CFR part
180, we proposed that CMS may take any of the following actions, which
generally, but not necessarily, would occur in this order:
We may provide a written warning notice to the hospital of
the specific violation(s).
We would request a CAP from the hospital if its
noncompliance constitutes a material violation of one or more
requirements.
If the hospital fails to respond to CMS' request to submit
a CAP or comply with the requirements of a CAP, CMS may impose a CMP on
the hospital and publicize the penalty on a CMS website.
As discussed in the CY 2020 OPPS/ASC proposed rule (84 FR 39592),
prior to requesting a CAP, or in the case of violations that are deemed
nonmaterial violations warranting a CAP, CMS anticipates warning, via
written notice, a hospital of noncompliance with one or more of the
requirements to make public standard charges (according to section
2718(e) of the PHS Act and the requirements of proposed 45 CFR part
180), and of the need for voluntary corrective action. We would then
reevaluate the hospital's compliance with the statutory and proposed
regulatory requirements. Should we determine the hospital remains
noncompliant and that the noncompliance constitutes a material
violation of one or more requirements, we anticipate requiring that the
hospital submit a CAP, and there would be increasing consequences for
failure to remedy noncompliance.
We proposed that a material violation may include, but is not
limited to, the following:
A hospital's failure to make public its standard charges
required by proposed new 45 CFR 180.40.
A hospital's failure to make public its standard charges
in the form and manner required under to proposed new 45 CFR 180.50 and
180.60.
We proposed that CMS may request that a hospital submit a CAP,
specified in a notice of violation issued by CMS to a hospital. A
hospital required to submit a CAP must do so, in the form and manner,
and by the deadline, specified in the notice of violation issued by CMS
to the hospital and must comply with the requirements of the CAP.
We proposed that a hospital's CAP must specify elements including,
but not limited to, the deficiency or deficiencies that caused
noncompliance to occur, the corrective actions or processes the
hospital will take to come into compliance with the requirements of 45
CFR part 180, and the timeframe by which the hospital will complete the
corrective action. We proposed that a CAP would be subject to CMS
review and approval. We proposed that after CMS' review and approval of
a hospital's CAP, CMS may monitor and evaluate the hospital's
compliance with the corrective actions.
We proposed that a hospital's failure to respond to CMS' request to
submit a CAP includes failure to submit a CAP in the form, manner, or
by the deadline, specified in a notice of violation issued by CMS to
the hospital. We proposed that a hospital's failure to comply with the
requirements of a CAP includes failure to correct violation(s) within
the specified timeframes.
We proposed to set forth in the regulations at proposed new 45 CFR
180.70 the actions CMS may take to address a hospital's noncompliance
with the requirements to make public standard charges, and to set forth
in proposed new 45 CFR 180.80 the requirements for a CAP.
Comment: A few commenters offered suggestions on the process for
CMS and hospitals to address potential noncompliance. One commenter
expressed concern over the potential lack of guidance regarding the
process CMS will use to investigate a complaint about a hospital's
noncompliance with the price transparency requirements and request
corrective action by a hospital. Another commenter stated that any
penalties for noncompliance should not be accrued until the hospital
has adequate time to respond to complaints. The commenter suggested, at
a minimum, a six-month time frame for responding to and resolving the
issues brought forward via a complaint.
Response: The regulations we are finalizing at new 45 CFR 180.70
specify the actions CMS will take to address hospital noncompliance. We
anticipate that the specifics of each compliance action may depend on
the circumstances of the complaint, CMS' determination of
noncompliance, and the severity of the violation(s).
Comment: One commenter expressed support for a policy under which
CMS would request a CAP before imposing a CMP.
Response: We appreciate the support of the commenter favoring the
proposed approach.
Comment: A few commenters indicated it was unclear what would
constitute the basis for a finding of a material violation for CMS to
determine it is necessary to request a CAP. One of these commenters
recommended that CMS further delineate its expectations and grounds
under which a CMP is warranted to avoid a system of arbitrary and
capricious actions by CMS to penalize hospitals.
These commenters stated that it is unclear what would constitute a
finding of noncompliance with a required public disclosure of standard
charges or noncompliance with disclosure in the form and manner
required by CMS. One commenter specifically asked whether a hospital
would only be cited as noncompliant after repeated violations or
egregious violations or whether technical issues with formatting and
posting of pricing data, including computer server issues, constitute
an actionable violation. Another commenter asked if a hospital would be
found noncompliant if a hospital made a good faith effort to publish
data as required by CMS, but found some requirements impossible to
meet. This commenter asked whether a CMP would be imposed on a hospital
for failing to achieve something impractical based merely on web-
surfing by federal employees absent consumer complaints.
Response: We believe these comments reflect concerns that hospitals
will have limited opportunity to take corrective action prior to the
imposition of a CMP.
[[Page 65585]]
As described in the CY 2020 OPPS/ASC proposed rule (as discussed
above), prior to requesting a CAP for a material violation, CMS may
issue a written warning notice so that the hospital may take voluntary
corrective action to become compliant. We could then reevaluate the
hospital's compliance with the statutory and proposed regulatory
requirements. Should we determine the hospital remains noncompliant and
that the noncompliance constitutes a material violation of one or more
requirements, we anticipate requiring that the hospital submit a CAP.
We may impose a CMP on a hospital identified as noncompliant that fails
to respond to CMS' request to submit a CAP or comply with the
requirements of a CAP.
We further considered the proposed requirements for a CAP. Upon
closer review we believe our proposals to require a hospital to specify
in its CAP (i) the deficiency or deficiencies that caused noncompliance
to occur, and (ii) the corrective actions or processes the hospital
will take to come into compliance with the requirements of this part,
among other elements, could raise due process considerations. In
particular, the phrasing of these proposed elements suggest that in
developing a CAP, the hospital must concur with CMS' finding(s) of
noncompliance. This would be potentially problematic for a hospital in
the event it seeks to dispute CMS' findings of noncompliance.
Therefore, we are finalizing with modification to specify instead that
a hospital's CAP must include, among other elements, a description of
the corrective actions the hospital will take to address the deficiency
or deficiencies identified by CMS. We believe this provision provides
hospitals greater flexibility to specify in their CAP considerations
about CMS' findings of noncompliance, in addition to actions to address
such findings. We anticipate working with hospitals on an individual
basis during the corrective action process to address concerns with
CMS' findings and concerns about meeting the requirements.
Comment: Many commenters indicated that implementation by January
1, 2020 would not provide enough time to comply with requirements and
suggested that CMS consider finalizing an effective date beyond January
1, 2020, or otherwise permit delay or postponement of implementation.
Several commenters expressed concern with the complexity of the data
extract needed to meet the CY 2020 OPPS/ASC proposed rule's
requirements, as well as the availability of that data within existing
online systems or the need to divert hospital personnel to create the
files manually given a lack of contract management system.
One commenter expressed that, for those hospitals unable to afford
a vendor, the staff labor cost will be astronomical and the likelihood
of completing this ``herculean'' task prior to January 1, 2020, will be
very low. This commenter suggested a postponement of the posting of
negotiated rates for small rural and critical access hospitals until
affordable software is developed and made available to assist with this
task.
Another commenter explained that an effective date of January 1,
2020 would not afford hospitals enough time to evaluate consulting
services, contract management systems, or hire additional personnel to
fulfill these requirements.
Commenters suggested a variety of alternative effective dates. For
example, one commenter suggested an effective date of April 2020 or
later, a few commenters suggested requiring implementation by January
1, 2021, and one commenter stated it would take a minimum of 2 years to
become compliant.
One commenter expressed concern that CMS proposed ``an invasive and
highly punitive'' monitoring and enforcement regime, up to and
including CAPs and CMPs, that would take effect January 1, 2020.
Response: We agree with commenters that some hospitals may find it
challenging to initially comply with the new requirements of 45 CFR
part 180 in a short timeframe, and may need time beyond January 2020 to
develop the capacity to meet the new requirements. We also recognize
that hospitals vary in the extent to which they already make public
standard charge information similar to the data we are requiring
hospitals to make public with this final rule. For instance, some
hospitals may already comply with similar requirements under state
laws, or already voluntarily make such information public and would,
therefore, be able to quickly comply with the new requirements.
In light of these considerations, we are finalizing a modification
to extend the effective date of policies under new 45 CFR part 180 to
January 1, 2021. We believe this duration of delay balances the
concerns between providing additional time for hospitals to implement
the new requirements while still ensuring that hospitals' standard
charges are made public quickly to provide consumers access to this
important information. We decline to create a different effective date
for a subset of hospitals, such as rural hospitals, to delay price
transparency requirements as we believe the hospital price transparency
requirements we finalize here are important to informing all consumers'
healthcare decision-making.
In the meantime, we note that existing CMS guidance requires that
hospitals make public their gross charges for items and services as
found in the chargemaster online in a machine-readable format. We note
that this guidance remains in effect until the effective date of the
regulations we are establishing with this final rule, which is January
1, 2021.
Comment: A few commenters suggested that CMS take a phased approach
to enforcement of the requirements for hospitals to make public
standard charges. A few commenters, concerned about the excessive
burden imposed by CMS' proposed requirements and the time it may take
hospitals to develop the capacity to become compliant, suggested a
grace period prior to the imposition of a CMP for noncompliance. A few
commenters suggested that CMS phase-in the proposed monitoring and
enforcement actions over several years. One commenter recommended that
CMS' enforcement actions should begin by publicizing the names of
hospitals determined to be noncompliant (referred to by the commenter
as ``name and shame'') prior to giving these hospitals a chance to take
corrective action, and then progress to requesting a CAP after several
years. According to this commenter, if the implementation of CAPs does
not induce full compliance after a few years then CMPs might be
prudent.
Response: We believe the monitoring methods we are finalizing as
described in Section II.G.2 of this final rule and the actions to
address hospital noncompliance described in this section are necessary
to ensure compliance. We believe the proposed monitoring methods and
enforcement actions give CMS the flexibility to employ a number of
methods to be notified of, and investigate, hospital noncompliance, and
allow CMS to take enforcement actions that escalate through stages. We
believe the proposed approaches to addressing noncompliance, in which
CMS (in sequence) issues a written warning notice, requests a CAP if
the hospital's noncompliance constitutes a material violation of one or
more requirements, and imposes a CMP on the hospital and publicizes the
penalty on a CMS website, allows multiple opportunities for hospitals
to take
[[Page 65586]]
corrective action over a period of time so that they may avoid
imposition of a CMP. We decline the commenters' suggestions that we
further phase-in the enforcement actions over a number of years, or to
establish an approach that routinely provides hospitals a number of
years to remedy their noncompliance.
We considered the commenter's suggestion to expand our authority to
publicize hospitals determined to be noncompliant with the requirements
to make public standard charges. We believe that publicizing a
hospital's noncompliance, prior to imposing a CMP (for example), could
be an effective tool to raise public awareness of incomplete hospital
data (for example), and could encourage hospitals to promptly remedy
their violation(s) to avoid being publicly identified as noncompliant.
However, at this time, we are finalizing our proposal to publicize on a
CMS website the notice of imposition of a CMP. We may revisit through
future rulemaking the timing for and approach by which CMS publicizes
its determination of a hospital's noncompliance with the requirements
to make public standard charges.
Final Action: After considering the comments received, we are
finalizing as proposed to set forth in the regulations at new 45 CFR
180.70, actions to address hospital noncompliance with the requirements
to make public standard charges. We are finalizing that CMS may take
any of the following actions, which generally, but not necessarily,
will occur in the following order if CMS determines the hospital is
noncompliant with section 2718(e) of the PHS Act and the requirements
of 45 CFR part 180:
Provide a written warning notice to the hospital of the
specific violation(s).
Request a CAP from the hospital if its noncompliance
constitutes a material violation of one or more requirements.
Impose a CMP on the hospital and publicize the penalty on
a CMS website if the hospital fails to respond to CMS' request to
submit a CAP or comply with the requirements of a CAP.
We are finalizing with modifications to set forth in new 45 CFR
180.80 the requirements for CAPs. Specifically, we are finalizing as
proposed to specify in 45 CFR 180.80(a) that a hospital may be required
to submit a CAP if CMS determines a hospital's noncompliance
constitutes a material violation of one or more requirements, which may
include, but is not limited to, the following:
A hospital's failure to make public its standard charges
required by new 45 CFR 180.40.
A hospital's failure to make public its standard charges
in the form and manner required under new 45 CFR 180.50 and 180.60.
We are finalizing as proposed to specify in 45 CFR 180.80(b), CMS
may request that a hospital submit a CAP, specified in a notice of
violation issued by CMS to a hospital.
We are finalizing our proposals, except as noted otherwise, to
specify in 45 CFR 180.80(c) the following provisions related to CAPs:
A hospital required to submit a CAP must do so, in the
form and manner, and by the deadline, specified in the notice of
violation issued by CMS to the hospital and must comply with the
requirements of the CAP.
We are finalizing modifications that a hospital's CAP must
specify elements including, but not limited to the corrective actions
or processes the hospital will take to address the deficiency or
deficiencies identified by CMS, and the timeframe by which the hospital
will complete the corrective action.
A CAP is subject to CMS review and approval. After CMS'
review and approval of a hospital's CAP, CMS may monitor and evaluate
the hospital's compliance with the corrective actions.
We are finalizing as proposed to specify in 45 CFR 180.80(d)
provisions for identifying a hospital's noncompliance with CAP requests
and requirements:
A hospital's failure to respond to CMS' request to submit
a CAP includes failure to submit a CAP in the form, manner, or by the
deadline, specified in a notice of violation issued by CMS to the
hospital.
A hospital's failure to comply with the requirements of a
CAP includes failure to correct violation(s) within the specified
timeframes.
We are finalizing a modification to extend the effective date of
the final policies to January 1, 2021.
4. Civil Monetary Penalties
We proposed that we may impose a CMP on a hospital that we identify
as noncompliant with the requirements of proposed 45 CFR part 180, and
that fails to respond to CMS' request to submit a CAP or comply with
the requirements of a CAP as we describe earlier.
We proposed that we may impose a CMP upon a hospital for a
violation of each requirement of proposed 45 CFR part 180. The maximum
daily dollar amount for a CMP to which a hospital may be subject would
be $300. We proposed that even if a hospital is in violation of
multiple discrete requirements of proposed 45 CFR part 180, the maximum
total sum that a single hospital may be assessed per day is $300.
Further, we proposed to adjust the CMP amount annually by applying
the cost-of-living adjustment multiplier determined by the Office of
Management and Budget (OMB) for adjusting applicable CMP amounts
pursuant to the Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015. This multiplier, based on the Consumer Price
Index for All Urban Consumers (CPI-U), not seasonally adjusted, is
applied to the CMPs in 45 CFR 102.3. For instance, the cost-of-living
adjustment multiplier for 2018, based on the CPI-U for the month of
October 2017, not seasonally adjusted, was 1.02041 (83 FR 51369).
As discussed in the CY 2020 OPPS/ASC proposed rule, given the
importance of compliance with the price transparency policies, we
believe this proposed CMP amount strikes a balance between penalties
that are sufficiently harsh to incentivize compliance but not
excessively punitive. We reviewed CMP amounts for other CMS programs
that require reporting information and we believe our proposed $300
maximum daily dollar amount for a CMP is commensurate with the level of
severity of the potential violation, taking into consideration that
nondisclosure of standard charges does not rise to the level of harm to
the public as other violations (such as safety and quality issues) for
which CMS imposes CMPs and, therefore, should remain at a relatively
lower level.
We considered applying lower and higher maximum dollar amounts for
a CMP for noncompliance with the requirements of proposed 45 CFR part
180. For example, we considered that CMS has imposed $100 per day
penalty amounts with respect to other compliance matters, such as where
health insurers fail to comply with premium revenue reporting and
rebate requirements found at 45 CFR 158.606. The basis for the CMPs
under 45 CFR 158.606 is the number of individuals affected. With
respect to the disclosure requirements under proposed 45 CFR part 180,
where the lack of information could affect an unknown number of
consumers and in myriad ways (for example, not just individuals who
paid more for items and services), we noted our belief that it would
not be feasible to utilize a ``per person'' type basis. We also
considered proposing higher maximum daily dollar amounts, such as $400
per day, $500 per day or more.
Further, we considered establishing a cumulative annual total limit
for the
[[Page 65587]]
CMP to which a hospital is subject for noncompliance with proposed 45
CFR part 180. For example, we considered applying a cumulative annual
total limit of $100,000 per hospital for each calendar year. However,
such an approach could, for example, prevent accrual of additional
penalties on hospitals that remain noncompliant for multiple years.
If CMS imposes a penalty in accordance with the requirements of
proposed 45 CFR part 180, we proposed that CMS provide a written notice
of imposition of a CMP to the hospital via certified mail or another
form of traceable carrier. This notice may include, but would not be
limited to, the following:
The basis for the hospital's noncompliance, including, but
not limited to, the following: CMS' determination as to which
requirement(s) the hospital violated; and the hospital's failure to
respond to CMS' request to submit a CAP or comply with the requirements
of a CAP.
CMS' determination as to the effective date for the
violation(s). This date would be the latest date of the following:
++ The first day the hospital is required to meet the requirements
of proposed 45 CFR part 180.
++ If a hospital previously met the requirements of this part but
did not update the information annually as required, the date 12 months
after the date of the last annual update specified in information
posted by the hospital.
++ A date determined by CMS, such as one resulting from monitoring
activities specified in proposed new 45 CFR 180.70, or development of a
CAP as specified in proposed new 45 CFR 180.80.
The amount of the penalty as of the date of the notice.
A statement that a CMP may continue to be imposed for
continuing violation(s).
Payment instructions.
Intent to publicize the hospital's noncompliance and CMS'
determination to impose a CMP on the hospital for noncompliance with
the requirements of proposed 45 CFR part 180 by posting the notice of
imposition of a CMP on a CMS website.
A statement of the hospital's right to a hearing (as
described in section II.H. of this final rule).
A statement that the hospital's failure to request a
hearing within 30 calendar days of the issuance of the notice permits
the imposition of the penalty, and any subsequent penalties pursuant to
continuing violations, without right of appeal.
Further, in the event that a hospital elects to appeal the penalty,
and if the CMP is upheld only in part by a final and binding decision,
we proposed that CMS would issue a modified notice of imposition of a
CMP.
We proposed that a hospital must pay a CMP in full within 60
calendar days after the date of the notice of imposition of a CMP from
CMS. In the event a hospital requests a hearing (as described in
section II.H. of this final rule), we proposed that the hospital must
pay the amount in full within 60 calendar days after the date of a
final and binding decision to uphold, in whole or in part, the CMP. We
also proposed that if the 60th calendar day is a weekend or a Federal
holiday, then the timeframe is extended until the end of the next
business day.
We also proposed to publicize, by posting on a CMS website, our
notice of imposition of a CMP on a hospital for noncompliance with
these requirements, and any subsequently issued notice of imposition of
a CMP for continuing violations. In the event that a hospital requests
a hearing, we proposed that CMS would indicate in its posting that the
CMP is under review. If the CMP amount is upheld, in whole, by a final
and binding decision, we would maintain the posting of the notice of
imposition of a CMP on a CMS website. If the CMP is upheld, in part, by
a final and binding decision, we would issue a modified notice of
imposition of a CMP, and would make this modified notice public on a
CMS website. If the CMP is overturned in full by a final and binding
decision, we would remove the notice of imposition of a CMP from a CMS
website.
In addition, we proposed that CMS may issue subsequent notice(s) of
imposition of a CMP, as described in this section of the CY 2020 OPPS/
ASC proposed rule, that result from the same instance(s) of
noncompliance.
We proposed to set forth in proposed new 45 CFR 180.90 the proposed
CMPs for hospitals determined by CMS to be noncompliant with
requirements for making standard charges public.
We sought comment on whether the proposed amount of a CMP, in
combination with making public on a CMS website our notice of
imposition of a CMP, were reasonable and sufficient to ensure
hospitals' compliance with the proposed requirements to make public
standard charges. We were interested in public comments on our proposed
$300 maximum daily dollar amount for a CMP for noncompliance with
section 2718(e) of the PHS Act and proposed 45 CFR part 180. In
particular, we sought comment on whether we should impose stronger
penalties for noncompliance, or whether we should further limit the
maximum amount of penalty we would impose on a hospital for a calendar
year and the methodology for creating such a limit (for instance
through limiting the maximum daily penalty amount, by establishing a
cumulative annual total limit on the penalty amount, or both). We
sought comment on unintended consequences of the proposed penalties for
noncompliance. We also sought commenters' suggestions on whether other
penalties should be applied for noncompliance with section 2718(e) of
the PHS Act.
Comment: Several commenters stated that the imposition of CMPs for
noncompliance with the requirements to make standard public charges
exceeds CMS' authority under section 2718(e) of the PHS Act. These
commenters challenged CMS' reliance on section 2718(b)(3) as the basis
for enforcing the requirements that hospitals make their standard
charges public, and specifically as the basis for imposing a CMP on a
hospital for noncompliance with the requirements to make public
standard charges. These commenters asserted that section 2718(b)(3)
applies only to the MLR and rebate requirements imposed by the ACA on
health insurance issuers offering group or individual health insurance
coverage under section 2718 of the PHS Act. A few commenters explained
that had Congress intended to require the Secretary to enforce the
requirement for public availability of hospital standard charge
information, it would have constructed the provisions of section 2718
of the PHS Act differently. A few commenters presented a review of the
legislative history of section 2718 of the PHS Act, suggesting that the
phrasing of section 2718(b)(3), referring to its applicability to
``this section,'' was a drafting error, and suggested that Congress
intended to apply this provision only to MLR provisions within the
section. A few commenters further asserted that absent an express
mandate for the Secretary in section 2718(b)(3) of the PHS Act to
enforce the requirements for hospitals to disclose their standard
charges under a different provision of law (namely, section 2718(e)),
the Secretary may neither imply an intent to do so nor reverse its
previous rulemaking policy that limited the use of that enforcement
authority to issuers that do not comply with MLR and rebate
requirements imposed under section 2718(b). One commenter explained
that interpreting section 2718(b)(3) of the PHS Act as CMS does leads
to an absurd result.
[[Page 65588]]
A few commenters explained that HHS has not previously suggested
that it could take enforcement action with respect to section 2718(e)
of the PHS Act, which the commenters suggest means the agency lacked
such powers. Specifically, one commenter suggested that HHS implicitly
recognized that its enforcement authority under section 2718(b)(3) of
the PHS Act should be read as confined to enforcing the MLR
requirements when it adopted subparts D through F of 45 CFR part 158,
stating that these provisions implement enforcement authority in
section 2718(b)(3) and provide for enforcement of the reporting
obligations set forth in section 2718(a) and rebate requirements in
section 2718(b). Another commenter expressed that CMS has not
previously asserted its ability to assess CMPs under section 2718(b)(3)
of the PHS Act on noncompliant hospitals, or previously claimed any
enforcement authority related to section 2718(e) of the PHS Act.
Response: We continue to believe section 2718(b)(3) of the PHS Act,
based on its plain meaning, authorizes the Secretary to enforce the
provisions of section 2718 of the PHS Act and to provide for
appropriate penalties under section 2718 of the PHS Act, including
section 2718(e) of the PHS Act. It is not absurd to say that Congress
wanted to provide HHS authority more generally to enforce all of the
requirements set out in section 2718. Further, HHS has not previously
conceded that it lacked authority to issue such rules for enforcing, or
penalties pursuant to, section 2718(e) of the PHS Act in promulgating
regulations pursuant to sections 2718(a) and (b). In fact, as we
explained in earlier rulemaking, we have been considering developing
regulations, through notice and comment rulemaking, to establish
enforcement mechanisms to address hospital noncompliance with section
2718(e) (83 FR 20548 through 20550; 83 FR 41686 through 41688).
Therefore, consistent with our proposal, we continue to believe we
have the legal basis to impose penalties on hospitals that fail to make
their standard charges public in accordance with the requirements we
finalize under section 2718(e) of the PHS Act. Accordingly, as
described in this section and elsewhere in this final rule, we are
finalizing our proposals to enforce the requirements under new 45 CFR
part 180, and to potentially impose CMPs for noncompliance with the
requirements of new 45 CFR part 180.
Comment: A few commenters supported CMS' efforts to take
enforcement actions and a few commenters supported the proposal to
impose financially significant CMPs on large hospitals for
noncompliance with the requirements to make public standard charges. A
few commenters suggested that CMS forgo imposition of CMPs altogether
while others suggested that CMS limit use of CMPs (particularly to
avoid excessive financial penalties) or not impose CMPs on certain
types of providers, such as IRFs or rural hospitals.
Several commenters explained that the proposed CMPs were overly
punitive, and suggested CMS forgo imposing CMPs. One commenter
explained that CMPs are typically reserved for fraud and abuse, and
opposed imposition of CMPs for price transparency requirement
noncompliance, which is more likely to be based in technical
difficulties or IT system limitations. A few commenters cited concerns
about imposing CMPs on noncompliant hospitals in light of the
complexity of making public standard charge data and the short
timeframe by which hospitals would have to come into compliance. One
commenter explained that it is not necessary to impose CMPs for
noncompliance with price transparency requirements given that hospitals
have undertaken numerous initiatives to enhance price transparency in
recent years, and that they are making significant progress in this
complex area.
Response: We appreciate commenters supporting the importance of
enforcement actions and the imposition of CMPs on hospitals as a method
for ensuring compliance with the requirements to make public standard
charges. We decline the commenters' suggestions that we not finalize
the proposed use of CMPs as an enforcement mechanism. Given the
importance of the requirements for hospitals to make public standard
charges, we believe CMPs serve as an appropriate enforcement action to
address noncompliance. As we explained in Section II.G.2. of this final
rule, we believe it is important that we apply a consistent approach to
imposing CMPs on noncompliant hospitals across all entities, regardless
of factors such as hospital size, revenue or location. Therefore, we
decline to adopt the commenters' suggestions that we apply alternative
policies to a subset of hospitals, such as rural safety net providers.
Further, we disagree with the commenter's suggestion that we forgo
establishing the authority to impose CMPs for noncompliance in light of
the demonstrated commitment to price transparency by some, but not all,
institutions.
We respond to comments on the amount of CMPs elsewhere in this
section of this final rule. Under the actions to address hospital
noncompliance which we are finalizing in this final rule, we anticipate
that hospitals would have the opportunity to take corrective action
prior to the imposition of a penalty. As we have described elsewhere in
Section II.G of this final rule, prior to imposing a CMP on a hospital,
we anticipate issuing a written warning notice and requesting a CAP
from the hospital as initial steps to promote compliance. We may impose
a CMP on a noncompliant hospital if it fails to respond to CMS' request
to submit a CAP or comply with the requirements of a CAP. By complying
with the requirements, a hospital can avoid financial penalties. We
also note that hospitals determined to be noncompliant, and subject to
a CMP, can avoid accruing larger amounts of CMPs by coming into
compliance with the requirements.
Comment: Comments on the amount of the CMP were mostly polarized,
with some suggesting lower amounts and other suggesting higher amounts
than the proposed $300 maximum daily dollar amount for a CMP. A
recurring concern in comments was that the CMP amount could be overly
burdensome and potentially detrimental to the continued operation of a
small hospital with low margins, particularly CAHs, while posing an
inadequate incentive for hospitals (particularly larger hospitals) to
comply because the CMP amount does not pose a real financial burden. As
one commenter explained, a large hospital could decide that $300 per
day ($109,500 per year) is worth paying in order to not disclose
information that could lead to payers with higher rates wanting to pay
them less in light of discovering other payers have more favorable
negotiated rates. A few commenters suggested that the proposed CMP
amount is trivial for certain hospitals, compared, for instance, to the
salaries of hospital executives, or the hospital's total revenue. One
commenter expressed concern that stakeholders will view the
noncompliance penalty as a new business expense rather than an
incentive to comply with the transparency requirements. Another
commenter explained that the proposed CMP amount is too low to compel
hospitals to comply if they are adamantly opposed to making public this
information.
Another commenter noted that under the PAMA and 42 CFR 414.504(e),
applicable laboratories that do not report applicable information as
[[Page 65589]]
required may be subject to a CMP in an amount of up to $10,000 per day
for each failure to report or each misrepresentation or omission in
reporting. The commenter suggested that compliance with these data
reporting requirements was below expectations; therefore, the commenter
suggested that it would be unlikely that the proposed $300 maximum
daily dollar amount for a CMP would be sufficient to encourage prompt
reporting of pricing data by hospitals.
One commenter suggested that CMS increase the CMP amount,
recommending the penalties be consistent with information blocking
penalties (according to section 4004 of the 21st Century Cures Act),
which can be up to $1 million per violation (which we note is
applicable to health IT developers, health information networks, and
health information exchanges),\172\ explaining that failure to disclose
price information would be information blocking.
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\172\ Refer to HealthIT.gov, Information Blocking, available at
https://www.healthit.gov/topic/information-blocking.
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A few commenters suggested alternative approaches, such as using
factors that allow for scaling of the CMP amount. In particular, a few
of these commenters suggested scaling penalties to ensure rural
hospitals are not unduly burdened. For example, one commenter suggested
that CMPs should be adjusted based on bed size and rural or urban
designation. Another commenter suggested that CMS consider scaling the
penalty based on the number of patients treated at the facility within
a given year. If this information is not available due to lack of data
on patients who self-pay or are insured by non-government payers, the
commenter suggested that CMS scale the CMP amount according to the
number of Medicare beneficiaries served in a given year. The commenter
explained this approach could allow CMS to not overly penalize smaller
hospitals while also providing a sufficient incentive for hospitals to
comply.
Response: We appreciate the comments received on the proposed $300
maximum daily dollar amount for a CMP. Given that commenters tended to
be divided between those in favor of lower and higher amounts, we
believe the proposed amount strikes an appropriate balance between
these concerns, and we are therefore finalizing this amount as
proposed.
The $300 maximum daily dollar amount for a CMP for noncompliance
with 45 CFR part 180 is lower than CMPs imposed under certain other
authorities administered by HHS agencies, where an entity's
noncompliance poses immediate jeopardy, results in actual harm, or
both. We believe the relatively lower amount for a CMP, for a
hospital's noncompliance with requirements to make public standard
charges, is reasonable since failure to make this information available
is less serious than noncompliance that poses or results in harm to a
patient.
At this time, and given the nature of potential noncompliance with
the requirements we are finalizing for hospitals to make public
standard charges, we decline to impose penalties higher than the
proposed amount. We decline to impose the higher penalties that are
applicable to health IT developers, health information networks, and
health information exchanges for information blocking under the 21st
Century Cures Act, for interfering with, preventing, or materially
discouraging access, exchange, or use of electronic health information.
We also decline to impose a potentially higher CMP amount, such as is
applicable to laboratories under PAMA, for noncompliance with reporting
information which could affect payment rate setting by CMS.
We also note that the $300 maximum daily dollar amount, when
accrued over a year, is higher than our estimate of the cost per
hospital to comply with the requirements to make public standard
charges in the initial period of implementation (as described in
Section V of this final rule). We considered commenters' concerns that
a relatively lower CMP amount may be insufficient to encourage
compliance if the cost of making public standard charges, or the value
to the hospital of not disclosing standard charge data, is higher than
the total annual amount of the CMP. For this reason, we believe it is
important to maintain a sufficiently sizeable CMP sum and therefore
decline commenters' suggestions to finalize a maximum daily dollar
amount for a CMP that is less than $300.
We appreciate the commenters' concerns that some hospitals may
prefer to forgo meeting the requirements of 45 CFR part 180 (for
example, to not expend resources on reporting or to protect pricing
information they consider sensitive), and, instead, face compliance
actions including a $300 maximum daily dollar amount for a CMP. We
decline at this time to increase the amount of the CMP based on this
concern alone, but as we gain experience with implementing the policy
we intend to monitor for such occurrences, and may revisit the need to
adjust the amount of the CMP in future rulemaking.
We would need to further evaluate the feasibility of implementing a
sliding scale CMP approach across institutions that meet the definition
of hospital according to new 45 CFR 180.20 (as discussed in section
II.B of this final rule). We believe it would be especially challenging
to find a reliable source of data that provides for a scalable factor
across all institutions that meet the definition of hospital.
Therefore, we decline the commenters' suggestions to scale the CMP
amount based on such factors as hospital bed size, location or patient
volume. However, we anticipate that we will continue to consider this
issue, and may revisit use of a CMP scaling methodology in future
rulemaking. At this time, we are finalizing as proposed a policy that
allows for a standardized daily maximum CMP amount.
Comment: One commenter supported the alternative we described in
the CY 2020 OPPS/ASC proposed rule, which was to apply a cumulative
annual total limit (or cap) on the penalty amount, though the commenter
did not specify what this limit should be and suggested only that it be
a reasonable amount.
Response: We believe we have struck an appropriate balance in
determining the $300 maximum daily dollar amount for a CMP, and we
therefore decline at this time to finalize applying a cumulative annual
total limit on the CMP amount. We appreciate the commenter's support
for this alternative approach.
Comment: One commenter disagreed with the proposal that CMS
publicize the notice of imposition of a CMP on a CMS website,
explaining that this amounted to public shaming which the commenter
believes has no benefit and seems petty.
Response: We continue to believe it is appropriate to publish the
notice of imposition of a CMP on a CMS website to identify hospitals
determined to be noncompliant with the requirements to make public
standard charges. We believe this information will help inform the
public of noncompliant hospitals and is an opportunity to demonstrate
the outcome of CMS' monitoring and enforcement activities for these
important requirements.
Final Action: After considering the comments received, we are
finalizing as proposed policies for imposing a CMP on a hospital that
we identify as noncompliant with the requirements of 45 CFR part 180,
and that fails to respond to CMS' request to submit a CAP or comply
with the requirements of a CAP.
[[Page 65590]]
We are finalizing as proposed that CMS may impose a CMP upon a
hospital for a violation of each requirement of 45 CFR part 180.
Further, we are finalizing our proposal that the maximum daily dollar
amount for a CMP to which a hospital may be subject is $300, even if
the hospital is in violation of multiple discrete requirements of 45
CFR part 180. The amount of the CMP will be adjusted annually using the
multiplier determined by OMB for annually adjusting CMP amounts under
45 CFR part 102.
We are finalizing as proposed that CMS provides a written notice of
imposition of a CMP to the hospital via certified mail or another form
of traceable carrier. We are also finalizing as proposed the elements
of this notice to the hospital, as previously described in this section
of this final rule, will include but not be limited to the following:
The basis for the hospital's noncompliance, including, but
not limited to, the following: CMS' determination as to which
requirement(s) the hospital has violated; and the hospital's failure to
respond to CMS' request to submit a CAP or comply with the requirements
of a CAP.
CMS' determination as to the effective date for the
violation(s).
The amount of the penalty as of the date of the notice.
A statement that a CMP may continue to be imposed for
continuing violation(s).
Payment instructions.
Intent to publicize the hospital's noncompliance and CMS'
determination to impose a CMP on the hospital for noncompliance with
the requirements of 45 CFR part 180 by posting the notice of imposition
of a CMP on a CMS website.
A statement of the hospital's right to a hearing according
to subpart D of 45 CFR part 180 (as discussed in section II.H of this
final rule).
A statement that the hospital's failure to request a
hearing within 30 calendar days of the issuance of the notice permits
the imposition of the penalty, and any subsequent penalties pursuant to
continuing violations, without right of appeal.
We are finalizing our proposal that CMS may issue subsequent
notice(s) of imposition of a CMP, according to the aforementioned
requirements (in short, where investigation reveals there is continuing
justification), that result from the same instance(s) of noncompliance.
We are finalizing with a clarifying modification that, in the event
that a hospital elects to appeal the penalty, and if the CMP is upheld,
in part, by a final and binding decision, CMS will issue a modified
notice of imposition of a CMP, to conform to the adjudicated finding.
We are also finalizing our proposals on timing of payment of a CMP.
Specifically, a hospital must pay the CMP in full within 60 calendar
days after the date of the notice of imposition of a CMP from CMS. In
the event a hospital requests a hearing, pursuant to subpart D of 45
CFR part 180, the hospital must pay the amount in full within 60
calendar days after the date of a final and binding decision to uphold,
in whole or in part, the CMP. If the 60th calendar day is a weekend or
a Federal holiday, then the timeframe is extended until the end of the
next business day.
We are finalizing as proposed that CMS will post the notice of
imposition of a CMP on a CMS website, including the initial notice of
imposition of a CMP, and subsequent notice(s) of imposition of a CMP
that result from the same instance(s) of noncompliance. Further, in the
event that a hospital elects to request a hearing, pursuant to subpart
D of 45 CFR part 180, CMS will indicate in its posting that the CMP is
under review. We are finalizing the following policies regarding the
posting of the notice of imposition of a CMP, pursuant to a final and
binding decision from the hearing process specified in subpart D of 45
CFR part 180:
We are finalizing as proposed, CMS will maintain the
posting of the notice of imposition of a CMP on a CMS website if the
CMP is upheld, in whole.
We are finalizing with a clarifying modification, CMS will
issue a modified notice of imposition of a CMP, to conform to the
adjudicated finding, if the CMP is upheld, in part. CMS will make this
modified notice public on a CMS website.
We are finalizing as proposed, CMS will remove the notice
of imposition of a CMP from a CMS website if the CMP is overturned in
full.
We are finalizing our proposal to specify these policies on CMPs in
new 45 CFR 180.90.
H. Appeals Process
Under section 2718(b)(3) of the PHS Act, we proposed to impose
penalties on hospitals that fail to make their standard charges public
in accordance with the requirements we finalize under section 2718(e).
As we described in the CY 2020 OPPS/ASC proposed rule (84 FR 39593
through 39594), we believe it is important to establish a fair
administrative process by which a hospital may appeal CMS' decisions to
impose penalties under section 2718(b)(3) regarding the hospital's
noncompliance with the requirements of section 2718(e) of the PHS Act
and the requirements of proposed 45 CFR part 180. Through various
Medicare programs, we have gained experience with administrative
hearings and other processes to review CMS' determinations.
We proposed to align the procedures for the appeals process with
the procedures established under section 2718(b)(3) of the PHS Act for
an issuer to appeal a CMP imposed by HHS for its failure to report
information and pay rebates related to MLRs, as required by sections
2718(a) and (b) of the PHS Act, and according to 45 CFR parts 158 and
150. Therefore, we proposed that a hospital upon which CMS has imposed
a penalty under proposed 45 CFR part 180 may appeal that penalty in
accordance with 45 CFR part 150, subpart D, except as we have otherwise
proposed.
Generally, under this proposed approach, a hospital upon which CMS
has imposed a penalty may request a hearing before an Administrative
Law Judge (ALJ) of that penalty. The Administrator of CMS, at his or
her discretion, may review in whole or in part the ALJ's decision. A
hospital against which a final order imposing a CMP is entered may
obtain judicial review.
For purposes of applying the appeals procedures at 45 CFR part 150
to appeals of CMPs under proposed 45 CFR part 180, we proposed the
following exceptions to the provisions of 45 CFR part 150:
Civil money penalty means a civil monetary penalty
according to proposed new 45 CFR 180.90.
Respondent means a hospital that received a notice of
imposition of a CMP according to proposed new 45 CFR 180.90(b).
References to a notice of assessment or proposed
assessment, or notice of proposed determination of CMPs, are considered
to be references to the notice of imposition of a CMP specified in
proposed new 45 CFR 180.90(b).
Under 45 CFR 150.417(b), in deciding whether the amount of
a civil money penalty is reasonable, the ALJ may only consider evidence
of record relating to the following:
++ The hospital's posting(s) of its standard charges, if available.
++ Material the hospital timely previously submitted to CMS
(including with respect to corrective actions and CAPs).
++ Material CMS used to monitor and assess the hospital's
compliance
[[Page 65591]]
according to proposed new 45 CFR 180.70(a)(2).
The ALJ's consideration of evidence of acts other than
those at issue in the instant case under 45 CFR 150.445(g) does not
apply.
We proposed to set forth in proposed new 45 CFR 180.100 the
proposed procedures for a hospital to appeal the CMP imposed by CMS for
its noncompliance with the requirements of proposed 45 CFR part 180.
We also proposed to set forth in proposed new 45 CFR 180.110 the
consequences for failure of a hospital to request a hearing. If a
hospital does not request a hearing within 30 calendar days of the
issuance of the notice of imposition of a CMP described in proposed new
45 CFR 180.90(b), we proposed that CMS may impose the CMP indicated in
such notice and may impose additional penalties pursuant to continuing
violations according to proposed new 45 CFR 180.90(f) without right of
appeal. We proposed that if the 30th calendar day is a weekend or a
Federal holiday, then the timeframe is extended until the end of the
next business day. We also proposed that the hospital has no right to
appeal a penalty with respect to which it has not requested a hearing
in accordance with 45 CFR 150.405, unless the hospital can show good
cause, as determined at 45 CFR 150.405(b), for failing to timely
exercise its right to a hearing.
Alternatively, we considered and sought public comment on following
a process for appealing CMPs similar to the approach specified in 42
CFR part 498, subparts D through F. We explained that there are
differences between the appeals procedures at 42 CFR part 498 compared
to 45 CFR part 150. Under the regulations at 42 CFR part 498, for
example, either party dissatisfied with a hearing decision by the ALJ
may request Departmental Appeals Board review of the ALJ's decision.
Final Action: We received no comments on our proposed process for a
hospital upon which CMS has imposed a penalty under proposed 45 CFR
part 180 to appeal that penalty in accordance with 45 CFR part 150,
subpart D, except as we otherwise proposed. We are finalizing as
proposed to specify in new 45 CFR 180.100 the procedures for a hospital
to appeal the CMP imposed by CMS for its noncompliance with the
requirements of 45 CFR part 180 to an ALJ, and for the Administrator of
CMS, at his or her discretion, to review in whole or in part the ALJ's
decision. Specifically, we are finalizing our proposal that a hospital
upon which CMS has imposed a penalty under 45 CFR part 180 may appeal
that penalty in accordance with 45 CFR part 150, subpart D, with the
exceptions (for the propose of applying the provisions of part 150 to
CMPs under part 180) as described in this section of this final rule.
We are also finalizing as proposed to set forth in new 45 CFR
180.110 the consequences for failure of a hospital to request a
hearing. If a hospital does not request a hearing within 30 calendar
days of the issuance of the notice of imposition of a CMP described in
new 45 CFR 180.90(b), CMS may impose the CMP indicated in such notice
and may impose additional penalties pursuant to continuing violations
according to new 45 CFR 180.90(f) without right of appeal. If the 30th
calendar day is a weekend or a Federal holiday, then the timeframe is
extended until the end of the next business day. The hospital has no
right to appeal a penalty with respect to which it has not requested a
hearing in accordance with 45 CFR 150.405, unless the hospital can show
good cause, as determined at 45 CFR 150.405(b), for failing to timely
exercise its right to a hearing.
III. Comments Received in Response To Request for Information: Quality
Measurement Relating To Price Transparency for Improving Beneficiary
Access to Provider and Supplier Charge Information
In the CY 2020 OPPS/ASC proposed rule (84 FR 39594 through 39595),
we included a RFI related to (1) access to quality information for
third parties and healthcare entities to use when developing price
transparency tools and when communicating charges for healthcare
services, and (2) improving incentives and assessing the ability of
healthcare providers and suppliers to communicate and share charge
information with patients. We received approximately 63 timely pieces
of correspondence on this RFI. We appreciate the input provided by
commenters.
IV. Collection of Information Requirements
A. Response to Comments
Under the Paperwork Reduction Act of 1995 (PRA), we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the OMB for review and approval.
We solicited comments in the CY 2020 OPPS/ASC notice of proposed
rulemaking that published in the August 9, 2019 Federal Register (84 FR
39398). For the purpose of transparency, we are republishing the
discussion of the information collection requirements (ICR) along with
a reconciliation of the public comments we received.
B. ICR for Hospital Price Transparency
In this final rule, we seek to promote price transparency in
hospital standard charges to implement section 2718(e) of the PHS Act.
We believe that in doing so, healthcare costs will decrease, and
consumers can be empowered to make more informed decisions about their
healthcare. We believe these finalized requirements will represent an
important step towards putting consumers at the center of their
healthcare and ensuring they have access to needed information.
In the CY 2020 OPPS/ASC proposed rule, we noted that hospitals in
the United States maintain chargemasters, a list of their gross charges
for all individual items and services as part of their standard billing
and business practices.\173\ Additionally, we stated that most
hospitals maintain electronic data on charges they negotiate with third
party payers for hospital items and services as well as service
packages. As such, we indicated we believed that the burden for making
this information publicly available would be minimal and estimated only
a small burden for each hospital to extract, review, and conform the
posting of gross charges and third party payer-specific negotiated
charges for all hospital items and services in the comprehensive
machine-readable format. In addition, we estimated some burden
associated with hospitals making public their payer-specific negotiated
charges for a set of at least 300 (70 CMS-specified and at least 230
hospital-selected) shoppable services in a consumer-friendly manner,
with flexibility for hospitals to determine the most consumer-friendly
format. We proposed a policy that hospitals would display the charge
for the primary shoppable service along with charges for any ancillary
services the hospital customarily provides in conjunction with the
primary shoppable service.
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\173\ Batty M. and Ippolito B. Mystery of The Chargemaster:
Examining The Role Of Hospital List Prices in What Patients Actually
Pay. Health Affairs. April 2017; 36(4): 689-696. Available at:
https://www.healthaffairs.org/doi/10.1377/hlthaff.2016.0986.
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We estimated the proposed requirements would apply to 6,002
hospitals operating within the United States under the proposed
definition of ``hospital.'' To estimate this number, we subtracted 208
federally-owned or operated hospitals from the total
[[Page 65592]]
number of U.S. hospitals, 6,210 hospitals \174\ (6,210 total
hospitals--208 federally-owned or operated hospitals).
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\174\ American Hospital Association. Fast Facts on U.S.
Hospitals, 2019. Available at: https://www.aha.org/statistics/fast-facts-us-hospitals.
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We concluded that the annual burden per hospital should be
calculated with all activities performed by four professions combined.
The four professions included a lawyer, a general operations manager, a
business operations specialist, and a network and computer system
administrator. We estimated an annual burden assessment to be 12 hours
(2 hours + 8 hours + 2 hours) per hospital with a cost of $1,017.24
($257.80 + $592.00 + $167.44) per hospital. We also estimated a total
national burden of 72,024 hours (12 hours x 6,002 hospitals) and total
cost of $6,105,474 ($1,017.24 x 6,002 hospitals).
Comment: Several commenters were concerned that CMS did not take
into account the number of hours needed for specific technical
activities or consultation with necessary professionals. For example, a
few commenters were concerned that CMS underestimated the cost and time
involved in consulting legal and compliance experts on implementation
of the rule, suggesting that such investment would be necessary to
ensure the hospital had satisfactorily met requirements. A few
commenters suggested that CMS take into account the time, resources and
input of clinical staff necessary for each hospital to identify and
compile each shoppable service or service package and corresponding
ancillary services to reach a total of 300 shoppable services. One
commenter suggested that the burden estimate take into account the time
hospitals need to develop policies and business practices to comply
with the requirements of the rule. Several commenters were concerned
that the burden estimate did not reflect the need to hire multiple
additional full time equivalents (FTEs) to staff multiple departments
to comply with the rule to keep up with new charges, technology,
monitoring and reporting, and contract negotiations.
A few commenters cited a need for increasing consumer-facing
clinical staffing as a result of making public hospital standard charge
information. Specifically, one commenter expressed concern that the
increased complexity of information available to consumers would result
in an increased volume of calls from an average of 25 patients per day
to 200 patients per day to its hospital customer service center. As a
result, the commenter stated that the hospital customer service center
would need to add 8-10 additional FTEs, resulting in $500,000 to $1
million in additional costs per year.
Response: We thank commenters for their input and suggestions on
the types of professions, and the time and resources needed to comply
with these requirements. Our estimate takes into account the time
needed to review and comply with these requirements. We acknowledge
that some hospitals may require longer time or greater resources than
others to identify and compile their standard charges in a manner
consistent with our final rules. For example, some hospitals may have
many third-payer contracts while others may have relatively few.
Similarly, some hospitals may have already compiled and present their
services to the public in a manner that is consumer-friendly as a
result of state requirements or voluntarily actions. We also believe
that the greatest impact will be in the first year related to
organizing the display of information in the form and manner required
under this final rule after which the hospital would simply have to
update the numbers annually. In order to minimize the burden related to
the consumer-friendly display of hospital charges for shoppable
services, we are finalizing as modifications to new 45 CFR 180.60 that
a hospital offering an internet-based price estimator tool, that meets
the requirements we set forth in section II.F.5. of the final rule, is
an acceptable alternative method for meeting our requirements to make
public its standard charges for selected shoppable services in a
consumer-friendly manner. We believe that hospitals that have already
been offering price estimator tools will incur less costs to comply
with the requirements of the final rule given this accommodation.
Even so, we appreciate the suggestion from commenters that we
consider time and input from clinical staff. We agree that clinical
input would be helpful to ensure the display of shoppable services is
presented the way patients experience their care and to translate
billing code descriptions into plain language. As a result, we are
adding in the wage of Registered Nurses as a proxy for clinical staff
and accounting for 30 hours of clinical assistance per hospital. We
believe this time would be important in the initial stages of
implementation in order to determine what ancillary services are
customarily provided with the provision of the primary shoppable
service. We do not believe such clinical expertise would be required
for annual updates to the disclosed information in subsequent years.
Additionally, in response to commenters who indicate more time should
be allocated for lawyers and general operations managers, we are
increasing the number of hours for those professions to 10 hours per
hospital. Since the time allocated for lawyers was for reviewing the
final rules, we believe these hours should be included in the initial
implementation year estimate only. We are also significantly increasing
the number of hours needed in the initial implementation year for
business operations specialists to complete necessary processes and
procedures to gather and compile required information and post it to
the internet in the form and manner specified in the final rule.
Finally, we can find no evidence to support the assertion that
public disclosure of hospital standard charges increases the number of
consumer calls to hospitals, necessitating hiring of additional staff
for a hospital customer service center. To the contrary, price
transparency research suggests that disclosure of provider charges can
reduce administrative costs for a hospital and improve patient
satisfaction.\175\ We therefore have not included this in our analysis.
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\175\ https://www.advisory.com/research/market-innovation-center/the-growth-channel/2018/12/price-transparency.
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Comment: Several hospitals asserted that CMS had underestimated the
total administrative burden and cost of meeting the requirements of the
rule and disagreed with the 12-hour estimate. Commenters stated several
reasons for this concern including not accounting for the number of
payers that could be present in a geographic region, the variety of
negotiated payment methodologies between hospitals and payers, and the
amount and scope of hospital resources required to gather the relevant
data from contracts and accounting systems. Some commenters also
indicated that the administrative burden and cost estimate should take
into consideration the electronic availability and display of data on a
user-friendly platform, and the cost to hospitals to regularly update
their standard charge information for monitoring and reporting.
Commenters cited the complexity of information to be provided and the
burden of gathering the data from disparate accounting and billing
systems. In particular, commenters indicated that some hospitals do not
already have their standard charge data available in any electronic
format, stating that they do not have contract management systems.
[[Page 65593]]
Several commenters disagreed with the estimate based on their
experiences with compliance with the requirements under the FY 2019
IPPS/LTCH PPS final rule (83 FR 41144) and state-based price
transparency requirements. For example, one commenter indicated that
chargemaster posting took 30 minutes to complete while another
commenter said they have already exceeded 12 hours just to comply with
posting their chargemaster data alone, while another commenter stated
their experience in making standard charges public under the FY 2019
IPPS/LTCH PPS final rule task required 60 to 100 hours. Another
commenter stated that their medical center spent 6 months of planning
and exceeded 50 hours to meet the requirements for price transparency
under the FY 2019 IPPS/LTCH PPS final rule. One commenter stated that
one of their hospital members voluntarily produced a website that
allows consumers to obtain estimates of their total out-of-pocket costs
by plugging in information from their insurers. Their online tool
covers 500 of their 6,000 chargemaster services items and the hospital
estimates it took them 20 FTE hours to set up the basic framework and
an ongoing two to four FTE hours per week to continue the build of all
services and test for errors and putting real-time insurance
information has taken an estimated 150 FTE hours to date. Similarly,
another commenter, a professional organization of individuals involved
in various aspects of healthcare financial management, writing on
behalf of hospital finance and management professionals based on a
survey of those individuals their members estimated that the average
time required to comply is 150 hours per hospital, based on a survey of
its members. One commenter stated that North Carolina implemented a
similar process to the ``service package'' portion of CMS' proposal
that included top 100 DRGs, top 20 outpatient surgeries, and top 20
imaging procedures at the State level with the de-identified minimum,
average and maximum ``accepted'' (collected) for closed accounts. The
commenter estimated that this effort required 500 hours of staff time
for the first reporting period. Several commenters provided estimates
of their anticipated burden and additional required FTEs to comply with
the proposed requirements for hospitals to make public standard charges
ranging from $1,000 to over $450,000 per hospital, 12.5 hours to 4,600
hours per hospital, and 3-10 employees per hospital.
Response: We appreciate the input provided by commenters. As
indicated in the CY 2020 OPPS/ASC proposed rule at 84 FR 39579 through
39580, based on an internal analysis of plans in the regulated
individual and small group insurance markets under the ACA, we
determined that per rating area there is an average of 1 to 400 payers
in the small group market (averaging nearly 40 products or lines of
service in each rating area) and an average of 1 to 200 payers in the
individual market (averaging nearly 20 products or lines of service in
each rating area). We therefore acknowledge and have taken into account
that hospitals may have many payer-specific negotiated charges to
compile and make public. We are also aware that hospitals and payers
utilize a variety of payment methodologies in their contracts, which is
why we have focused on the base payer rates negotiated between the
hospital and payer for the services hospitals provide (section II.D.3
of this final rule). We are also aware that the standard charge
information may be housed in disparate systems, for example, the gross
charges can be found in a hospital chargemaster while the payer-
specific negotiated charges can be found in the hospitals' revenue
cycle management system or in the rate tables associated with the in-
network contract.
Some commenters provided implementation estimates based on a
hospital system comprised of more than one hospital, and in such
instances, we converted the estimate to a per-hospital basis for our
analysis. Others (as in the North Carolina example above) appeared to
misunderstand the requirements by referencing a need to calculate and
determine paid amounts, in contrast to the policies we are finalizing
in this rule. Most of the outlier estimates submitted by commenters
were unaccompanied by any details regarding the assumptions that were
made to develop the estimate. We also noted that some commenters
provided burden estimates in reference to development of a consumer-
friendly price estimator tool, however, we are not requiring hospitals
to develop or display standard charge data in a tool. Our final
policies provide hospitals with flexibility to determine the most
appropriate internet-based format for purposes of complying with making
standard charges public in a consumer-friendly manner. Further, we
believe there are a variety of low cost formats a hospital could choose
as suggested in section II.F of this final rule. For example, making
public standard charges in a spreadsheet posted to a hospital website
would be one way to satisfy the requirements of this final rule. We
note that in response to comments on this issue, we have finalized a
policy that would reduce hospital reporting burden further,
specifically, we are finalizing a policy to specify that a hospital
offering an internet-based price estimator tool, that meets the
criteria we set forth in new 45 CFR 180.60, would be regarded as having
met the requirements to make public their standard charges for selected
shoppable services in a consumer-friendly manner. We also believe due
to their existing public displays of data, these hospitals already have
a framework or business processes that they can leverage that would
minimize additional burden.
We also acknowledge that some hospitals may require more time and
resources than others to gather the relevant data, prepare for its
electronic availability, display it in a consumer-friendly format, and
regularly update that information for monitoring and reporting. We
believe this to be true because some hospitals are already compiling
and reporting similar data to meet State price transparency
requirements and some are already making public their charges online in
consumer-friendly ways. The wide range of burden hours submitted by
commenters appears to support and reflect the notion that hospitals
nationwide are at different stages of readiness to offer consumers
transparent price information or are at various levels of participation
in posting of charge and price information. We also believe that
different hospitals may face different constraints when estimating
their burden and resources required.
With these considerations in mind, we agree that the burden
estimate should be revised to reflect an increased number of hours.
Commenters included individuals, hospitals and health systems, hospital
associations, and a health finance association. The commenters provided
estimates based on both their unique experiences as well as experiences
from a wide variety of health financial management experts and members.
As noted, estimates submitted by commenters (when calculated on a per
hospital basis) ranged from $1,000 to over $450,000 per hospital, 12.5
hours to 4,600 hours per hospital, and 3-10 employees per hospital.
Most estimates by commenters fell within a range of 60 to 250 hours per
hospital and approximately $4,800 to $20,000 per hospital, which we
conclude is reasonable given our assumption that hospitals are in
various states of readiness. Specifically, we
[[Page 65594]]
determined that a total burden of 150 hours for the first year is
reasonable for hospitals nationwide, based on estimates provided by an
organization with broad expertise and membership related to healthcare
financial management and a large health care system with multiple
hospitals. We believe an estimate of 150 hours per hospital for the
first year represents a broad industry view that takes into account the
range of hospital readiness and ability to comply with these rules.
Comment: Several commenters referenced the cost of ongoing
compliance with the rule in subsequent years and recommended an
annualized burden estimate that would be reduced from the initial year
of implementation of the requirement to publicize standard charges.
However, few commenters provided any specific recommendations as to the
potential ongoing costs. One commenter, for example, indicated that
they believed an estimate of ``several thousand dollars'' would be
reasonable to purchase software that would automatically update the
charges on an annual basis (thus suggesting that there would be no
maintenance costs). Two commenters suggested that maintenance costs
would be approximately 25 percent of implementation costs, however,
these commenters specifically discussed the costs associated with
pricing tool development, and not the burden associated with our final
policies. Another commenter estimated their compliance would require
$100,000 for the first year working with an outside vendor and close to
$50,000 in the out years, however, this commenter assumed that the file
would be updated as frequently as weekly. One commenter shared their
experience complying with a North Carolina requirement to calculate and
report amounts paid and indicated their maintenance burden was
approximately 40 percent of their initial effort.
Response: We agree with commenters that there may be a continued
cost of compliance with the rule past the initial year for some
hospitals and are therefore adding a burden assessment for maintenance
costs. We further agree with commenters that the annualized burden
should show a reduction compared to the initial year because hospitals
will have made the necessary updates to their software and business
operations during the first year, and become more acclimated to the
rule. Specifically, we believe there will no longer be a need for
hospitals to: (1) Consult with a clinical professional to make a
selection of shoppable services or to determine associated ancillary
services; or (2) consult with a lawyer to review the requirements of
this final rule as these are actions that will only need to take place
prior to the initial public display of data. We therefore estimate that
after eliminating the burden hours for these professionals and reducing
the applicable burden hours for business and general operations in
subsequent years, the total annual national burden for maintenance
costs in subsequent years would be 276,092 hours (46 hours x 6,002
hospitals) and total cost of $21,672,502 ($3,610.88 x 6,002 hospitals).
(See Table 6.)
Comment: Several commenters suggested that CMS engage in further
research or solicit additional input from stakeholders and focus
groups. Commenters recommended CMS work with a focus group of several
large health systems and industry consultants to conduct further
studies to understand the actual time and effort for implementation of
these requirements. A few commenters suggested that CMS should do more
research to better inform the COI and burden estimates and suggested
CMS seek in-depth input from hospitals on how their contracts are
developed and how negotiated rates may be displayed to include such
considerations as the full scope of current hospital reporting and
unintended consequences.
Response: We appreciate commenters' suggestions. However, we
believe that we have sufficient input as a result of our many RFIs and
listening sessions conducted over the course of the past 18 months, in
addition to the helpful input we received from comments to our CY 2020
OPPS/ASC proposed rule. We note that we are making some accommodations
in our final policies to relieve hospital burden and to provide
additional time for hospitals to come into compliance with these new
rules. Additionally, we are increasing our estimated burden in
accordance with the recommendations from commenters, and including
ongoing maintenance costs.
Final Estimate: In this final rule, we seek to promote price
transparency in hospital standard charges so that consumers can be
empowered to make more informed decisions about their healthcare. If
finalized, we believe these proposed requirements would represent an
important step towards putting consumers at the center of their
healthcare and ensuring they have access to needed information. We are
making modifications to several of our proposed policies that impact
our burden estimate. Specifically, we are adding three additional types
of standard charges that the hospital would have to make public: The
de-identified minimum negotiated charge, the de-identified maximum
negotiated charge and the discounted cash price. We continue to believe
that since these data exist in hospital financial and accounting
systems (although not always in electronic format), the burden for
making this information publicly available would be relatively minimal
for posting of gross charges, payer-specific negotiated charges, de-
identified minimum negotiated charge, de-identified maximum negotiated
charge, and discounted cash prices for all hospital items and services
online in a single machine-readable format as specified in the final
rule. In addition, we continue to estimate some burden associated with
hospitals making public their payer-specific negotiated charges, de-
identified minimum negotiated charge, de-identified maximum negotiated
charge, and cash discounted price for a set of at least 300 (70 CMS-
specified and at least 230 hospital-selected) shoppable services in a
consumer-friendly manner, with flexibility for hospitals to determine
the most consumer-friendly format.
Although we are increasing the number of the types of standard
charges a hospital must make public, we have reduced burden by
finalizing a policy to specify that a hospital offering an internet-
based price estimator tool, that meets the criteria we set forth in new
45 CFR 180.60, would be deemed as having met the requirements to make
public their standard charges for selected shoppable services in a
consumer-friendly manner. Because many hospitals already offer such
price estimator tools, we believe this policy will serve to minimize
the burden while meeting our policy goals of ensuring hospital pricing
information can be readily accessible in a consumer-friendly manner.
We estimate that the final rule applies to 6,002 hospitals
operating within the United States under the definition of ``hospital''
discussed in section II.B.1. of the final rule. To estimate this
number, we subtract 208 federally-owned or operated hospitals from the
total number of U.S. hospitals, 6,210 hospitals \176\ (6,210 total
hospitals -208 federally-owned or operated hospitals).
---------------------------------------------------------------------------
\176\ American Hospital Association. Fast Facts on U.S.
Hospitals, 2019. Available at: https://www.aha.org/statistics/fast-facts-us-hospitals.
---------------------------------------------------------------------------
We estimate the hourly cost for each labor category used in this
analysis by referencing Bureau of Labor Statistics report on
Occupational Employment
[[Page 65595]]
and Wages (May 2018 \177\) in Table 4. There are many professions
involved in any business's processes. Therefore, we use the wages of
General and Operations Managers as a proxy for management staff, the
wages of Lawyers as a proxy for legal staff, the wages of Network and
Computer Systems Administrators as a proxy for IT staff, the wage of
Registered Nurses as a proxy for clinical staff, and the wage of
Business Operations Specialists as a proxy for other business staff
throughout this analysis. Obtaining data on overhead costs is
challenging. Overhead costs vary greatly across industries and facility
sizes. In addition, the precise cost elements assigned as ``indirect''
or ``overhead'' costs, as opposed to direct costs or employee wages,
are subject to some interpretation at the facility level. Therefore, we
calculate the cost of overhead at 100 percent of the mean hourly wage
in line with the Hospital Inpatient Quality Reporting Program and the
Hospital Outpatient Quality Reporting Program (81 FR 57260 and 82 FR
59477, respectively).
---------------------------------------------------------------------------
\177\ Bureau of Labor Statistics. National Occupational
Employment and Wage Estimates, May 2018. Available at: https://www.bls.gov/oes/2018/may/oes_nat.htm.
Table 4--Occupation Titles and Wage Rates
----------------------------------------------------------------------------------------------------------------
Adjusted
Occupation title Occupation Mean hourly Fringe benefit hourly wage ($/
code wage ($/hr) ($/hr) hr)
----------------------------------------------------------------------------------------------------------------
Lawyers......................................... 23-1011 $69.34 $69.34 $138.68
General and Operations Managers................. 11-1021 59.56 59.56 119.12
Business Operations Specialists................. 13-1199 37.00 37.00 74.00
Registered Nurses............................... 29-1141 36.30 36.30 72.60
Network and Computer Systems Administrators..... 15-1142 41.86 41.86 83.72
----------------------------------------------------------------------------------------------------------------
In order to comply with regulatory updates finalized in the final
rule in the initial year of implementation, hospitals would first need
to review the rule. We estimate that this task would take a lawyer, on
average, 5 hours (at $138.68 per hour, which is based on the Bureau of
Labor Statistics (BLS) wage for Lawyers (23-1011) \178\) to perform
their review, and a general operations manager, on average, 5 hours (at
$119.12 per hour, which is based on the Bureau of Labor Statistics
(BLS) wage for General and Operations Managers (11-1021) \179\) to
review and determine compliance requirements. Therefore, for reviewing
the rule, we estimate 10 burden hours per hospital, with a total of
60,020 burden hours (10 hours x 6,002 hospitals). The cost is $1,289
per hospital (5 hours x $138.68 + 5 hours x $119.12), with a total cost
of $7,736,578 ($1,289.00 x 6,002 hospitals).
---------------------------------------------------------------------------
\178\ Bureau of Labor Statistics. Occupational Employment and
Wage Estimates, May 2018: 23-1011 Lawyers. Available at: https://www.bls.gov/oes/current/oes231011.htm.
\179\ Bureau of Labor Statistics. Occupational Employment and
Wage Estimates, May 2018: 11-1021 General and Operations Managers.
Available at: https://www.bls.gov/oes/current/oes111021.htm.
---------------------------------------------------------------------------
After reviewing the rule, hospitals would need to review their
policies and business practices in the context of the defined terms and
requirements for information collection then determine how to comply.
We believe this will require minimal changes for affected hospitals
because the standard charge information to be collected is already
compiled and maintained as part of hospitals' contracting, accounting
and billing systems. Some hospitals may have to consult directly with
their payer contracts to review and compile payer-specific negotiated
charges. We note that we are finalizing requirements for hospitals to
make public five types of standard charges including their gross
charges (as reflected in the chargemaster), their payer-specific
negotiated charges, discounted cash prices, the de-identified minimum
negotiated charge, and the de-identified maximum negotiated charge. All
five types of standard charges for all items and services, as
finalized, must be made public in a comprehensive machine-readable file
online. Additionally, all but gross charges would have to be made
public for a total of 300 shoppable services (70 CMS-specified and 230
hospital-selected) in a consumer-friendly manner, including listing the
charges for associated ancillary services provided by the hospital so
that the hospital charge information is more accessible and easier to
digest for consumers seeking to obtain pricing information for making
decisions about their treatment.
We estimate it would take a business operations specialist, on
average, 80 hours (at $74 per hour, which is based on the Bureau of
Labor Statistics (BLS) wage for Business Operations Specialists, All
Other (13-1199) \180\) to complete necessary processes and procedures
to gather and compile required information and post it to the internet
in the form and manner specified by the final rule. For this task, we
estimate 80 burden hours per hospital. The total burden hours are
480,160 hours (80 hours x 6,002 hospitals). The cost is $5,920 per
hospital (80 hours x $74), with a total cost of $35,531,840 ($5,920 x
6,002 hospitals).
---------------------------------------------------------------------------
\180\ Bureau of Labor Statistics. Occupational Employment and
Wages, May 2018: 13-1199 Business Operations Specialist, All Other.
Available at: https://www.bls.gov/oes/current/oes131199.htm.
---------------------------------------------------------------------------
We estimate that a network and computer system administrator would
spend, on average, 30 hours (at $83.72 per hour, which is based on the
Bureau of Labor Statistics (BLS) wage for Network and Computer Systems
Administrators (15-1142) \181\) to meet requirements specified by this
final rule. The total burden hours are 180,060 hours (30 hours x 6,002
hospitals). The cost is $2,511.60 per hospital (30 hours x $83.72),
with a total cost of $15,074,623 (180,060 hours x $83.72).
---------------------------------------------------------------------------
\181\ Bureau of Labor Statistics. Occupational Employment and
Wages, May 2018: 15-1142 Network and Computer System Administrators.
Available at: https://www.bls.gov/oes/current/oes151142.htm.
---------------------------------------------------------------------------
In addition, in the initial year of implementation, we estimate it
would take a registered nurse, on average, 30 hours (at $72.60 per
hour, which is based on Bureau of Labor Statistics (BLS) wage for
Registered Nurses (29-1141) \182\) to capture necessary clinical input
to determine a representative services package for a given service. We
estimate 30 burden hours per hospital. The total burden hours for this
task are 180,060 hours (30 hours x 6,002 hospitals). The cost is $2,178
per hospital (30 hours x $72.60), with a total cost of $13,072,356
($2,178 x 6,002 hospitals).
---------------------------------------------------------------------------
\182\ Bureau of Labor Statistics. Occupational Employment and
Wages, May 2018: 29-1141 Registered Nurses. Available at: https://www.bls.gov/oes/2018/may/oes291141.htm.
---------------------------------------------------------------------------
[[Page 65596]]
Therefore, we are finalizing the total burden estimate for the
first year to be 150 hours (10 hours + 80 hours + 30 hours + 30 hours)
per hospital with a cost of $11,898.60 ($1,289 + $5,920 + $2,178 +
$2,511.60) per hospital. We also estimate a total national burden of
900,300 hours (150 hours x 6,002 hospitals) and total cost of
$71,415,397 ($11,898.60 x 6,002 hospitals). (See Table 5.)
Table 5--Summary of Information of Collection Burdens for the First Year
--------------------------------------------------------------------------------------------------------------------------------------------------------
Burden per Total labor
Regulation section(s) OMB control No. Number of Number of response Total annual cost of
respondents responses (hours) burden (hours) reporting ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec. 180........................................ 0938-NEW 6,002 6,002 150 900,300 $71,415,397
--------------------------------------------------------------------------------------------------------------------------------------------------------
We anticipate that these costs will decline in subsequent years
after the first year of finalization of the rule as hospitals gain
additional efficiencies or may utilize the business processes and
system infrastructures or software that would be built or purchased
during the first year. We expect that the cost associated with
maintenance would be significantly less than the cost hospitals would
incur in the first year and would remain relatively level for a few
years. We further believe that the activities associated with
maintenance would only require General and Operations Managers,
Business Operations Specialists, and Network and Computer Systems
Administrators professions listed in Table 4. Utilizing their
corresponding Adjusted Hourly Wage rates from this table, we estimate
that it would take a general operations manager, on average, 2 hours to
review and determine updates in compliance with requirements.
Therefore, we estimate 2 burden hours per hospital, with a total of
12,004 burden hours (2 hours x 6,002 hospitals). The cost is $238.24
per hospital (2 hours x $119.12), with a total cost of $1,429,916
($238.24 x 6,002 hospitals).
We also estimate it would take a business operations specialist, on
average, 32 hours to gather and compile required information and post
it to the internet in the form and manner specified by the final rule.
For this task, we estimate 32 burden hours per hospital. The total
burden hours are 192,064 hours (32 hours x 6,002 hospitals). Using
Adjusted Hourly Wage rates from Table 4, the cost is $2,368 per
hospital (32 hours x $74.00), with a total cost of $14,212,736 ($2,368
x 6,002 hospitals).
Lastly, we estimate that a network and computer system
administrator would spend, on average, 12 hours to maintain
requirements specified by this final rule. The total burden hours are
72,024 hours (12 hours x 6,002 hospitals). The cost is $1,004.64 per
hospital (12 hours x $83.72), with a total cost of $6,029,849 (72,024
hours x $83.72).
Therefore, we are finalizing the total annual burden estimate for
subsequent years to be 46 hours (2 hours + 32 hours + 12 hours) per
hospital with a cost of $3,610.88 ($238.24 + $2,368.00 + $1,004.64) per
hospital. We also estimate a total annual national burden for
subsequent years of 276,092 hours (46 hours x 6,002 hospitals) and
total cost of $21,672,502 ($3,610.88 x 6,002 hospitals). (See Table 6.)
Table 6--Summary of Information of Collection Burdens for Subsquent Years
--------------------------------------------------------------------------------------------------------------------------------------------------------
Burden per Total labor
Regulation section(s) OMB control No. Number of Number of response Total annual cost of
respondents responses (hours) burden (hours) reporting ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec. 180........................................ 0938-NEW 6,002 6,002 46 276,092 $21,672,502
--------------------------------------------------------------------------------------------------------------------------------------------------------
V. Regulatory Impact Analysis
A. Statement of Need
As healthcare costs continue to rise, healthcare affordability has
become an area of intense focus. Healthcare spending is projected to
consume almost 20 percent of the economy by 2027.\183\ We believe that
one reason for this upward spending trajectory in spending is the lack
of transparency in healthcare pricing. Additionally, numerous studies
suggest that consumers want greater healthcare pricing transparency.
For example, a study of HDHP enrollees found that respondents wanted
additional healthcare price information so that they could make more
informed decisions about where to seek care based on price.\184\ Health
economists and other experts state that significant cost containment
cannot occur without widespread and sustained transparency in provider
prices. We believe there is a direct connection between transparency in
hospital standard charge information and having more affordable
healthcare and lower healthcare coverage costs. We believe healthcare
markets could work more efficiently and provide consumers with higher-
value healthcare if we promote policies that encourage choice and
competition. The intent of this rule is to promote price transparency
in hospital standard charges to implement section 2718(e) of the PHS
Act. We believe that in doing so, healthcare costs will decrease
through increased competition and consumers will be empowered to make
more informed decisions about their healthcare. We believe these
finalized requirements will represent an important step towards putting
consumers at the center of their healthcare and ensuring they have
access to needed information.
---------------------------------------------------------------------------
\183\ National Health Expenditure Fact Sheet, Centers for
Medicare & Medicaid Services, April 26, 2019. Available at: https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nhe-fact-sheet.html.
\184\ Sinaiko AD, et al. Cost-Sharing Obligations, High-
Deductible Health Plan Growth, and Shopping for Health Care:
Enrollees with Skin in the Game. JAMA Intern Med. March 2016;
176(3), 395-397. Available at: https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2482348.
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We further identified a need to impose CMPs to ensure compliance
with the requirements of this final rule. The amount of the CMP is $300
per day per hospital. We believe this amount to be sufficient to prompt
hospitals to
[[Page 65597]]
timely and properly display standard charges in both machine-readable
and consumer-friendly formats in accordance with the requirements of
this final rule.
B. Overall Impact
We have examined the impacts of this rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), section 1102(b) of the SSA, section 202 of the
Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4),
Executive Order 13132 on Federalism (August 4, 1999), the Congressional
Review Act (5 U.S.C. 804(2)), and Executive Order 13771 on Reducing
Regulation and Controlling Regulatory Costs (January 30, 2017).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Section
3(f) of Executive Order 12866 defines a ``significant regulatory
action'' as an action that is likely to result in a rule: (1) Having an
annual effect on the economy of $100 million or more in any 1 year, or
adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or state, local or tribal governments or communities (also
referred to as ``economically significant''); (2) creating a serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive Order.
An RIA must be prepared for major rules with economically
significant effects ($100 million or more in any 1 year). In aggregate,
we estimate that this rule will cost approximately $71.4 million for
hospitals to implement nationwide, in the initial year of
implementation. In subsequent years, we anticipate minimal burden on
hospitals for remaining compliant with the requirements to make public
standard charges by annually updating the data they make public
because, as explained in the CY 2020 OPPS/ASC proposed rule, we believe
most of the effort will be in reviewing the rule for compliance,
selecting the hospital `shoppable' services, determining the ancillary
services and displaying the shoppable services in a consumer-friendly
manner. After the first year, hospitals would only need to update the
data at least once every 12 months. We estimate that these annual
updates and general operations for complying with the final rule will
cost hospitals $21,672,502 annually after the initial year.
Almost all hospitals operating within the United States will be
affected by the requirement to make standard charges public in both a
machine-readable, and consumer-friendly manner. Although the level of
disclosure of standard charge data required under this final rule is
unprecedented, we do not expect the requirements of the final rule to
disrupt normal business operations because hospitals already keep and
maintain these data within their billing and accounting systems.
However, OMB has determined that the actions are economically
significant within the meaning of section 3(f) of the Executive Order.
Therefore, OMB has reviewed this regulation, and the Department of
Health and Human Services has provided the following assessment of its
impact.
C. Anticipated Effects
This final rule would affect each hospital (as defined at 45 CFR
180.20) operating within the United States. We estimate that the final
rule applies to 6,002 hospitals operating within the United States
under the definition of ``hospital'' discussed in section II.B.1. of
this final rule. To estimate this number, we subtracted 208 federally-
owned or operated hospitals from the total number of United States
hospitals, 6,210 hospitals.\185\ In order to comply with regulatory
updates finalized in the final rule in the initial year, hospitals
would first need to review the rule. We estimate that this task would
take a lawyer, on average, 5 hours to perform their review, and a
general operations manager, on average, 5 hours to review and determine
compliance requirements. We then estimate it would take a business
operations specialist, on average, 80 hours to complete necessary
processes and procedures to gather and compile required information and
post it to the internet in the form and manner specified by the final
rule. We also estimate that a network and computer system administrator
would spend, on average, 30 hours to meet requirements specified by
this final rule. Lastly, we estimate it would take a registered nurse,
on average, 30 hours to capture necessary clinical input to determine a
representative services package for a given service. Therefore, we are
finalizing the total burden estimate to be 150 hours per hospital for
the first year immediately following the finalization of this rule.
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\185\ American Hospital Association. Fast Facts on U.S.
Hospitals, 2019. Available at: https://www.aha.org/statistics/fast-facts-us-hospitals.
---------------------------------------------------------------------------
For the burden hours in subsequent years, we estimate that it would
take a general operations manager, on average, 2 hours to review and
determine updates in compliance requirements, a business operations
specialist, on average, 32 hours to update necessary processes and
procedures to gather and compile required information and post it to
the internet in the form and manner specified by this final rule, and a
network and computer system administrator would spend, on average, 12
hours to maintain requirements specified by this final rule. Therefore,
we are finalizing the total burden estimate for the subsequent years to
be 46 hours per hospital.
In order to estimate the cost associated with these activities, we
use the hourly cost for each labor category used in this analysis by
referencing Bureau of Labor Statistics report on Occupational
Employment and Wages (May 2018 \186\). There are many professions
involved in any business's processes. Therefore, we use the wage rate
of a profession as a proxy for professional activities under such
category. Also, we calculate the cost of overhead at 100 percent of the
mean hourly wage in line with the Hospital Inpatient Quality Reporting
Program and the Hospital Outpatient Quality Reporting Program (81 FR
57260 and 82 FR 59477, respectively). As a result, we use adjusted
hourly wage rate of $138.68 for lawyers, adjusted hourly wage rate of
$119.12 for general and operational managers, adjusted hourly wage rate
of $74 for business operations specialists, adjusted hourly wage rate
of $83.72 for network and computer systems administrators and hourly
wage rate of $72.60 for registered nurses. With these numbers, we
estimate a cost of $11,898.60 per hospital with total cost of $71.4
million for affected hospitals nationwide in the initial period for
[[Page 65598]]
implementing the requirements we are finalizing with this rule.
---------------------------------------------------------------------------
\186\ Bureau of Labor Statistics. National Occupational
Employment and Wage Estimates, May 2018. Available at: https://www.bls.gov/oes/2018/may/oes_nat.htm.
---------------------------------------------------------------------------
1. Effects on Private Sector
As discussed in the CY 2020 OPPS/ASC proposed rule (84 FR 39631
through 39632), we considered the estimated effects on the private
sector, and welcomed public comments on the impact of the proposed
requirements on the private sector. As discussed in the Collection of
Information section of this final rule, we continue to believe the
burden on hospitals would be minimal. We also indicated that we believe
the requirements in the final rule would encourage hospitals to adhere
to best practices and industry standards by developing more robust and
more efficient revenue integrity processes while working to comply with
these requirements. Additionally, we are finalizing policies that could
reduce potential compliance burdens, for example, we are finalizing as
a modification that a hospital offering an internet-based price
estimator tool that meets applicable requirements, is regarded as
having met requirements to make public its standard charges for
selected shoppable services in a consumer-friendly manner. Some
hospitals already offer such tools, so fewer hospitals would need to
develop display of consumer-friendly pricing information from scratch.
Moreover, such hospitals would spend fewer hours complying because they
would only need to review their existing price estimator tool to
evaluate whether it meets the criteria specified at 180.60(a)(2).
Therefore, we considered these new variables in estimating burden
and cost after the initial period of implementation, and determined
their value would largely depend upon the hospitals' initial readiness
and compliance status. We believe some variables serve to reduce the
hours required for one or more activities associated with complying
with the final rule after the first year. For example, to be compliant
initially, the hospital must determine its shoppable services and
ancillary services for display, must determine the most consumer-
friendly format and display site, and must collect payer-specific
negotiated charge information from its contracts or existing revenue
management cycle process. Such activities are necessary only in the
initial period of implementation for hospitals that do not already
adhere to industry standards and best practices; once those activities
have been completed, a hospital would simply need to update the
standard charge data on an annual basis going forward. In addition,
these variables may correlate and drive more changes in factors that
would affect cost estimating after the initial period of
implementation. Due to these considerations, we provided an updated
burden estimate that reduces the number of total annual hours in
subsequent years and are finalizing with this rule.
Comment: A few commenters stated that CMS has not demonstrated that
the benefit of the policies outweigh the costs of implementing the
rule.
Response: We appreciate commenters' input. However, we disagree
with this comment. This final rule seeks to further advance hospital
price transparency efforts that initiated with the FY 2015 IPPS/LTCH
PPS and FY 2019 IPPS/LTCH PPS rules seeking to implement section
2718(e) of the PHS Act. At the time these prior rules were published,
and as echoed in the comments we are responding to in this final rule,
we heard from many stakeholders and public commenters that more
guidelines and specificity around the form and manner in which
hospitals make standard charges public would be helpful. Such
commenters requested that CMS include requirements for more types of
standard charges, as gross charges or the chargemaster alone are not
sufficient for patients to estimate their financial obligations or to
drive improvements in value-based care. This final rule goes a step
farther by requiring hospitals to make public payer-specific negotiated
charges, the de-identified minimum negotiated charge, the de-identified
maximum negotiated charge, and discounted cash prices, in addition to
gross charges for all items and services. Throughout section II of this
final rule, we discuss the benefits of informing and empowering the
public with hospital price information. These requirements would make
public data that consumers could use to better understand the cost of
care, and inform their healthcare decision-making, before receiving
services. Further, technology vendors may innovate and create new
products, including internet-based price estimator tools, or upgrade
existing technologies to support hospitals in meeting these
requirements and aiding consumers and healthcare providers in using
data that is made public by hospitals. Other members of the public,
such as employers, would be better informed to monitor insurer
effectiveness and to help their employees shop for value.
In section V of this final rule, we analyze effects of these
requirements on both the private sector and consumers. In section IV of
this final rule, we detail how we determined the estimated burden of
the requirements we are finalizing, at 150 hours with a cost of
$11,898.60 per hospital, and how we arrived at these figures. In the
following sub-sections of the RIA, we categorize our analyses within
the estimated effects on consumers, small entities, small rural
hospitals, and alternatives considered. We provide analyses from these
perspectives to demonstrate that these requirements would bring
consumers and other stakeholders' insights into healthcare costs, as
well as the reasonable burden estimate for hospitals that takes into
account commenters' concerns. In summary, we believe the overall
benefits to consumers and healthcare markets nationwide will exceed the
burden. For the initial year of implementation, we are finalizing an
estimate of 150 hours and cost $11,898.60 per hospital for the burden
of the requirements we are finalizing in this final rule that takes
into account input from public comments.
Comment: We received some comments on the potential impacts of the
proposed hospital price transparency requirements on CAHs, rural
hospitals, and SCHs, including their suggestion that CMS exempt these
entities from part or all requirements to make standard charges public.
Response: We believe that the benefits to consumers, and to the
general public as a whole, outweigh the operational challenges faced by
these entities. Further, elsewhere in the RIA (see section V.C.5 of
this final rule), we analyze effects on small rural hospitals.
Comment: Many commenters cautioned that disclosure of payer-
specific negotiated charges would increase, not decrease, healthcare
costs in certain markets due to anticompetitive behaviors or increases
in prices as a result of hospital knowledge of better rates negotiated
by neighboring hospitals.
Response: We continue to believe, as supported by (for instance)
academic research, economics research, or both, that the healthcare
market could work more efficiently and provide consumers with high-
value healthcare through policies that encourage choice and
competition. Research suggests that in a normal market, price
transparency (more generally) will result in reduced rates,
overall.\187\ There are models in the
[[Page 65599]]
States that have shown that release of the information has driven costs
down not up.\188\ On aggregate, we believe the effects on competition,
resulting from hospital price transparency, would drive down healthcare
prices. We acknowledge, that knowledge by a hospital of other
hospitals' payer-specific negotiated charges could also drive up rates;
especially if a hospital discovers it is currently being paid less than
other hospitals by a payer and, thereby, negotiates higher rates. On
the other hand, payers may negotiate lower rates, if they discover
hospitals have negotiated lower rates with competing payers.
---------------------------------------------------------------------------
\187\ Christensen HB, et al. 2018. ``The Only Prescription Is
Transparency: The Effect of Charge-Price-Transparency Regulation on
Healthcare Prices.'' SSRN Scholarly Paper ID 2343367. Rochester, NY:
Social Science Research Network. Available at: https://papers.ssrn.com/abstract=2343367.
\188\ Brown ZY. Equilibrium Effects of Health Care Price
Information. The Review of Economics and Statistics. Published
October 2019; 101:4, 699-712. Available at: https://www-
personal.umich.edu/~zachb/zbrown_eqm_effects_price_transparency.pdf.
---------------------------------------------------------------------------
Comment: Typically described in the context of commenters' concerns
on specific proposals, and as described within section II of this final
rule, commenters suggested a number of possible unanticipated
consequences for the private sector of the proposed requirements for
hospitals to make public standard charges, including the following:
The disclosure of payer-specific negotiated charges is
likely to result in anti-competitive behavior and anti-trust exposure.
Under the proposed requirements for hospitals to make
public standard charges including payer-specific negotiated charges,
hospitals would be exposed to litigation risk, due to the belief that
these contractual reimbursement rates are proprietary.
The proposal would contradict the goals of CMS' Patients-
over Paperwork initiative.
The requirement to disclose standard charges for all items
and services as defined under the CY 2020 OPPS/ASC proposed rule would
result in hospital closures.
Complying with the requirements, as proposed, would be
cost-prohibitive for CAHs, rural hospitals, and small hospitals, among
others.
The CY 2020 OPPS/ASC proposed rule's focus on standard
charges would negatively impact hospitals' transition to value-based
care.
Response: We appreciate commenters' concerns, and we have addressed
these concerns elsewhere in this final rule. We do not believe that
these concerns affect our estimate of the impact of the requirements we
are finalizing, and accordingly we decline to adjust our economic
analyses based on these concerns alone.
As we detailed in Section IV.B, we estimated the total burden to
implement the requirements of this rule to be 150 hours at a cost of
$11,898.60 per hospital. We noted that hospitals nationwide are at
different stages of readiness to offer consumers transparent price
information or are at various levels of participation in posting of
charge and price information. We also believe that different hospitals
may face different constraints when estimating their burden and
resources required. We believe that some hospitals will already have a
framework or business processes in place that they can leverage that
would minimize additional burden. However, there will be other
hospitals that will have additional burden, above our projected 150
hours we estimated, to meet the requirements of this rule. Therefore,
we are providing alternative estimates on a range of hours in this
impact analysis. We note that most commenters stated that a reasonable
estimate for burden based for implementing existing requirements to
disclose standard charges is within the range of 60-250 hours,
therefore we are providing cost estimates ranging from 60 hours to 250
hours.
For a low estimate, we now estimate it would take a take a lawyer 2
hours (at $138.68 per hour); a general operations manager 2 hours (at
$119.12 per hour); business operations specialist 32 hours (at $74 per
hour), a network and computer system administrator 12 hours (at $83.72
per hour); a registered nurse 12 hours (at $72.60 per hour). Therefore,
we are providing a low estimate of the total burden for the first year
to be 60 hours (2 hours + 2 hours + 32 hours + 12 hours + 12 hours) per
hospital with a cost of $4,759.44 per hospital. Table 7 provides the
total cost.
For a high estimate, we now estimate it would take a take a lawyer
8 hours (at $138.68 per hour); a general operations manager 8 hours (at
$119.12 per hour); business operations specialist 134 hours (at $74 per
hour), a network and computer system administrator 50 hours (at $83.72
per hour); a registered nurse 50 hours (at $72.60 per hour). Therefore,
we are providing a high estimate of the total burden for the first year
to be 250 hours (8 hours + 8 hours + 134 hours + 50 hours + 50 hours)
per hospital with a cost of $19,794.40 per hospital. Table 7 provides
the total cost.
Table 7--Cost Range Estimates
------------------------------------------------------------------------
Hours per hospitals Cost per hospital Total cost
------------------------------------------------------------------------
60 4,759.44 28,566,159
250 19,794.40 118,805,989
------------------------------------------------------------------------
2. Effects on Consumers
As discussed in the CY 2020 OPPS/ASC proposed rule (84 FR 39632
through 39633), we considered the estimated effects on the consumers,
and welcomed public comments on the impact of the proposed requirements
on consumers. As indicated in this final rule, we believe the
requirements from this final rule will make public data necessary for
healthcare consumers to better understand how the level of price
dispersion in various healthcare markets and its impacts on healthcare
spending and consumer out-of-pocket costs. The information may also
benefit other consumers of these data, for example, employers, third
party tool developers, clinicians at the point of care, or economics
research to drive value-based policy development. We noted in the CY
2020 OPPS/ASC proposed rule that the negotiated charges for various
procedures vary widely within and across geographic regions in the
United States.\189\ Some factors associated with the level of hospital
price dispersion in a geographic area are the hospital's size,
healthcare demand, labor costs, and technology, although it was the
hospital's market power (level of competition) that was most positively
associated with high price dispersion.190 191 One major
barrier to fully understanding healthcare price variation (and
understanding the impact of transparency of healthcare pricing in
general) is the lack of availability of negotiated charges to
researchers and the public.\192\ We continue to believe that
requirements from this final rule will make hospital charge information
available, which will generate a better understanding of (1) hospital
price dispersion, and (2) the relationship between hospital price
dispersion and healthcare spending. Additionally, we believe
understanding this relationship through the disclosure of pricing data
could lead to downward price pressure and reductions in overall
spending system-wide.
---------------------------------------------------------------------------
\189\ Kennedy K, et al. Health Care Cost Institute. Past the
Price Index: Exploring Actual Prices Paid for Specific Services by
Metro Area. Healthy Marketplace Index. April 30, 2019. Available at:
https://www.healthcostinstitute.org/blog/entry/hmi-2019-service-prices.
\190\ Cooper Z, et al. The Price Ain't Right? Hospital Prices
and Health Spending on the Privately Insured. The Quarterly Journal
of Economics. December 2015. Available at: https://pdfs.semanticscholar.org/cb9c/f90786cc39ddac6d88f3ba1074a7c2d5f0a5.pdf.
\191\ Bai G and Anderson GF. Market Power: Price Variation Among
Commercial Insurers For Hospital Services. Health Affairs. Oct 2018;
37(10): 1615-1622. Available at: https://www.healthaffairs.org/doi/10.1377/hlthaff.2018.0567.
\192\ Ibid.
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[[Page 65600]]
Consumers may feel more satisfied with their care when they are
empowered to make decisions about their treatment. A recent survey
\193\ indicated a strong desire for price transparency and openness.
Eighty-eight percent of the population polled, demanded improved
transparency with their total financial responsibility, including co-
pays and deductibles. Other studies such suggest that improving a
patient's financial experience served as the biggest area to improve
overall customer satisfaction.\194\ Literature regarding consumer
engagement with existing price transparency interventions demonstrates
that disclosing price information positively impacts consumers by
allowing them to compare prices for common procedures and shift their
demand towards lower-priced options. One study examined consumer use of
an employer-sponsored, private price transparency tool and its impact
on claims payments for three common medical services: Laboratory tests;
advanced imaging services; and clinician office visits.\195\ That study
found that those who used the tool had lower claims payments by
approximately 14 percent for laboratory tests; 13 percent for advanced
imaging services; and approximately one percent for office visits
compared to those who did not use the tool. Those using the tool mainly
searched for information on shoppable services and also tended to have
more limited insurance coverage.
---------------------------------------------------------------------------
\193\ See Gruessner V. Consumer Satisfaction Dips When Payers
Lack Price Transparency. Private Payers News (October 3, 2016).
Available at: https://healthpayerintelligence.com/news/consumer-satisfaction-dips-when-payers-lack-price-transparency.
\194\ See for example, Government Accountability Office.
September 2011. Health Care Price Transparency: Meaningful Price
Information Is Difficult for Consumers to Obtain Prior to Receiving
Care. Available at: https://www.gao.gov/assets/590/585400.pdf.
Experian Health, Improve the healthcare financial journey. Patient
Engagement (June 21, 2018). Available at: https://www.experian.com/blogs/healthcare/2018/06/healthcare-financial-journey/.
\195\ Whaley C, et al. ``Association Between Availability of
Health Service Prices and Payments for These Services.'' JAMA. 2014;
312(16):1670-1676. Available at https://jamanetwork.com/journals/jama/fullarticle/1917438.
---------------------------------------------------------------------------
Price transparency initiatives have more impact when they are
combined with other cost control tools like reference-based pricing.
For example, for a plan with reference-based pricing, price
transparency tools were associated with a reduction of 32 percent in
lab test prices over three years.\196\
---------------------------------------------------------------------------
\196\ Robinson JC, Whaley BA, Brown TT. Association of Reference
Pricing for Diagnostic Laboratory Testing With Changes in Patient
(2016) JAMA Int Med. 2016; 176(9); 1353-1359. Available at: https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2536187.
---------------------------------------------------------------------------
Employers have also been encouraging consumers to share in the
savings realized from engaging in comparative shopping. The state of
Kentucky's public employee benefit program's price transparency shared
savings initiative has saved state taxpayers $13 million dollars since
its inception in 2015, and almost $2 million in cash benefits have been
shared with the state's public employees.\197\ Another study of a group
of 35 self-funded employers who deployed a shared savings program in
2017 demonstrated an overall 2.1 percent cost reduction of the cost of
medical care and total savings of $23 million a year, with 23 percent
of the employees receiving shared savings rewards.\198\
---------------------------------------------------------------------------
\197\ Rhoads J. Right to Shop for Public Employees: How Health
Care Incentives are Saving Money in Kentucky. Foundation for
Government Accountability. March 8, 2019. Available at: https://thefga.org/wp-content/uploads/2019/03/RTS-Kentucky-HealthCareIncentivesSavingMoney-DRAFT8.pdf.
\198\ Whaley CM, et al. Paying Patients To Switch: Impact Of A
Rewards Program On Choice Of Providers, Prices, And Utilization.
Health Affairs. March 2019. Available at: https://www.healthaffairs.org/doi/10.1377/hlthaff.2018.05068.
---------------------------------------------------------------------------
Finally, studies indicate that the existence of comparative price
shopping information has the effect of reducing healthcare costs for
everyone, regardless of whether they engage in shopping behavior. A
national study of state price transparency efforts found an overall
reduction of hospital pricing by 5 percent and a state of New Hampshire
effort reduced consumer costs by 5 percent.199 200
---------------------------------------------------------------------------
\199\ Christensen HB, et al. 2018. ``The Only Prescription Is
Transparency: The Effect of Charge-Price-Transparency Regulation on
Healthcare Prices.'' SSRN Scholarly Paper ID 2343367. Rochester, NY:
Social Science Research Network. Available at: https://papers.ssrn.com/abstract=2343367.
\200\ Brown ZY. Equilibrium Effects of Health Care Price
Information. The Review of Economics and Statistics. Published
October 2019; 101:4, 699-712. Available at: https://www-
personal.umich.edu/~zachb/zbrown_eqm_effects_price_transparency.pdf.
---------------------------------------------------------------------------
Comment: Typically described in the context of commenters' concerns
on specific proposals, and as described within section II of this final
rule, commenters suggested a number of possible unanticipated
consequences for consumers of the proposed requirements for hospitals
to make public standard charges, including the following:
The volume of data required for the display of standard
charges under the rule would confuse consumers and potentially cause
them to seek out the cheapest care, rather than the most effective or
best quality care.
The burden of understanding costs of care would shift from
hospitals and/or payers to consumers.
The information on standard charges would still not be
sufficient to inform consumers of their plan-specific, out-of-pocket
costs. The concerns included that the required information would be
insufficient for consumers to rely on, as well as concerns that too
much information is being required, will be overwhelming and
potentially confusing to consumers.
Response: We appreciate commenters' concerns, and we have addressed
these concerns elsewhere in this final rule. We believe the
requirements we are finalizing for hospitals to make public standard
charges will provide information to consumers that helps inform their
healthcare decision-making, and therefore ultimately benefit consumers.
Informed decision-making, in turn, may have other positive effects; for
example, as research suggests, informed healthcare consumers, that have
a price estimate before getting care are more likely to pay their bills
in a timely manner.201 202
---------------------------------------------------------------------------
\201\ Kutscher, B. ``Report: Consumers demand price
transparency, but at what cost?'' Modern Healthcare. June 2015.
Available at: https://www.modernhealthcare.com/article/20150623/NEWS/150629957/consumers-demand-price-transparency-but-at-what-cost.
\202\ HFMA Executive Roundtable: Reimagining Patient Access.
December 2015. Available at: https://api.hfma.org/Content.aspx?id=43731.
---------------------------------------------------------------------------
We do not believe that these concerns about unintended consequences
on consumers affect our estimate of the impact of the requirements we
are finalizing, and accordingly we decline to adjust our economic
analyses based on these concerns alone.
3. Effects on Small Entities
The RFA requires agencies to analyze options for regulatory relief
of small entities, if a rule has a significant impact on a substantial
number of small entities. More than half of 6,002 hospitals are small
entities, either by nonprofit status or by having revenues of less than
$41.5 million in any 1 year.\203\ We analyzed these hospitals and found
that the estimated burden from this final rule never exceeded 1 percent
of reported revenue for any hospital in this category, including the
[[Page 65601]]
hospital with the lowest revenue.\204\ For the over 3,000 hospitals
that meet the standards for small entities defined by the SBA, we
estimate the burden from this final rule to be, on average, 0.007
percent of hospital total annual revenue. It is reasonable to assume
that the inclusion or exclusion of hospitals with nonprofit status
would not drive the percentages to go over the threshold because even
the historically lowest revenue hospitals indicate the burden would not
exceed at most about 1 percent of total hospital revenue in the most
extreme case. As its measure of significant economic impact on a
substantial number of small entities, HHS uses a change in revenue of
more than 3 to 5 percent. We do not believe that this threshold will be
reached by the requirements in this final rule. As a result, the
Secretary has determined that this final rule will not have a
significant impact on a substantial number of small entities.
---------------------------------------------------------------------------
\203\ U. S. Small Business Administration, Table of Small
Business Size Standards, Matched to North American Industry
Classification System Codes (size standards effective August 19,
2019). Available at: https://www.sba.gov/sites/default/files/2019-08/SBA%20Table%20of%20Size%20Standards_Effective%20Aug%2019%2C%202019_Rev.pdf.
\204\ CMS Office of the Actuary analysis of 2016 Medicare Cost
Report data.
---------------------------------------------------------------------------
4. Effects on Small Rural Hospitals
Section 1102(b) of the SSA requires us to prepare an RIA if a rule
may have a significant impact on the operations of a substantial number
of small rural hospitals. This analysis must conform to the provisions
of section 604 of the RFA. For purposes of section 1102(b) of the SSA,
we define a small rural hospital as a hospital that is located outside
of a metropolitan statistical area and has fewer than 100 beds. We
identified almost 1,900 hospitals as having rural status and fewer than
100 beds. We note that commenters submitted various concerns related to
burden for smaller or less resourced hospitals. We have responded to
these concerns throughout this final rule. As noted previously, we are
aware that hospitals are in varying stages of readiness for
implementation of this final rule. While smaller or rural hospitals may
not have the staff or automation that larger hospital systems may have
(which may increase burden relative to a better resourced hospital or
hospital system), they are likely to have far fewer contracts with
payers and provide fewer items and services overall, which would reduce
rural hospital burden compared to larger hospitals in regions with many
payers. For this reason it is difficult to determine a unique impact on
small rural hospitals. For these small, rural hospitals, we estimate
the burden from this final rule to be, on average, 0.037 percent of
hospital total annual revenue.\205\ Therefore, we conclude that this
final rule will not have a significant impact on the operations of a
substantial number of small rural hospitals.
---------------------------------------------------------------------------
\205\ Hospital Cost Report PUF is used for calculating these
statistics. The latest PUF file publicly available is a 2014 dataset
as of July 15, 2018, available at this link: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Cost-Report/HospitalCostPUF.html.
---------------------------------------------------------------------------
5. Unfunded Mandates
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2019, that
threshold is approximately $154 million. This final rule contains no
such unfunded mandates.
6. Federalism Analysis
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on state
and local governments, preempts state law, or otherwise has Federalism
implications. Since this regulation does not impose any costs on state
or local governments, the requirements of Executive Order 13132 are not
applicable.
D. Alternatives Considered
The final rule promulgates rules for hospital compliance with
section 2718(e) of the PHS Act and aims to make price information more
readily available to the public. As described in the CY 2020 OPPS/ASC
proposed rule (84 FR 39633), we considered a number of alternative
approaches to maximize the value and accessibility of these data to the
public generally and directly to consumers. For example, proposals to
require release of hospital standard charge data in an API format. We
also considered other types of ``standard charges'' that could be
useful to consumers. For example, in addition to or instead of the
requirement to disclose gross charges and payer-specific charges, we
sought comment on whether we should consider a definition of `standard
charge' to be a volume-driven negotiated charge, the minimum/median/
maximum negotiated charge, or all allowed charges. Such charges could
be relevant to specific groups of individuals, particularly those with
health insurance coverage. We also sought comment on a definition of
`standard charge' that might be relevant to subgroups of individuals
who are self-pay, specifically, types of standard charges representing
the discounted cash price for a service package, or the median cash
price.
We finalized the definition of standard charges to include gross
charge (as discussed in section II.D.2 of this final rule), and payer-
specific negotiated charge (as discussed in section II.D.3), as
proposed. We finalized modifications to include within the definition
of standard charges the discounted cash price (as described in section
II.D.4.c of this final rule), as well as the de-identified minimum
negotiated charge, and de-identified maximum negotiated charge (as
discussed in section II.D.4.d of this final rule). Of the other
alternatives considered, we determined that allowed amounts of plans
that are not negotiated are already publicly disclosed (as discussed in
section II.D.4.b of this final rule), and that the median negotiated
charge would have limited usefulness for consumers (as discussed in
section II.D.4.d of this final rule). We also decided not to require
standardization in the release of hospital standard charges, such as by
requiring data be presented in an API format, noting that the
requirements we are finalizing in this final rule, for hospitals to
make public their standard charges, are a good initial step.
As a result of comments, we considered an alternative in which CMS
would specify all 300 shoppable services and specify the corresponding
ancillary services. We estimate that this could reduce burden for
hospitals by removing the clinical input necessary to develop such
service groupings which would result in a first year burden of $9,721
per hospital, or $58.3 million for all hospitals.
Finally, we also considered an alternative approach that would
require hospitals to make public a comprehensive machine-readable file
of all standard charges for all hospital items and services, but not
require hospitals to display charges for shoppable services in a
consumer-friendly manner. We estimate that this could reduce burden for
hospitals by removing the clinical input necessary and decrease the
number of hours for the other professions which would result in a first
year burden of $4,860 per hospital, or $29.2 million for all hospitals.
E. Accounting Statement and Table
In accordance with OMB Circular A-4, Table 8 depicts an accounting
statement summarizing the assessment of the benefits and costs
associated with this regulatory action.
[[Page 65602]]
Table 8--Accounting Statement Estimated Impacts
[CYs 2020-2022]
----------------------------------------------------------------------------------------------------------------
Units
Primary -----------------------------------------------
Category estimate Discount rate Period
(million) Year dollars (%) covered
----------------------------------------------------------------------------------------------------------------
Benefits
----------------------------------------------------------------------------------------------------------------
Qualitative..................................... The rule is anticipated to have the potential to reduce the
range of prices charged by hospitals such that a net savings
would result for payers and consumers from a corresponding
reduction in income to hospitals. Price transparency would
help to create a healthcare information ecosystem that allows
and encourages the healthcare market to tailor products and
services to compete for patients, thereby increasing quality,
decreasing costs, and helping them live better, healthier
lives.
----------------------------------------------------------------------------------------------------------------
Costs
----------------------------------------------------------------------------------------------------------------
Annualized monetized $ millions/year............ $39.4 2019 7 2020-2022
38.7 2019 3 2020-2022
----------------------------------------------------------------------------------------------------------------
F. Regulatory Reform Analysis Under E.O. 13771
Executive Order 13771, titled Reducing Regulation and Controlling
Regulatory Costs, was issued on January 30, 2017 and requires that the
costs associated with significant new regulations ``shall, to the
extent permitted by law, be offset by the elimination of existing costs
associated with at least two prior regulations.'' This final rule is
considered an Executive Order 13771 regulatory action. We estimate the
rule generates $23.0 million in annualized costs in 2016 dollars,
discounted at 7 percent relative to year 2016 over a perpetual time
horizon. Details on the estimated costs of this rule can be found in
the preceding and subsequent analyses.
G. Conclusion
The analysis in this section, together with the remainder of this
preamble, provides an RIA. In accordance with the provisions of
Executive Order 12866, this regulation was reviewed by OMB.
List of Subjects in 45 CFR Part 180
Definitions, Hospitals, Reporting and recordkeeping requirements.
0
For reasons stated in the preamble of this document, the Department of
Health and Human Services amends 45 CFR subtitle A by adding subchapter
E to read as follows:
Subchapter E--Price Transparency
PART 180--HOSPITAL PRICE TRANSPARENCY
PARTS 181-199 [RESERVED]
PART 180--HOSPITAL PRICE TRANSPARENCY
Sec.
Subpart A--General Provisions
180.10 Basis and scope.
180.20 Definitions.
180.30 Applicability.
Subpart B--Public Disclosure Requirements
180.40 General requirements.
180.50 Requirements for making public hospital standard charges for
all items and services.
180.60 Requirements for displaying shoppable services in a consumer-
friendly manner.
Subpart C--Monitoring and Penalties for Noncompliance
180.70 Monitoring and enforcement.
180.80 Corrective action plans.
180.90 Civil monetary penalties.
Subpart D--Appeals of Civil Monetary Penalties
180.100 Appeal of penalty.
180.110 Failure to request a hearing.
Authority: 42 U.S.C. 300gg-18, 42 U.S.C. 1302.
Subpart A--General Provisions
Sec. 180.10 Basis and scope.
This part implements section 2718(e) of the Public Health Service
(PHS) Act, which requires each hospital operating within the United
States, for each year, to establish, update, and make public a list of
the hospital's standard charges for items and services provided by the
hospital, including for diagnosis-related groups (DRGs) established
under section 1886(d)(4) of the Social Security Act. This part also
implements section 2718(b)(3) of the PHS Act, to the extent that
section authorizes CMS to promulgate regulations for enforcing section
2718(e). This part also implements section 1102(a) of the Social
Security Act, which authorizes the Secretary to make and publish rules
and regulations, not inconsistent with that Act, as may be necessary to
the efficient administration of the functions for which the Secretary
is charged under that Act.
Sec. 180.20 Definitions.
The following definitions apply to this part, unless specified
otherwise:
Ancillary service means an item or service a hospital customarily
provides as part of or in conjunction with a shoppable primary service.
Chargemaster (Charge Description Master or CDM) means the list of
all individual items and services maintained by a hospital for which
the hospital has established a charge.
De-identified maximum negotiated charge means the highest charge
that a hospital has negotiated with all third party payers for an item
or service.
De-identified minimum negotiated charge means the lowest charge
that a hospital has negotiated with all third party payers for an item
or service.
Discounted cash price means the charge that applies to an
individual who pays cash (or cash equivalent) for a hospital item or
service.
Gross charge means the charge for an individual item or service
that is
[[Page 65603]]
reflected on a hospital's chargemaster, absent any discounts.
Hospital means an institution in any State in which State or
applicable local law provides for the licensing of hospitals, that is
licensed as a hospital pursuant to such law or is approved, by the
agency of such State or locality responsible for licensing hospitals,
as meeting the standards established for such licensing. For purposes
of this definition, a State includes each of the several States, the
District of Columbia, Puerto Rico, the Virgin Islands, Guam, American
Samoa, and the Northern Mariana Islands.
Items and services means all items and services, including
individual items and services and service packages, that could be
provided by a hospital to a patient in connection with an inpatient
admission or an outpatient department visit for which the hospital has
established a standard charge. Examples include, but are not limited
to, the following:
(1) Supplies and procedures.
(2) Room and board.
(3) Use of the facility and other items (generally described as
facility fees).
(4) Services of employed physicians and non-physician practitioners
(generally reflected as professional charges).
(5) Any other items or services for which a hospital has
established a standard charge.
Machine-readable format means a digital representation of data or
information in a file that can be imported or read into a computer
system for further processing. Examples of machine-readable formats
include, but are not limited to, .XML, .JSON and .CSV formats.
Payer-specific negotiated charge means the charge that a hospital
has negotiated with a third party payer for an item or service.
Service package means an aggregation of individual items and
services into a single service with a single charge.
Shoppable service means a service that can be scheduled by a
healthcare consumer in advance.
Standard charge means the regular rate established by the hospital
for an item or service provided to a specific group of paying patients.
This includes all of the following as defined under this section:
(1) Gross charge.
(2) Payer-specific negotiated charge.
(3) De-identified minimum negotiated charge.
(4) De-identified maximum negotiated charge.
(5) Discounted cash price.
Third party payer means an entity that is, by statute, contract, or
agreement, legally responsible for payment of a claim for a healthcare
item or service.
Sec. 180.30 Applicability.
(a) General applicability. Except as provided in paragraph (b) of
this section, the requirements of this part apply to hospitals as
defined at Sec. 180.20.
(b) Exception. Federally owned or operated hospitals are deemed by
CMS to be in compliance with the requirements of this part including
but not limited to:
(1) Federally owned hospital facilities, including facilities
operated by the U.S. Department of Veterans Affairs and Military
Treatment Facilities operated by the U.S. Department of Defense.
(2) Hospitals operated by an Indian Health Program as defined in
section 4(12) of the Indian Health Care Improvement Act.
(c) Online availability. Unless otherwise stated, hospital charge
information must be made public electronically via the internet.
Subpart B--Public Disclosure Requirements
Sec. 180.40 General requirements.
A hospital must make public the following:
(a) A machine-readable file containing a list of all standard
charges for all items and services as provided in Sec. 180.50.
(b) A consumer-friendly list of standard charges for a limited set
of shoppable services as provided in Sec. 180.60.
Sec. 180.50 Requirements for making public hospital standard charges
for all items and services.
(a) General rules. (1) A hospital must establish, update, and make
public a list of all standard charges for all items and services online
in the form and manner specified in this section.
(2) Each hospital location operating under a single hospital
license (or approval) that has a different set of standard charges than
the other location(s) operating under the same hospital license (or
approval) must separately make public the standard charges applicable
to that location.
(b) Required data elements. A hospital must include all of the
following corresponding data elements in its list of standard charges,
as applicable:
(1) Description of each item or service provided by the hospital.
(2) Gross charge that applies to each individual item or service
when provided in, as applicable, the hospital inpatient setting and
outpatient department setting.
(3) Payer-specific negotiated charge that applies to each item or
service when provided in, as applicable, the hospital inpatient setting
and outpatient department setting. Each payer-specific negotiated
charge must be clearly associated with the name of the third party
payer and plan.
(4) De-identified minimum negotiated charge that applies to each
item or service when provided in, as applicable, the hospital inpatient
setting and outpatient department setting.
(5) De-identified maximum negotiated charge that applies to each
item or service when provided in, as applicable, the hospital inpatient
setting and outpatient department setting.
(6) Discounted cash price that applies to each item or service when
provided in, as applicable, the hospital inpatient setting and
outpatient department setting.
(7) Any code used by the hospital for purposes of accounting or
billing for the item or service, including, but not limited to, the
Current Procedural Terminology (CPT) code, the Healthcare Common
Procedure Coding System (HCPCS) code, the Diagnosis Related Group
(DRG), the National Drug Code (NDC), or other common payer identifier.
(c) Format. The information described in paragraph (b) of this
section must be published in a single digital file that is in a
machine-readable format.
(d) Location and accessibility. (1) A hospital must select a
publicly available website for purposes of making public the standard
charge information required under paragraph (b) of this section.
(2) The standard charge information must be displayed in a
prominent manner and clearly identified with the hospital location with
which the standard charge information is associated.
(3) The hospital must ensure that the standard charge information
is easily accessible, without barriers, including but not limited to
ensuring the information is accessible:
(i) Free of charge;
(ii) Without having to establish a user account or password; and
(iii) Without having to submit personal identifying information
(PII).
(4) The digital file and standard charge information contained in
that file must be digitally searchable.
(5) The file must use the following naming convention specified by
CMS, specifically: __standardcharges.[json[verbar]xml[verbar]csv].
(e) Frequency of updates. The hospital must update the standard
charge information described in paragraph (b)
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of this section at least once annually. The hospital must clearly
indicate the date that the standard charge data was most recently
updated, either within the file itself or otherwise clearly associated
with the file.
Sec. 180.60 Requirements for displaying shoppable services in a
consumer-friendly manner.
(a) General rules. (1) A hospital must make public the standard
charges identified in paragraphs (b)(3) through (6) of this section,
for as many of the 70 CMS-specified shoppable services that are
provided by the hospital, and as many additional hospital-selected
shoppable services as is necessary for a combined total of at least 300
shoppable services.
(i) In selecting a shoppable service for purposes of this section,
a hospital must consider the rate at which it provides and bills for
that shoppable service.
(ii) If a hospital does not provide 300 shoppable services, the
hospital must make public the information specified in paragraph (b) of
this section for as many shoppable services as it provides.
(2) A hospital is deemed by CMS to meet the requirements of this
section if the hospital maintains an internet-based price estimator
tool which meets the following requirements.
(i) Provides estimates for as many of the 70 CMS-specified
shoppable services that are provided by the hospital, and as many
additional hospital-selected shoppable services as is necessary for a
combined total of at least 300 shoppable services.
(ii) Allows healthcare consumers to, at the time they use the tool,
obtain an estimate of the amount they will be obligated to pay the
hospital for the shoppable service.
(iii) Is prominently displayed on the hospital's website and
accessible to the public without charge and without having to register
or establish a user account or password.
(b) Required data elements. A hospital must include, as applicable,
all of the following corresponding data elements when displaying its
standard charges (identified in paragraphs (b)(3) through (6) of this
section) for its list of shoppable services selected under paragraph
(a)(1) of this section:
(1) A plain-language description of each shoppable service.
(2) An indicator when one or more of the CMS-specified shoppable
services are not offered by the hospital.
(3) The payer-specific negotiated charge that applies to each
shoppable service (and to each ancillary service, as applicable). Each
list of payer-specific negotiated charges must be clearly associated
with the name of the third party payer and plan.
(4) The discounted cash price that applies to each shoppable
service (and corresponding ancillary services, as applicable). If the
hospital does not offer a discounted cash price for one or more
shoppable services (or corresponding ancillary services), the hospital
must list its undiscounted gross charge for the shoppable service (and
corresponding ancillary services, as applicable).
(5) The de-identified minimum negotiated charge that applies to
each shoppable service (and to each corresponding ancillary service, as
applicable).
(6) The de-identified maximum negotiated charge that applies to
each shoppable service (and to each corresponding ancillary service, as
applicable).
(7) The location at which the shoppable service is provided,
including whether the standard charges identified in paragraphs (b)(3)
through (6) of this section for the shoppable service apply at that
location to the provision of that shoppable service in the inpatient
setting, the outpatient department setting, or both.
(8) Any primary code used by the hospital for purposes of
accounting or billing for the shoppable service, including, as
applicable, the Current Procedural Terminology (CPT) code, the
Healthcare Common Procedure Coding System (HCPCS) code, the Diagnosis
Related Group (DRG), or other common service billing code.
(c) Format. A hospital has discretion to choose a format for making
public the information described in paragraph (b) of this section
online.
(d) Location and accessibility of online data. (1) A hospital must
select an appropriate publicly available internet location for purposes
of making public the information described in paragraph (b) of this
section.
(2) The information must be displayed in a prominent manner that
identifies the hospital location with which the information is
associated.
(3) The shoppable services information must be easily accessible,
without barriers, including but not limited to ensuring the information
is:
(i) Free of charge.
(ii) Accessible without having to register or establish a user
account or password.
(iii) Accessible without having to submit personal identifying
information (PII).
(iv) Searchable by service description, billing code, and payer.
(e) Frequency. The hospital must update the standard charge
information described in paragraph (b) of this section at least once
annually. The hospital must clearly indicate the date that the
information was most recently updated.
Subpart C--Monitoring and Penalties for Noncompliance
Sec. 180.70 Monitoring and enforcement.
(a) Monitoring. (1) CMS evaluates whether a hospital has complied
with the requirements under Sec. Sec. 180.40, 180.50, and 180.60.
(2) CMS may use methods to monitor and assess hospital compliance
with the requirements under this part, including, but not limited to,
the following, as appropriate:
(i) CMS' evaluation of complaints made by individuals or entities
to CMS.
(ii) CMS review of individuals' or entities' analysis of
noncompliance.
(iii) CMS audit of hospitals' websites.
(b) Actions to address hospital noncompliance. If CMS concludes
that the hospital is noncompliant with one or more of the requirements
of Sec. 180.40, Sec. 180.50, or Sec. 180.60, CMS may take any of the
following actions, which generally, but not necessarily, will occur in
the following order:
(1) Provide a written warning notice to the hospital of the
specific violation(s).
(2) Request a corrective action plan from the hospital if its
noncompliance constitutes a material violation of one or more
requirements, according to Sec. 180.80.
(3) Impose a civil monetary penalty on the hospital and publicize
the penalty on a CMS website according to Sec. 180.90 if the hospital
fails to respond to CMS' request to submit a corrective action plan or
comply with the requirements of a corrective action plan.
Sec. 180.80 Corrective action plans.
(a) Material violations requiring a corrective action plan. CMS
determines if a hospital's noncompliance with the requirements of this
part constitutes material violation(s) requiring a corrective action
plan. A material violation may include, but is not limited to, the
following:
(1) A hospital's failure to make public its standard charges
required by Sec. 180.40.
(2) A hospital's failure to make public its standard charges in the
form and manner required under Sec. Sec. 180.50 and 180.60.
(b) Notice of violation. CMS may request that a hospital submit a
corrective action plan, specified in a notice of violation issued by
CMS to a hospital.
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(c) Compliance with corrective action plan requests and corrective
actions. (1) A hospital required to submit a corrective action plan
must do so, in the form and manner, and by the deadline, specified in
the notice of violation issued by CMS to the hospital and must comply
with the requirements of the corrective action plan.
(2) A hospital's corrective action plan must specify elements
including, but not limited to:
(i) The corrective actions or processes the hospital will take to
address the deficiency or deficiencies identified by CMS.
(ii) The timeframe by which the hospital will complete the
corrective action.
(3) A corrective action plan is subject to CMS review and approval.
(4) After CMS' review and approval of a hospital's corrective
action plan, CMS may monitor and evaluate the hospital's compliance
with the corrective actions.
(d) Noncompliance with corrective action plan requests and
requirements. (1) A hospital's failure to respond to CMS' request to
submit a corrective action plan includes failure to submit a corrective
action plan in the form, manner, or by the deadline, specified in a
notice of violation issued by CMS to the hospital.
(2) A hospital's failure to comply with the requirements of a
corrective action plan includes failure to correct violation(s) within
the specified timeframes.
Sec. 180.90 Civil monetary penalties.
(a) Basis for imposing civil monetary penalties. CMS may impose a
civil monetary penalty on a hospital identified as noncompliant
according to Sec. 180.70, and that fails to respond to CMS' request to
submit a corrective action plan or comply with the requirements of a
corrective action plan as described in Sec. 180.80(d).
(b) Notice of imposition of a civil monetary penalty. (1) If CMS
imposes a penalty in accordance with this part, CMS provides a written
notice of imposition of a civil monetary penalty to the hospital via
certified mail or another form of traceable carrier.
(2) This notice to the hospital may include, but is not limited to,
the following:
(i) The basis for the hospital's noncompliance, including, but not
limited to, the following:
(A) CMS' determination as to which requirement(s) the hospital has
violated.
(B) The hospital's failure to respond to CMS' request to submit a
corrective action plan or comply with the requirements of a corrective
action plan, as described in Sec. 180.80(d).
(ii) CMS' determination as to the effective date for the
violation(s). This date is the latest date of the following:
(A) The first day the hospital is required to meet the requirements
of this part.
(B) If a hospital previously met the requirements of this part but
did not update the information annually as required, the date 12 months
after the date of the last annual update specified in information
posted by the hospital.
(C) A date determined by CMS, such as one resulting from monitoring
activities specified in Sec. 180.70, or development of a corrective
action plan as specified in Sec. 180.80.
(iii) The amount of the penalty as of the date of the notice.
(iv) A statement that a civil monetary penalty may continue to be
imposed for continuing violation(s).
(v) Payment instructions.
(vi) Intent to publicize the hospital's noncompliance and CMS'
determination to impose a civil monetary penalty on the hospital for
noncompliance with the requirements of this part by posting the notice
of imposition of a civil monetary penalty on a CMS website.
(vii) A statement of the hospital's right to a hearing according to
subpart D of this part.
(viii) A statement that the hospital's failure to request a hearing
within 30 calendar days of the issuance of the notice permits the
imposition of the penalty, and any subsequent penalties pursuant to
continuing violations, without right of appeal in accordance with Sec.
180.110.
(3) If the civil monetary penalty is upheld, in part, by a final
and binding decision according to subpart D of this part, CMS will
issue a modified notice of imposition of a civil monetary penalty, to
conform to the adjudicated finding.
(c) Amount of the civil monetary penalty. (1) CMS may impose a
civil monetary penalty upon a hospital for a violation of each
requirement of this part.
(2) The maximum daily dollar amount for a civil monetary penalty to
which a hospital may be subject is $300. Even if the hospital is in
violation of multiple discrete requirements of this part, the maximum
total sum that a single hospital may be assessed per day is $300.
(3) The amount of the civil monetary penalty will be adjusted
annually using the multiplier determined by OMB for annually adjusting
civil monetary penalty amounts under part 102 of this title.
(d) Timing of payment of civil monetary penalty. (1) A hospital
must pay the civil monetary penalty in full within 60 calendar days
after the date of the notice of imposition of a civil monetary penalty
from CMS under paragraph (b) of this section.
(2) In the event a hospital requests a hearing, pursuant to subpart
D of this part, the hospital must pay the amount in full within 60
calendar days after the date of a final and binding decision, according
to subpart D of this part, to uphold, in whole or in part, the civil
monetary penalty.
(3) If the 60th calendar day described in paragraphs (d)(1) and (2)
of this section is a weekend or a Federal holiday, then the timeframe
is extended until the end of the next business day.
(e) Posting of notice. (1) CMS will post the notice of imposition
of a civil monetary penalty described in paragraphs (b) and (f) of this
section on a CMS website.
(2) In the event that a hospital elects to request a hearing,
pursuant to subpart D of this part:
(i) CMS will indicate in its posting, under paragraph (e)(1) of
this section, that the civil monetary penalty is under review.
(ii) If the civil monetary penalty is upheld, in whole, by a final
and binding decision according to subpart D of this part, CMS will
maintain the posting of the notice of imposition of a civil monetary
penalty on a CMS website.
(iii) If the civil monetary penalty is upheld, in part, by a final
and binding decision according to subpart D of this part, CMS will
issue a modified notice of imposition of a civil monetary penalty
according to paragraph (b)(3) of this section, to conform to the
adjudicated finding. CMS will make this modified notice public on a CMS
website.
(iv) If the civil monetary penalty is overturned in full by a final
and binding decision according to subpart D of this part, CMS will
remove the notice of imposition of a civil monetary penalty from a CMS
website.
(f) Continuing violations. CMS may issue subsequent notice(s) of
imposition of a civil monetary penalty, according to paragraph (b) of
this section, that result from the same instance(s) of noncompliance.
Subpart D--Appeals of Civil Monetary Penalties
Sec. 180.100 Appeal of penalty.
(a) A hospital upon which CMS has imposed a penalty under this part
may appeal that penalty in accordance with subpart D of part 150 of
this title, except as specified in paragraph (b) of this section.
[[Page 65606]]
(b) For purposes of applying subpart D of part 150 of this title to
appeals of civil monetary penalties under this part:
(1) Civil money penalty means a civil monetary penalty according to
Sec. 180.90.
(2) Respondent means a hospital that received a notice of
imposition of a civil monetary penalty according to Sec. 180.90(b).
(3) References to a notice of assessment or proposed assessment, or
notice of proposed determination of civil monetary penalties, are
considered to be references to the notice of imposition of a civil
monetary penalty specified in Sec. 180.90(b).
(4) Under Sec. 150.417(b) of this title, in deciding whether the
amount of a civil money penalty is reasonable, the ALJ may only
consider evidence of record relating to the following:
(i) The hospital's posting(s) of its standard charges, if
available.
(ii) Material the hospital timely previously submitted to CMS
(including with respect to corrective actions and corrective action
plans).
(iii) Material CMS used to monitor and assess the hospital's
compliance according to Sec. 180.70(a)(2).
(5) The ALJ's consideration of evidence of acts other than those at
issue in the instant case under Sec. 150.445(g) of this title does not
apply.
Sec. 180.110 Failure to request a hearing.
(a) If a hospital does not request a hearing within 30 calendar
days of the issuance of the notice of imposition of a civil monetary
penalty described in Sec. 180.90(b), CMS may impose the civil monetary
penalty indicated in such notice and may impose additional penalties
pursuant to continuing violations according to Sec. 180.90(f) without
right of appeal in accordance with this part.
(1) If the 30th calendar day described in this paragraph (a) is a
weekend or a Federal holiday, then the timeframe is extended until the
end of the next business day.
(2) [Reserved]
(b) The hospital has no right to appeal a penalty with respect to
which it has not requested a hearing in accordance with Sec. 150.405
of this title, unless the hospital can show good cause, as determined
at Sec. 150.405(b) of this title, for failing to timely exercise its
right to a hearing.
PARTS 181-199--[RESERVED]
Dated: November 5, 2019.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
Dated: November 7, 2019.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2019-24931 Filed 11-15-19; 4:15 pm]
BILLING CODE 4120-01-P
