Hospital Price Transparency Rule

A new federal rule requires hospitals operating in the U.S. to publish their prices for items and services on their websites, effective Jan. 1, 2021. According to the rule, these requirements will promote price transparency in healthcare and public access to hospital standard charges. The rule requires each hospital to establish and make public annually a list of its standard charges for items and services by location.

Requirement for machine-readable information

  • Hospitals must disclose a single digital file in a machine-readable format on a publicly available website that is digitally searchable. The file must include all standard charges (including gross charges, discounted cash prices, payer-specific negotiated charges with the name of the third-party payer and plan, and de-identified minimum and maximum negotiation charges) and any hospital code used for accounting or billing1 for all items and services at a particular location. The file must be updated at least annually.

Requirement for displaying ‘shoppable’ services in a consumer-friendly manner

  • Hospitals must disclose, in a consumer-friendly manner, all standard charges (as listed above) for at least 300 “shoppable” services (and corresponding ancillary services, as applicable). “Shoppable” service refers to a service that can be scheduled by a consumer in advance.
  • Hospitals will comply with the requirements regarding shoppable services by maintaining an internet-based price estimator tool, providing estimates for at least 300 shoppable services identified by federal health officials, according to the Centers for Medicare & Medicaid Services. A hospital must include an easy-to-understand description of each shoppable service and indicate when it does not provide one or more of the services.

Hospital organizations filed lawsuit

In early December, various organizations representing hospitals and a couple of health systems filed a lawsuit arguing, among other things, that the U.S. Department of Health and Human Services lacks statutory authority to require and enforce the provision mandating public disclosure of individually negotiated rates between commercial health insurers and hospitals. They also argue that the rule violates the First Amendment by compelling public disclosure of individual rates negotiated between hospitals and insurers.

1 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 (NDS), or other common payer identifier.