It’s official, finally! Hospitals now must reveal what they “charge” for services

CMS published in the last week or so a Proposed Rule that has been several years in the making under which hospitals will be required to make available to the public how much they “charge” for each service.

Section 2718(e) of the Affordable Care Act mandates that each hospital has an obligation to “list…the hospital’s  standard charges for items and services provided by the hospital for diagnosis-related groups [DRG’s) established under section 1886(d)(4) of the Social Security Act.”

This Proposed Rule will become effective October 1, 2014.  So, will we now know exactly what we will be charged?  Not exactly, because as has been reported often the “charges” (based on the infamous “chargemaster”) are not exactly  what patients and their insurers pay.  In other words, hospitals are not required to report what they receive from insurers.

The proposed rule also allows hospitals  flexibility in the manner in which they make available to the public their specific charges.  As stated in the proposal, “In this proposed rule, we are reminding hospitals of their obligation to comply with the provisions of section 2718(e) of the Public Health Service Act. Hospitals are responsible for establishing their charges and are in the best position to determine the exact manner and method by which to make those charges available to the public. Therefore, we are providing hospitals with the flexibility to determine how they make a list of their standard charges public. Our guidelines for implementing section 2718(e) of the Public Health Service Act are that hospitals either make public a list of their standard charges (whether that be the chargemaster itself or in another form of their choice), or their policies for allowing the public to view a list of those charges in response to an inquiry. We encourage hospitals to undertake efforts to engage in consumer friendly communication of their charges to help patients understand what their potential financial liability might be for services they obtain at the hospital, and to enable patients to compare charges for similar services across hospitals. We expect that hospitals will update the information at least annually, or more often as appropriate, to reflect current charges.”

CMS believes that over time this data will accumulate, and based upon the accumulation of these data, CMS will replicate it in a format that may be easier to interpret for the “average” patient (or rival player).

In New Hampshire, we do have some regulations tied to pricing information of health insurers.  N.H. RSA 420-G:11 and 11-a created  the New Hampshire Comprehensive Health Information System (CHIS) with data used to provide information for consumers and employers on an interactive website called New Hampshire HealthCost.  The site provides comparative information about the estimated amount that a hospital, surgery center, physician, or other health care professional receives for its services. For an insured individual,
HealthCost provides information that is specific to that person’s health benefits coverage. It also shows health costs for uninsured patients. Employers can use the Benefit Index Tool on the website to compare different carriers’ health plan premiums versus benefit richness.