CMS finalizes enhanced hospital price transparency requirements for 2024

Hospital price transparency mandates are set to become more stringent in the coming year as CMS seeks to strengthen regulations that have been on the books since 2021.

Medicare’s 2024 final rule for hospital outpatient payments includes updates to the price transparency rules. Hospitals will need to post charge information using a more precise template, and they face a greater likelihood of being publicly cited for noncompliance.

More changes could be teed up in future rulemaking in response to a request for information (RFI). Issued in the proposed version of the rule, the RFI asked how hospital price transparency “can best support and complement the consumer-friendly requirements” established more recently in the health plan price transparency regulations and the No Surprises Act.

One question posed in the RFI was whether the consumer-friendly display of services required as part of hospital price transparency is still necessary and, if it is, how it can better align with requirements set forth in the health plan rules and No Surprises. The consumer-friendly display is not the subject of the new hospital transparency regulations, which instead focus on the machine-readable file (MRF).

CMS said it received more than 70 responses to the RFI and will consider them moving forward. The agency may not be inclined to go as far as to scale back hospital transparency regulations, however, at a time when Congress is showing keen interest in getting transparency across healthcare settings codified in statute.

A more prescriptive format

Stricter technical requirements will be mandatory starting July 1, including implementation of a new template that will dictate the layout and data specifications of the MRF. The template will be available as a CSV format or JSON schema.

Data elements in the MRF will include the hospital’s name, license number, and location name and address — if applicable, locations and addresses of all inpatient facilities and stand-alone emergency departments that operate under the same license — along with the file version (CSV or JSON) and the date when the file was last updated.

Direct links to the MRF must be included in a .txt file in the hospital’s root folder and in a footer on the hospital’s homepage. Those must be in place starting Jan. 1, six months ahead of the deadline to incorporate most of the new changes. CMS’s hope with the .txt file requirement is to improve automated searches of MRFs.

Expanded charge information

One new requirement starting July 1 will be for hospitals to attest in their MRF that to the best of their knowledge, they have encoded all standard-charge information that corresponds to the required data elements and that the information encoded is accurate and complete as of the date in the file. The attestation is intended to alleviate confusion over instances when hospitals leave fields blank because they’re not applicable rather than because of an oversight or an attempt to skirt the rules.

The categories of standard charges, including payer-specific negotiated charges, remain from earlier iterations of the transparency rule. By July 1, the payer and the specific health plan must be listed as separate data elements for each charge. However, plans may be listed as categories (e.g., “all PPO plans”) when the charge applies to all such plans.

“We believe this exception is necessary to ensure that hospitals are not penalized for displaying information that is consistent with their contracting practices,” CMS wrote in the final rule.

MRFs also must include the contracting method (e.g., fee schedule or per diem) used to establish each negotiated charge and whether the charge should be interpreted as a dollar amount, a percentage or an algorithm. In the case of a percentage or an algorithm, the MRF must convey how the dollar amount is determined.

The hospital also would have to update its MRF to translate the percentage or algorithm into an estimated allowed amount in dollars. This requirement is not being phased in until Jan. 1, 2025, or six months after most of the other new charge-related requirements.

Expanded item and service information

Beginning in July, the item or service that corresponds to each charge will need to include a general description and a note on whether the item or service is provided as part of an inpatient admission or outpatient encounter. Starting in 2025, the drug unit and type of measurement will need to be included for pharmaceuticals.

Hospitals in July also must list billing and coding information — e.g., CPT and HCPCS codes, DRGs, National Drug Codes and Revenue Center Codes — for the item or service linked to the standard charge. Pertinent modifiers must be included starting in 2025.

The inclusion of these elements “will increase the meaningfulness of the standard charge information and heighten the public’s ability to understand and more efficiently aggregate and use the data,” CMS wrote in the rule, adding that enforcement also will be streamlined and improved as a result.

New enforcement actions

At its discretion, CMS next year can require hospitals to submit a certification of the accuracy and completeness of the standard-charge information in their MRF. Compliance checks can go beyond website audits to include more thorough reviews of a hospital’s standard-charge information, the agency said.

Hospitals also will have to acknowledge in writing when they have received a warning notice about noncompliance, and CMS reserves the right to notify a parent health system when a hospital is out of compliance.

Enforcement actions will be publicized more extensively. Whereas hospitals thus far have been posted on a publicly accessible webpage only if they have been penalized for noncompliance, listings are set to expand to include all hospitals. For each hospital, the listing will indicate whether it is in compliance, and for noncompliant organizations, information will describe the status of enforcement actions, including warnings.