After a brief delay, the Trump administration published the Hospital Outpatient Prospective Payment System (“OPPS”) Price Transparency final rule, which will take effect on January 1, 2021. The final rule requires hospitals to post the prices for services that they privately negotiated with insurance companies. The Centers for Medicare and Medicaid Services (“CMS”) noted that the policy is intended to make it easier for patients to shop around and will ultimately lead to lower prices.
The final rule requires hospitals to make their standard charges public, as follow:
Comprehensive Machine-Readable File: Hospitals are required to publish all hospital standard charges, including gross charges, payer-specific negotiated charges, minimum and maximum negotiated charges, and the amount the hospital will accept in cash from a patient. These charges must be available on the internet in a single data file. In addition, the file must also include common billing codes, and a description of the item or service so that consumers will have common elements to compare standard charges between hospitals.
Display of Shoppable Services in a Consumer-Friendly Manner: Hospitals are required to post these charges for 300 common shoppable services and update the information at least annually. Shoppable services “are services that can be scheduled by a healthcare consumer in advance such as x-rays, outpatient visits, imaging and laboratory tests or bundled services.” Additionally, the data file must be in “plain language,” posted in a prominent online location, and must be searchable, and the charges must be displayed as a group with charges for ancillary services that are customarily provided with the primary shoppable service. Of the 300 services, 70 are specified by CMS, while the additional 230 services are the hospital’s choice.
As we previously reported, the pushback to the Proposed Rule was swift and intense. The healthcare and insurance industries submitted numerous comments to CMS during the formal comment period. For instance, the American Hospital Association argued that the OPPS rule would impose a significant burden on hospitals, and would result in numerous unintended consequences, including fueling anticompetitive behavior among commercial health insurers, and creating a price fixing platform. Meanwhile, the Rural Hospital Coalition commented on unique aspects of rural care that make health care more expensive in rural areas, and the Association of American Medical Colleges focused on the operational challenges of compliance, noting that hospitals do not negotiate rates on and item-by-item basis. Further, in their comments, the Federation of American Hospitals noted that providing cost data without corresponding quality data would be misleading. Others questioned whether CMS even has the legal authority to impose such a price transparency requirement.
In response to the comments, CMS Administrator Seema Verma said the Trump Administration “is committed to implementing this executive order to ensure Americans have a complete picture to make informed decisions about their healthcare.” Verma added that “CMS received over 1,400 stakeholder comments on the price transparency provisions in our proposed OPPS rule. We considered the thoughtful and innovative ideas provided during the comment period as we work to finalize the hospital price transparency rule alongside a comprehensive proposal for health plan price transparency.”
The final rule was not well received by the industry. Four industry groups, including the American Hospital Association, Association of American Medical Colleges, Children’s Hospital Association and the Federation of American Hospitals, released a joint statement in response to the rule. The statement characterized the price transparency rule as a “setback in efforts to provide patients with the most relevant information … to make informed decisions about their care.” The statement also noted that “[b]ecause the final rule does not achieve the goal of providing patients with out-of-pocket cost information, and instead threatens to confuse patients, our four organizations will soon join with member hospitals to file a legal challenge to the rule on grounds including that it exceeds the Administration’s authority.”