In proposed regulations, CMS seeks to strengthen hospital price transparency requirements

Hospital price transparency regulations are undergoing changes heading into their fourth year as CMS seeks to step up enforcement while making compliance more straightforward.

As part of the 2024 proposed rule for hospital outpatient payments, CMS is adding to the requirement for hospitals to maintain a machine-readable file of their charges for services. In addition, enforcement actions against hospitals would be publicized even before assessment of civil monetary penalties.

CMS said the impetus for the proposed technical requirements is feedback from “interested parties” that the files would be more beneficial if they were more standardized.

“In particular, IT specialists have indicated that the current flexibilities and lack of encoding specifications hinder the machine-readability of the data in the files, presenting a barrier to the intended use of the data,” CMS wrote. “Additionally, hospitals have asked us for more specificity on how they should publicly display their standard charge information, with an emphasis on how they should explain and display their payer-specific negotiated charges.”

The agency also said enforcement would be easier if the files were more consistent.

Proposed changes to files

Standard charges to be listed in machine-readable files would continue to include a hospital’s gross charge, payer-specific negotiated charge, maximum and minimum deidentified negotiated charges, and cash-discounted price.

Starting in 2024, hospitals would need to encode fields for all the required data elements. Among the elements highlighted in the rule are:

General

* The name, license number, location name and address of the hospital

* The file version number and date of the most recent update to the listed charge information

Payer-specific negotiated charges

* The contracting method used to establish the charge (e.g., whether the charge is a “base rate”)

* Whether the charge should be interpreted as a dollar amount or percentage, or by using an algorithm (this provision is in response to the reportedly large number of fields that are left blank or filled in with “n/a”)

* The expected allowed amount in instances when the charge can’t be expressed as a dollar figure

Hospital items and services

* Whether the item or service is provided in the inpatient or outpatient setting

* Drug unit and type of measurement, encoded as separate data elements

Item or service billing

* Any relevant modifier and the applicable code type (HPCPS, CPT, etc.)

Promoting standardization of data

CMS would establish a template with fields for the relevant information. The template would be available in JSON and CSV (both wide and tall) formats.

Compliance with the regulations would entail adhering to the template layout, data specifications and an accompanying data dictionary. CMS also seeks feedback on whether a validator tool would be helpful.

Technical instructions would include guidance as to when and how hospitals should indicate non-applicability for charge information when necessary. That has been a source of confusion in instances when it’s unclear whether a hospital has left a field blank because there is no applicable information or because of an oversight or a decision to avoid complying.

“Now that hospitals have experience in making their standard charges public in an MRF [a machine-readable file] and we have a better understanding of how hospitals establish their standard charges, we believe our data formatting requirements can be made more prescriptive to enhance the public’s ability to use the hospital standard charge information to its fullest potential,” CMS wrote.

Within the template, hospitals also would need to attest to the accuracy and completeness of their files.

To enhance technical accessibility, CMS is proposing to require placement in the website root folder of a standardized text file that would directly link to the machine-readable file. Hospitals also would need to include a “Hospital Price Transparency” link in the footer of their homepage (and other pages as appropriate).

Stepping up enforcement

The various changes follow sub-regulatory guidance issued in April to tighten timelines for hospitals to come into compliance after receiving a request for a formal corrective action plan (CAP). In addition, CMS said at the time it would skip issuing warning letters and move straight to sending a CAP request to hospitals that had shown little sign of trying to comply.

In the newly proposed rule, CMS announced plans to publicize any compliance actions taken against a hospital (e.g., warning letters, CAP requests), along with the status and outcomes of those actions. Current policies call for publicizing noncompliance only when a hospital has been penalized.

Proposals for additional enforcement protocols include:

• Requiring hospitals to formally acknowledge their receipt of an initial warning notice
• Requiring hospitals to certify the accuracy and completeness of the charge information in their machine-readable files during the enforcement process and to submit additional documentation (e.g., contracts) that may be needed to assess compliance
• Notifying health system leaders when a hospital within their system is the subject of a compliance action

CMS projects that the various new regulations would include an average one-time cost burden of $2,787 per hospital.

“We believe that the benefits to the public (and to hospitals themselves) outweigh the burden imposed on hospitals,” the agency wrote.

Feedback on shoppable services

The current regulations state that along with the machine-readable file, hospitals also must post a list of at least 300 shoppable services in a consumer-accessible display. In the proposed rule, CMS is seeking comment as to whether these provisions should be modified to align with other price transparency initiatives, such as transparency regulations for insurers and requirements pertaining to good-faith estimates for self-pay and, potentially, insured individuals under the No Surprises Act.

One point in the solicitation poses the question of whether the shoppable-services aspect of the hospital price transparency rules has become redundant since issuance of those other sets of regulations. However, language in a comprehensive congressional bill on price transparency would add legislative heft to the requirement to list shoppable services.

Comments on all aspects of the proposed regulations are due by Sept. 11 at regulations.gov.